When you hear about unethical business practices, such as dumping toxic chemicals or employing the use of child labor, the normal reaction is to wonder what on earth the company’s management was thinking.
Most companies operate with a sense of right and wrong that is based upon one of two schools of moral philosophy. If you figure out whether the organization is operating on a consequentialist or rules-and-rights philosophy, it will not really change anything. However, the way you judge the unethical practice will be based upon a greater understanding of what the company’s leaders were thinking.
Consequentialist School of Moral Philosophy in Business
Consequentialist school of moral philosophy – an action’s value is determined solely by the action’s consequences. For example, if a company dumps a toxic chemical onto the ground and it seeps into the local water system, making people sick, a Consequentialist would say that dumping was bad.
If the same company dumped the toxic chemicals onto the ground and no one got sick immediately, a Consequentialist would say that the dumping had value because the company increased its profit margin. This is similar to the “Speeding is only illegal if I get caught theory.”
Businesses that are walking just this side of the law, or even breaking the law, but also not going far enough to operate in a manner generally viewed as ethical, are functioning consequentially. This means the company is focusing on picking up the maximum short-term gain.
Rules and Rights School of Moral Philosophy in Business
Rules-and-Rights school of moral philosophy – An action’s value is determined by whether it follows or breaks the rules, and rewards and discipline follow accordingly. Following a predetermined list of rules provides a set of rights.
This type of deontological philosophy begins in childhood, when the parent offers the child a treat for good behavior and punishes for bad behavior.
For a business ethics example, a company employing low income workers gets a portion of the labor paid by the government, has the opportunity to promote their philanthropy, and a also gains a nice tax break at the end of the year.
Businesses that go by the book, and sometimes step forward to go beyond the legally required minimums, are operating with the expectation of reward in exchange for good deeds.
Even if a company does not announce which school of moral philosophy it follows, an observer can usually discover and evaluate which school of philosophy is in play.