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CONSEQUENTIALIST THEORY A Discussion of Ethical Dilemmas and

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A Discussion of Ethical Dilemmas and Sustainability Initiatives

By: Bonnie Aylor / 2030815

For: BMGT8008 / Winter 2015 / Unit4d1 / Dr. Janet Salmons

Introduction
In the subject area of ethics many situations can be reviewed and analyzed for a sense of

what is moral. There are several different principles to go by when analyzing current research in

business in order to determine its level of morality. Two such principles include those of

Utilitarianism and Consequentialism. This post will provide a review of what these two

principles are individually and then compare them for their differences. Then it will attempt to

explain an ethical dilemma through the perspective of one of these two principles.

What are these Principles?

(Schafer-Landau, 2015). To the consequentialist the moral value of an act is determined by the

level of benefit toward the greater good that comes about as a result of an action. There are two

types of consequentialism that can shape a perspective: act consequentialism and rule

consequentialism (Schafer-Landau, 2013). Most ethicists agree that while act consequentialism

is good for use in momentary decision-making when there is no rule to refer too, its facets are

way too general to be counted as an overall principle of morality. This is because act

consequentialism requires that the moral decision-maker go from situation to situation to

determine what constitutes the most benefit towards good with no guidelines for choosing this

decision except that it be the action that generates the outcome with the most benefit to society

(Schafer-Landau, 2014).

However rule consequentialism requires that the moral decision maker consult a set of

rules to determine the most good in the outcome (Schafer-Landau, 2013). Therefore, the

consequentialist will decide which rule in the situation will generate the most good in society as

an outcome of the situation - the rule becomes an end in the decision rather than a means of

generating an outcome (Schafer-Landau, 2015). Consequentialists will use a general formula

that connotes how many people will generate the most good from all populations effected and

whichever creates the largest reach for that good is the decision to be made. An example is laid

out by Schafer-Landau (p.429-30, 2013)that shows how one decision might leave every member

of one group worse off and all members of another group ten times more well off. Although the

second group is very large while the first is small, the greater good is best found in a second rule

that leaves most members of both groups very well off, even though there are some members

who are not. However, with the act consequentialist the morally right action either maximizes

the overall goodness in society or it minimizes those things that are not good when the action is

not able to maximize goodness (Schafer-Landau, 2013).

Utilitarianism
Utilitarianism is actually a part of consequentialism (Schafer-Ladnau, 2013). To a

utilitarian, the greatest good is actually derived from the greatest amount of happiness

(Gastufson, 2013). Therefore, each act either maximizes happiness or minimizes those things

that generate unhappiness (Schafer-Landau, 2015). For a rule utilitarianism, "acts are right if and

only if they are permitted by certain rules, namely those that would maximize the overall amount

of happiness were they generally adhered to (Schafer-Landau, p413, 2013). Many utilitarian's

refute this rule stating that there are times in which the rule has to apply to that act that

minimizes unhappiness because there are some situations in which happiness cannot be

maximized (Schafer-Landau, 2013). Both utilitarian's and consequentialists believe that there

has to be a margin of error incorporated into the rulemaking.

Comparison
The main difference between consequentialism and utilitarianism is that utilitarianism is

a school of thought within the principle of consequentialism (Schafer-Landau, 2015). So, while

the utilitarian believes the ultimate goal is to maximize happiness, the consequentialist may use
 Consequentialist Theory Wednesday, February 4, 2015 Page 3 of 7

many different topics to derive the greater good (Schafer-Landau, 2013). The utilitarian will

weigh the benefits of the act together for the purpose of the greatest amount of happiness that can

be generated. The consequentialist will look to two separate ideals of what is good to discover

which provides the greatest benefit in its prescribed outcome. For utilitarian moralists happiness

is the only outcome to weight, whereas the consequentialists will be weighing multiple

outcomes. To a consequentialist, maximization of happiness can be discovered as a rule in

consequentialist principle, however the maximization of fairness and the maximization of well-

being will hold just as much standing as the maximization of happiness, the only way to

determine which one is greater in a given situation is to weight the benefits against one another

(Schafer-Landau, 2013).

When calculating the benefits maximization outcome, a utilitarian moralist will weigh the

different means to discover which one will generation the most happiness or minimize the most

amount of unhappiness (Renouard, 2013). The measures are a little bit different for a

consequentialist. A consequentialist will weight multiple outcomes against each other to

determine which will generate the most good, regardless of the means (Schafer-Landau, 2013).

So an act consequentialist will weight multiple outcomes in general, while a rule consequentialist

will categorize the situation into a set of rules and then weight the benefit of each rule, as each

applies to the situation, in order to fine the greatest amount of good. Therefore, to a utilitarian

moralist, rule utilitarianism is irrational and the preference is to act utilitarianism (Schafer-

Landau, 2013), while to a consequentialist - act consequentialism can be refuted except in an

emergency because there are no real guidelines to determine what good the outcome will

generate unless there are a set of rules stating those greater goods.
 Consequentialist Theory Wednesday, February 4, 2015 Page 4 of 7

Ethical Dilemma
The ethical dilemma that will be reviewed in this post has to do with sustainable

development. The review looks at the efforts of the Triodos Bank towards the financing of

sustainable development projects (Doussa & Keuffer, 2013). The main dilemma is in regards to

the fact that the bank takes a stance to use a crisis in order to generate a new product for

financing sustainable development agendas, rather than to work ahead of a crisis and attempt to

prevent it. Although there are some preventative agendas that are financed, these have not

actually been generated until the crisis developed. One other dilemma regards the banks efforts

to finance domestic banking for the purpose of economic relief in a crisis (Doussa & Keuffer,

2013), but the bank uses conflicting terms due to its exception to the common rule of not issuing

credits except in the case of intended purchases made for environmentally sustainable products.

