Deontology Should Govern Decision Making in Business

TABLE OF CONTENTS 1. Introduction 2 2. Decision making in business   2 3. Characteristics of deontology .   3 4. Arguments in favour of applying deontology in business   4 5. Arguments against applying deontology in business   6. Conclusion   9 References   9 â€Å"Deontology should govern decision making in business†. Discuss. 1. Introduction Boylan (2000: 2) refers to ethics as â€Å"the science concerning the right and wrong of human action†. Teleology and deontology are the two major schools of thought that dominate ethical decision-making in the context of business.Teleology refers to consequences and is founded on the principle of utility maximisation. This concept judges behaviour by its effects on the overall welfare of all stakeholders. Deontology, on the other hand, views consequences as secondary. Under this philosophy, decisions and acts are evaluated in terms of their intrinsic worth. Deontology is more demanding than teleology, because it rates decisions and acts in absolute terms. For example, even if a decision or action satisfies the rule of the majority, deontology would reject that articular option if, as a result of it, a minority of stakeholders are likely to suffer. 2. Decision making in business When business firms are charged with infractions, and when there is legal investigation on the managers of those firms, there is a concern raised about moral behavior in business. Hence, the level of trust, which is one of the foundations of the business environment, is threatened. In fact, managers often have to make decisions under economic, professional and social pressure. The decision-making process will always present ethical challenges. Is this the right thing to do?This question is the essence of the ethical dilemma for any decision maker in today’s corporations. A collection of factors will be taken in consideration in answering to this question. Is it right for the company? Is it right for the shareholder s? Is it right for the society? For the customers? For the decision maker himself? Indeed, business people have many sources of ethical theories to choose from when making decisions. Each moral system gives a unique perspective on different situations. Managers and business owners use these guidelines to act in fair and socially responsible ways.The ground rules about which a decision maker will care are hence highly dependent on the moral approach. 3. Characteristics of deontology Deontology bases itself on the intrinsic worth of the decision or act. No allowance is made for unethical conduct under this philosophy. A business manager, who accepts deontology, will hold that some moral principles are binding, regardless of the consequences. Deontological ethics is the opposite of consequential ethics. The moral person does his duty regardless of the consequences.If a manager takes a deontological approach to ethics, he defines his duty by asking â€Å"What is the universal principle to be followed? † Deontological ethics refers to an established source of ethics guidance, such as industry standard or an official code of company conduct. In fact, Immanuel Kant refined deontological ethics and posited that the nature of morality is to do one’s duty even when we are not inclined to do it, and not because we are afraid of the consequences of not doing it. Kant referred to deontology as the categorical imperative.Under this principle, a moral imperative must be categorical or absolute, providing a lasting motive to adopt a particular course of action, categorized as ‘right’ or ‘ethical’. The rationale behind the principle of deontology is that each action has intrinsic worth and unconditional value. Ferrell et al. (2008) refer to deontology as non-consequentialism, ethical formalism, or ethics of respect-for-persons. The principle of deontology states that decisions should be judged on the circumstances in which they are made, rather than by their consequences.Deontology is the study of duty. In philosophy, it means specifically ethics based on duty regardless of consequences. Deontological ethics refers to rules stated in terms of other features of the courses of action, notably whether they represent fulfillment of an agreement or other duty or right, and/or involve the treatment of others with due respect. Since human beings have free will and thus are able to act from laws required by reason, Kant believed they have dignity or a value beyond price. Thus, one human being cannot use another simply to satisfy his or her own interests.This is the core insight behind Kant’s second formulation of the categorical imperative: â€Å"Always treat the humanity in a person as an end and never as a means merely. † What are the implications of this formulation of the categorical imperative for business? 4. Arguments in favour of applying deontology in business The deontological theory states that peo ple should adhere to their obligations and duties when analyzing an ethical dilemma. This means that the person will take into consideration his obligations to other people involved and the society at large when taking a decision thus fulfilling his duty which is considered ethically correct.A deontologist will never break a promise made to other parties. He will never to do something that is against the law. Thus a deontologist will be very consistent in his decision making which will be based on duty of the individual. Deontology provides the basis for special duty towards other individuals like your family members. For example, older children have a special duty of protection and care for their younger siblings, in the absence of parents older children are expected to take due care of the younger ones preventing them in doing things that may cause harm to themselvesDeontology also praises those who do an act of supererogation; this is when someone exceeds his duties and obligatio ns towards other persons or the society at large. For example, in case of a fire in a building, someone may go inside the building on fire risking his own life to save the lives of others. His duty would have been to call the fire services where fireman are equipped to handle this situation but instead of waiting for the firemen , he exceeds his duty by saving other people himself. It should be pointed out that the â€Å"respect for persons† principle does not prohibit commercial transactions.No one is used as merely a means in a voluntary economic exchange where both parties benefit. What this formulation of the categorical imperative does do is to put some constraints on the nature of economic transactions. Another concern about contemporary business practice is the extent to which employees have very limited knowledge about the affairs of the company. In an economic view, a Kantian approach to business ethics terminology, there is high information asymmetry between managem ent and the employees.Wherever one side has information that it keeps from other side, there is a severe temptation for abuse of power and deception. A Kantian would look for ways to reduce the information asymmetry between management and employees. In practical terms, a Kantian would endorse the practice known as open book management. The adoption of practices like open book management would go far toward correcting the asymmetrical information that managers possess, a situation that promotes abuse of power and