Business Issues in Organizational Culture: Utilitarian Ethics - Literature review Example

? Business Ethics Utilitarian Ethics Issues in the Case Utilitarianism is a theory based on the consequences that business actions accomplished or performed should be helpful to all people involved in the process. The rewards reaped from business operations are good, and the losses are bad. Business people should maximize on the good outcomes in their operations and minimize the negative consequences that may arise out of them (Tittle, 2000). The heart pacemaker company was involved in a business venture primarily compelled by utilitarian actions that the business provided to its clients. The heart pacemakers were made because several people were in need of the equipment. The pacemakers helped people in maintaining proper heart beat rate to avoid deaths (Shanks, 1996). Although some people died out of incompetency of certain doctors while installing the gadgets, the risks and negative consequences were minimized. The pacemaker company maximized on the good it offered to its client, helping avoid deaths because of inability of the heart to beat. The deaths that occurred because of the lack of pacemakers were more than deaths due to the challenges of installing the pacemakers. This exemplified the need to maximize the greater good of pacemaker business while minimizing on the dangers faced. Saving human life is better than the financial gains that the transistor manufacturing company is against (Shanks, 1996). Utilitarian ethics is demonstrated by the transistor manufacturing board when they accepted to supply the heart pacemakers with the transistors they needed because of a responsibility and duty to protect the rights of individuals in need of the pacemakers. Further, the board ensured that they minimized the negative implications of the business so that they balanced their trust responsibility to the company (Melvin, 2005). They did the right thing with maximum good in supplying the transistors to save lives and developed appropriate technical as well as testing standards to hold the pacemaker company against in an effort to minimize the harm. They reduced harm in the business and maximized on the utility while accomplishing the common good and protecting rights of people (Shanks, n.d.). What Jeremy Bentham, the father of utilitarianism, would have said about the Case Bentham would have argued that the board agreeing to supply the company making pacemakers was based on utilitarian business ethics because it satisfied human nature by avoiding pain that patients would undergo without pacemakers (Jones, 2005). In addition, he would have asserted that the appropriate action on the case would be for the transistor company to supply the other company as it was the right action based on the principle of utility. The good effects in the case involved supplying the transistors with a commitment to improving the testing and technical standards to balance the good and bad effects. This was a much better alternative than declining to supply the transistors to the pacemakers (Driver, 2009). Letting the pacemaker company not to run out of business by supplying the transistors was an instance of utilitarianism because it was a consideration of the good of all the involved parties without any partiality. How Bentham's suggestion that "We seek pleasure and the avoidance of pain..." might apply The board of the transistor making company demonstrated ‘seeking pleasure and avoiding pain’ when it initially declined that it would not supply transistors to pacemakers because it would face legal suits and challenges. The absence of appropriate standards by the pacemakers to measure their electronics would cause pain to the transistor company. The business deal would cause pain to the transistor company, and the board initially opts out of the deal. This would have not been proper for the welfare of the involved stakeholders (Shaw, 2011). In addition, all the other transistor making companies that pulled out of business with the pacemakers were avoiding pain in their business pursuit by trying to avoid any legal suits that may come their way. Later, the board demonstrates a change in mind and seeks to ensure that common good is achieved and pain is avoided in the business deal by developing technical and testing standards for the pacemakers to minimize on the negative outcomes in the business (Gaus, 1999). Was Bentham right? Bentham was right since in business ventures or operations, the guiding factor is to make profits (pleasure) and avoid making losses regarded as pain (Pletz, 1999). When making the decision to pull out of the business deal or stay in it, the guiding principle was the rewards and losses that accompany would get. In case that negative consequences arise, people tend to avoid such actions and opt for actions that have rewarding outcomes. Bentham was, therefore, justified to argue that people are guided by the need to avoid pain and seek pleasure in their activities, business included (McBride, 2007). The Utility Test Applied to the Case Utilitarian principle demands that best results are produced for all the involved parties in the process. The good ought to be maximized whereas the negative results minimized for all the involved parties (Hamilton, 2012). The business deal produced the best results for both the pacemakers and the transistor company so that pacemakers’ company did not pull out of business and its clients in need of the technology accessed it. The board benefited also by minimizing on the negative implications that would have arisen by developing proper standards for use by pacemakers to measure its electronics. The action taken was right because all the parties were satisfied with no individual preferences. The good outcomes were based on material benefits for the involved parties (Bykvist, 2009). The decision to continue with the deal between the transistor