The Relevance of Business Ethics

In today’s globalized, interconnected, and interdependent business environment, ethics are more important than ever. Both internal and external operations need to be guided by ethical principles. Ethics are important for the self-interest of the company and its employees, helping to strengthen relationships with clients and prevent conflicts that could damage strategic alliances.

Utilitarian ethical frameworks are especially applicable to the modern business environment. The fundamental principles of utilitarianism include maximizing happiness, minimizing unpleasantness, and promoting the greatest good for the greatest number of people (Mill, 2017). Utilitarian ethics also focus more on the consequences of actions rather than on the act itself. In fact, one of the challenges of applying a utilitarian ethical framework to business operations is balancing the need for achieving the most desirable outcome possible while also minimizing the use of means that might be ethically spurious. Because utilitarian ethics are focused on positive outcomes, though, it is in the best interests of the organization to pursue policies and practices that are in line not only with prevailing legislative and legal frameworks but also the prevalent normative guidelines. When goals include meeting financial objectives or penetrating new markets, the company considers the long-term effects of its actions.
Ultimately, a business will be focused on meeting core objectives that may include enhancing profitability for shareholders, cornering the market, or attracting the best talent to the human resources pool. Whatever objectives the organization establishes, it will reach those goals when considering how to maximize gain for the greatest number. Maximizing gain for the greatest number makes sense from a business point of view if the goal is to gain market share, retain top employees, and forge relationships with the maximum number of clients, suppliers, and strategic allies. Focusing only on the needs of a few in the C-suite will have the opposite effect, which is why utilitarian ethics are pragmatic, sensible, and good for business. In a globalized environment, utilitarian ethics also provide a universal framework rather than imposing a type of moral law that is dependent on culture, tradition, religion, or regional laws.

Libertarian ethics can help businesses understand the importance of respecting the rights of individuals, respecting and valuing diversity, and honoring the need for autonomy. Rooted in virtue ethics, libertarian ethics also focus on the development of good moral character within an organization’s leadership as well as its entire staff (Powell, 2013). Like utilitarian ethics, libertarian ethics are not predisposed to rules but nevertheless realize the importance of overarching ethical tenets that foster good business relationships.

Libertarian ethics prove important from a business standpoint because leaders with strong moral character who respect the efficacy of alternative viewpoints will be more attuned to the diverse needs of clients and employees. To create a harmonious work environment, leaders need libertarian values that empower others and solicit feedback. Similarly, libertarian ethics prevent unproductive managerial styles like micromanaging, instead allowing each employee to reach goals in the way that is most effective for the individual. A libertarian point of view also helps international companies forge better relationships with partners, enabling the firm to establish footing in spite of challenges like unique regulatory environments, different communications styles, and different attitudes towards specific moral conundrums.

An ethic of care seems more in line with healthcare ethics than with business ethics, but research increasingly reveals the importance of incorporating the principles of caring into the business environment. Caring entails genuine concern for the implications of one’s actions as a business leader and also as a company. For example, Linsley (2017) shows how an ethic of care helps organizations reach sustainability and corporate social responsibility goals, while also dramatically improving crisis management potential (p. 307). When the organization develops a strong ethic of care, its decisions will be directly relevant to resolving problems and engendering trust.

Caring guides morally responsible behavior at every level of internal and external operations, including human resources policies and practices but also protocols for resolving conflict in the external environment. Moreover, an ethic of care directly enhances a firm’s capacity to be more environmentally sustainable in its practices and also more in tune with the call for social justice. Caring about employees reduces turnover, increases motivation, and ensures the long-term success of effective teams (Leonard, 2018). Caring about customers or clients is obviously one of the best strategies for ensuring brand loyalty, preserving the reputation of the firm, and gaining long term strategic advantages over competitors that act only from self-interest.