deception. Open book management lso enhances employee self-respect. For a Kantian, meaningful work: * is freely chosen and provides opportunities for the worker to exercise autonomy on the job; * supports the autonomy and rationality of human beings; work that lessens autonomy or that undermines rationality is immoral; * provides a salary sufficient to exercise independence and provide for physical wellbeing and the satisfaction of some of the worker’s desires; * enab les a worker to develop rational capacities; and * does not interfere with a worker’s moral development. . Arguments against applying deontology in business Management, by definition, is the planning, leading, organizing and controlling available resources to achieve goals and objectives. Hence, one of the basic functions of management, controlling, is according to Harold Koontz, â€Å"the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished†. Consequently, it is largely based on outcomes and accountability of the business.Managers are therefore required to be accountable towards achieving their objectives and one of the ways to achieve this is by analyzing whether their actions are in line with expected outcomes and henceforth modify their future decision making process accordingly. In fact, this function is considered as one of the fundamental aspect of management and deriving from this will give rise to a major shortcoming in management decisions. Relying on universalism and good will of managers will not be enough in management decision making to achieve the vision, goals and objectives set by the organisation.Deontology requires that managers’ decisions be based on duty instead of consequences and must be followed for its own sake irrespective of the outcome. Such stance is considered as inflexible. It should be noted that norms vary from culture to culture, society to society and even people to people. Consequently having a rigid stance in respect of decisions may not be the best initiative for managers. The definition of right and wrong will depend on the culture, individual or historical period.Decisions taken in particular societies might be considered as ethical while in others as non-ethical. In this context, it is easier to understand why, when faced with the requirement to select a model of how we ought to live our lives, many people ch oose the idea of ethical relativism, where that ethical principles are defined by the traditions of their society, their personal opinions, and the circumstances of the present moment. The idea of relativism implies some degree of flexibility as opposed to strict black-and-white rules.From this perspective, it is better for managers to base their decision as a result of interactions with individuals and social institutions. Moreover, by definition an organization comprise a group of people with common objectives. No organization would be able to survive without its â€Å"people† such as owners who risk their money in the business, employees who provide the mental and physical efforts required for successful working of the business or managers who are involved in the daily operations of the organization.Managers know that without its people there won’t be any organization. Hence, recognizing the stakes of such stakeholders is sometimes fundamental for the survival of th e company. Sticking to a â€Å"rule based† approach as proposed by deontology might not help in certain cases where human resource for instance is involved. Care based-theorists seek solutions to ethical challenges on a case-by-case basis. To do otherwise means applying a blunt instrument across all situations (Hovland & Wolburg, 2012).They recognize that their approach requires stepping out of a comfort zone of â€Å"infallible† rules, but because it is grounded in human relationships, their approach is more likely to find solutions based on fairness (Hovland & Wolburg, 2012). Care-based theorists assume that humans are interdependent and need others for survival (Tronto 1993), that moral reason involves the interplay between emotions and reason (Noddings 2003; Held 1993), and that moral solutions must work for people within the context in which they live (Slattery et al. n press). In 1970, Nobel Prize winning economist, Milton Friedman published an article under the provocative title ‘The social responsibility of business is to increase profits’ where he posited that the managers’ fiduciary responsibility is to make profits since it is the main reason behind the setting up of firms. He added that distancing from such objectives would simply mean a theft towards shareholders(Crane and Matten 2004).Hence, he vigorously favoured the philosophy that firms should only aim towards profit maximizing and any other responsibility can only be considered if firms achieve their main objective. If we look at the ethical egoism principle which stipulates that it is necessary and sufficient for an action to be morally right that it maximize one's self-interest, we can see that there is link between these two philosophies. Egoism differs in content from deontological theories such as Kantianism which give weight to the interests of others (Stanford Encyclopedia, 2012).Abiding to deontology in decision making and favouring any other consider ations than that of the shareholders own interests would simply mean drawing away from ethical egoism and hence would considered as a theft out of their pocket. On the other hand, Edward Freeman, who was one of the founding fathers of the stakeholder theory, challenged the idea of Friedman that the main responsibility of business was to maximize profits without any considerations for the interests of all those affected by the business, including customers, suppliers, employees, and, of course, stockholders.There are two principles underlying the stakeholder theory (Crane and Matten 2004): * Principle of corporate rights which requires that a corporation should not violate the rights of others to achieve theirs; and * Principle of corporate effect which requires that business should be accountable of the effect or impact on other parties. However, if we analyze the second principle, it is clear that it is drawn from the utilitarianism philosophy which considers morality on the basis of consequences of actions and the maximization of good to all sections of the society (Greenwood and De Cieri, 2005).Based on this principle of corporate effect, making decisions only on a sense of â€Å"duty† or universal principles may not necessarily give rise to the greatest good to the greatest number of parties and will be in contradiction to the Stakeholder Theory. 6. Conclusion The perceived weaknesses of deontological theories have lead some scholars to consider how to eliminate or at least reduce those weaknesses while preserving deontology's advantages. One way to do this is to embrace both consequentialism and deontology, combining them into some kind of a mixed theory.Given the differing notions of rationality underlying each kind of theory, this is however a difficult task. References: Stanford Encyclopedia of Philosophy, Center for the Study of Language and Information, Stanford  University, Stanford,  CA  94305 http://www. bio. davidson. edu/people/kabe rnd/indep/carainbow/Theories. htm http://atheism. about. com/od/ethicalsystems/a/Deontological. htm http://www. ehow. com/about_6686029_role-business-ethics-decision- king. html#ixzz2AatMlvUJ