company and the pacemakers was the right because all the involved parties affected by the business process were accorded an equal standing. The clients succeeded in getting the pacemakers they wanted. The pacemakers got the supply for the transistors and continued in their business. The liabilities on the side of the transistor company were minimized to ensure that all the parties involved were not unhappy with the outcome. The common good justified the happiness without personal preference to any group or individual (Hamilton, 2009). The alternative actions in the business deal would include the transistor company declining to supply the transistors to the pacemaker company or the transistor company agreeing to supply the transistors but without developing standard measures for the pacemakers. Declining the business deal would affect pacemakers significantly because they would be out of business. The clients in need of the pacemakers would succumb to heart problems in absence of pacemakers (Gillroy & Wade, 1992). The clients in need of pacemakers would die, and the pacemakers would be out of business. The transistor company would experience a reduced customer base. The greatest benefit over cost for the affected stakeholders is continuing with the deal and developed standard measures. Embracing such actions in the entire industry would be right because the industry was new and standards were emerging. This would be an appropriate way of standardizing the market and would serve the common good and protect rights of individuals (Shanks, 1996). The action with the greatest benefit was progressing with the deal under developed standard measures. The action also would be the most appropriate if used as a policy measure, implying that the board arrived at an ethical action. The stakeholders would benefit with minimized harm over a long period (Gillroy & Wade, 1992). Applying the Justice Test to the Case The principle of justice demands that equals get similar treatment unless under different conditions (Velasquez, Andre, Shanks, & Meyer, 1990). The action demonstrated fair burdens and benefits distribution. The clients got the pacemakers they wanted but would bear the burden of the mistakes of the doctors. The pacemaker company would have to conform to the standard measures to continue the business. The transistor company would not face legal battles and get profits from the transaction. The stakeholders were considered equal with no preference to anybody; hence, the action provided for them to share the benefits and burdens of the deal equally. All the stakeholders claimed benefits and burdens from the best action agreed upon. Except that, the transistor company gained more in the contract and could rescind the agreement at its discretion if the pacemakers did not respect and implement the standard measures. Inequality in the distribution, as witnessed in the case of the transistor company, was the most appropriate distribution criterion because it ensured a common good for the entire industry stakeholders. The outcome of the deal was fair in the prevailing situation (Hamilton, 2012). Comparing and Contrasting the Results of the Utility Test and Justice Test Both the outcomes of utility and justice test demonstrate impartiality since no preference or unfairness is accorded to any stakeholder. The actions of the tests hinged on equality and impartiality. Nonetheless, the justice test had an aspect of inequality: the transistor company is justified to have more power and control in the contract. But this did not alter the outcomes to its favor (Hamilton, 2009). Which of the two tests do you believe is most informative and why? The utility test is the most informative because it includes evaluating the possible alternatives and weighing the best alternative with least costs. The utility test is informative in a sense that postulates the effects of the outcomes on a wider setting in form of a policy. Both the long-term and short-term consequences of the actions are evaluated against alternative to arrive at the most appropriate conclusion presently and in future (Hamilton, 2009). References Bykvist, K. (2009). Utilitarianism: A Guide for the Perplexed. S.I.: Continuum International Publishing Group. Driver, J. (2009, June 16). The History of Utilitarianism. In Stanford Encyclopedia of Philosophy. Retrieved from http://plato.stanford.edu/entries/utilitarianism-history/#JerBen Gaus, G. F. (1999). Social Philosophy. Armonk, NY : M.E. Sharpe. Gillroy, J. M., & Wade, M. (Eds.). (1992 ). The Moral Dimensions of Public Policy Choice: Beyond the Market Paradigm. Pittsburgh: University of Pittsburgh Press. Hamilton, B. J. ( 2012 , June 7). Justice Test. Retrieved from http://ethicsops.com/JusticeTest.php Hamilton, B. J. (2009). The Utility Test. Retrieved from http://ebeni.wordpress.com/decisions/theories/consequences/the-utility-test/ Jones, C. (2005). Business Ethics: A Critical Approach. New York: Routledge. McBride, K. (2007). Punishment and Political Order. Ann Arbor: University of Michigan Press. Melvin, H. (2005, September 30th). Business Ethics: Utilitarianism. Retrieved from http://ww2.it.nuigalway.ie/staff/h_melvin/prof_skill/L2_handout.pdf Pletz, J. (1999). Being Ethical. Commack, N.Y. : Kroshka Books. Shanks, T. (n.d.). Commentary on the Case of the Sole Remaining Supplier. Retrieved from http://www.scu.edu/ethics/dialogue/candc/cases/supplier_comments.html Shanks, T. (1996). The Case of the Sole Remaining Supplier. Retrieved from http://www.scu.edu/ethics/dialogue/candc/cases/supplier.html Shaw, W. H. (2011). Business Ethics: A Textbook with Cases. Boston, MA : Cengage Learning. Tittle, P. (Ed.). (2000). Ethical Issues in Business: Inquiries, Cases, and Readings. Peterborough, Ontario: Broadview Press. Velasquez, M., Andre, C., Shanks, T., & Meyer, M. J. (1990). Justice and Fairness. Retrieved from http://www.scu.edu/ethics/practicing/decision/justice.html Read More