From a consequentialist standpoint it is important to review the level of the greater good in these

decision making efforts.

Discussion
In a research conducted by Cecile Renuoard (2013), it is debated what constitutes a

reason for corporate responsibility, and namely sustainable development, using a utilitarian

moralist point of view. The author describes how it is important that the corporation remain

economically beneficial to itself, it stakeholders and its employees, but that the corporation is a

part of the whole of society. She then uses an example of the lives of impoverished peoples to

justify the requirement of the achievement of the maximization of happiness. To Renouard

(2013), it is apparent that these impoverished people have learned to adjust to their situation and

have no inclination of the amount of miserableness that they truly are living in. These citizens

are willing to accept things like a lack of rights to women because this is all that they know, they

are unable to feel envy towards men. Furthermore, they are willing to accept a lack of education
 Consequentialist Theory Wednesday, February 4, 2015 Page 5 of 7

as a circumstance that is not unjustified because they do not know what obtaining a real

education is (Renouard, 2013). If these people were given the chance to feel what true happiness

is, it would contribute to the greater good of society because they would understand the calamity

of their situation and take actions to repair it.

In the situation of Triodos Bank (Dossa & Keuffer, 2013), the bank is looking at societies

that have no inclination of what they are doing that could cause a crisis. Furthermore, the bank is

making no inclination to discover such situations ahead of a true crisis. Therefore, the effect of

the bank's efforts is minimized regarding the greater good since the outcome becomes neutral. If

the bank prevented the crisis by financing the prevention, the citizens in these regions would feel

a benefit before a harm existed. Therefore there would be a maximization of good and at the

same time a true minimization of harm. However, in creating the products after the crisis there is

no minimization of harm, only a maximization of good.

Just like in Schafer-Landau's (p.429-30, 2013) example mentioned above where the

greater good was the one in which the majority of both groups benefited greatly although a few

members of each did not benefit, in the situation of crisis prevention two groups would benefit -

those that have harm minimized and those that experience the maximization of good. This

would be the greater good in the situation because in the condition of crisis intervention the

group experiencing the minimization of harm in the first set are actually worse off because the

harm is not minimized and only one group benefits - the group experiencing the maximization of

a good. This can be carried over into the ideal of the domesticated loans. Without the exception

created for the purchase of environmentally sustainable products there are two groups that are

benefiting - the maximization of good through the ability to use the banks product, and the

minimization of harm by not receiving credits that they may not afford to pay back. For the
 Consequentialist Theory Wednesday, February 4, 2015 Page 6 of 7

exception there are also two groups - those experiencing the maximization of good through the

use of the bank's original product, and a second that may experience a harm due to the inability

to pay back the credits generated from the exception.

According to Gastufson (2013), the decision analysis include not only the immediate

outcome, but also decision produced to determine outcomes that lead into the future, for that

specific act. This exactly equates to the failure to minimize harm through the credits exception.

Some may argue this by saying that the true consequentialist will look at all of the effects related

to the means, noting that society might benefit from the use of the sustainable products.

However Schafer-Landau (2015) mention that the consequences of the means are not as

important as the final outcome of that one good being measured.

Conclusion
There are many perspectives that can be used to judge a moral act using ethics as a

framework. This post reviewed the perspectives of consequentialism and utilitarianism. The

consequentialist perspective was used to review an ethical dilemma related to the Triodos Bank.

Using an analysis of the maximization of the greatest good and the minimization of harm, it can

be determined that Triodos Bank would benefit from the creation of a positive ethics network

that works to discover the possibility of a crisis before the crisis actually hits. They can then

build products based on the prevention of such crisis.

References:
Dossa, Z., & Kaeufer, K. (2014). Understanding Sustainability Innovations Through Positive

Ethical Networks. Journal Of Business Ethics, 119(4), 543-559. doi:10.1007/s10551-013-

1834-8

Gustafson, A. (2013). In Defense of a Utilitarian Business Ethic. Business & Society Review

(00453609), 118(3), 325-360. doi:10.1111/basr.12013

Renouard, C. (2011). Corporate Social Responsibility, Utilitarianism, and the Capabilities

Approach. Journal Of Business Ethics, 98(1), 85-97. doi:10.1007/s10551-010-0536-8

Schafer-Landau. (2015). Ethical theory: an Anthology, 2nd Edition. John Wiley & Sons, Soussex,

Uk. Edited by Russ Shafer-Landau, 2013. ISBN: 978-0-470-67160-3

Shafer-Landau, Russ. (2013). Introduction Part IX. P 481-484. Ethical theory: an Anthology, 2nd

Edition. John Wiley & Sons, Soussex, Uk. ISBN: 978-0-470-67160-3

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