Unit 1 Contd.

What is Theory?
Adopted from Greek word, ‘theoria’

meaning a looking at, beholding,
viewing.
Theory is an analytical tool for

contemplating, understanding,
explaining, and making predictions
about a given subject matter, or call it a
phenomenon.
Theories of Business Ethics helps in:
• Serve and protect business interests
• Protect the interests of all stakeholders of business and
thus, earn trust and confidence of society in business’s
activities
• Fulfill the stakeholders’ expectations to the maximum
extent possible.
• Prevent damages and harms to society caused by business
operations.
• Contribute to the well being of the society by discharging
philanthropic and social welfare activities
• Work not only with wealth motive but with welfare motive
also
• Contribute to the revenue of the Government by paying
fees and taxes.
Teleological Theories
• Adopted from the Greek word, ‘telos’ meaning
end, goal or purpose. Therefore, teleology is
the study of ends, goals and purpose. A moral
theory is considered teleological when actions
finally bring about good or happiness.
• As consequences are taken into consideration
to judge the rightness of an action, this theory
is also called, ‘Consequentialist’.
Consequentialist or Teleological theory
has 3 forms:
• Ethical Egoism: an action is morally right if the
consequences of that action are more favourable
only to the agent performing that action.
• Ethical Altruism: an action is morally right if the
consequences of the action are more favourable
than unfavourable to everyone except the agent.
• Utilitarianism: an action is more favourable if the
consequences of that action is more favourable
than unfavourable to everyone
Certain strengths of Teleological
Theories
1. Very much in line with general moral
reasoning: Moral reasoning in favour and
against performing any action depends on the
benefits produced or harms caused by the
action. Example: actions like speaking the
truth, abiding by the law and caring for public
property results in benefits and therefore, are
regarded as morally right.
2. Use of objectivity in decision making: because
benefits produced and harms caused can be
measured and in turn goodness can be
ascertained, teleological theories helps in
making the best decisions amongst the
alternatives available.
Theories under Teleological Theory
1. Theory of Utilitarianism
2. Theory of Justice and Fairness
3. Theory of Virtue
Theory of Utilitarianism
Evolved from the word ‘utility’. Therefore, is
based on the principle of utility where one’s
actions add to the overall utility of the
community impacted by those actions.
Jeremy Bentham (1748-1832) and John Stuart
(1857-1922) Mill discussed this theory in the
19th century.
• Jeremy Bentham argued, “ an action is right if and
only if it produces the greatest balance of
happiness of pleasure over pain for everyone”.
• So, Utilitarianism is based on the following 4

theses
1. Consequentialism
2. Hedonism
3. Maximalism
4. Universalism
Consequentialism
• First coined by G.E.M Anscomb in her essay, “
Modern Moral Philosophy”. This theory holds
that rightness or goodness of any action
ultimately depends on the consequences it
produces.
• Therefore, from consequentialist viewpoint, “
a morally right action is the one that will
produce a good consequence.
Hedonism
• This theory asserts that utility of any action
depends on the pleasure it generates.
Therefore, a hedonist will strive to maximise
pleasure in comparison with pain
Maximalism
• The rightness of action is determined only
when it creates greatest amount of good for
greatest number even if the action involves
some bad consequences as well. ….as
accountants do, Bentham and Mill suggest
that pain may be deducted from pleasure, the
way net worth is determined by deducting
debts from assets.
Universalism
• Consequences of an action need to apply to
everyone not only to ourselves.
Utilitarianism vs Universalism
• As may have already become apparent, the Universalist and the Utilitarian
approaches are each other’s opposites in many regards. Where the
Universalist approach focuses on good intentions and discourages using
anyone as a means toward our ends, the Utilitarian approach focuses on
good outcomes. This signifies that others may have to be used as a means
toward the desired end. While the Universalist approach emphasizes
consistency at all times through its universalizability underpinning, the
Utilitarian approach supports flexibility and thus, different decisions are
based on the needs and circumstances at hand. Yet, there are some
foundational similarities in these two theories as well. Both aim to
eliminate selfish decision-making: the Universalist approach does so by
refraining from considering others as a means toward our selfish ends
while the Utilitarian approach does so by considering the greatest good
for the greatest number of people involved. Both theories perceive an
attitude of universal impartiality as a foundational requirement. “On this
view, it is irrational to cast one’s self as an exception to some universal rule
or policy without some justification, since that would involve asserting an
arbitrary difference” (Volkman, 2010, p. 384).
On a less positive note, both theories share the weakness of
undesirable outcomes. The Universalist approach does so by being
intention-based, and good intentions don’t necessarily lead to good
outcomes. The Utilitarian approach does so by focusing on
outcomes that may nonetheless turn out to be different from what
was planned due to insufficient data, unexpected turns in the
circumstances, or the uncertainty of life. Both theories remain
prominent, regardless of their weaknesses, and both have the
potential of gaining even more appeal due to the trend of
globalization and thus an increasingly interwoven world: the
Universalist approach due to its “universalizability” test, which may
not seem so far-fetched as the world continues to become a global
village, and the Utilitarian approach due to its flexibility, which may
continue to gain attraction in diversifying environments.

Unit 1 Contd.

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Unit 1 Contd.

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What is Theory?

Adopted from Greek word, ‘theoria’

Theory is an analytical tool for

• So, Utilitarianism is based on the following 4

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