Bailout of General Motors based on Utilitarianism versus Egoism

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Both management setups include the use of ABCDs in decision-making. To successfully make a sound decision in the business world, one must determine the issue facing the company, brainstorm potential alternatives, and weigh both the negative and positive outcomes of the endeavor. Furthermore, decision-making is followed by act implementation and assessment of the overall result.

Utilitarianism and egoism are ideologies of consequentialism, a philosophical philosophy that holds that the outcomes of one's acts serve as the basis for every decision or morality against that behavior. The two theories focus on the consequences of conduct as the prime stimulus of that action and any appraisal of whether or not that conducts is moral (Arnold, Beauchamp, and Bowie 17). The main difference between the two theories is where those acts are directed.

Utilitarianism versus Egoism

Any action we take in our daily undertaking has consequences and the outcomes of our actions determine the morality of that action. As a result, one has to decide whether that outcome was good or bad. Based on the theory of utilitarianism, our actions are defined by the extent to which majority of stakeholders benefit. Therefore, this theory depicts that a moral consequence is one which produces the greatest good for a large number of individuals. Thus, a moral action is the action which is most beneficial to the entire population. Utilitarianism has multiple definitions and perhaps the best could denote happiness or best chance for survival (Arnold, Beauchamp, and Bowie 19). The theory elicits the moral action that is beneficial to a large number of people aftermaths. Utilitarianism is one way to determine whether the consequences of an action are moral or immoral.

However, utilitarianism is not the only way to gauge the consequences of an action. The other viewpoint is egoism, where morality is defined by the impact of an action on oneself. Here, one is not worried about the greater good; one is worried about his/her own self-interest. In the ethical egoism theory, it is considered less moral to risk your own life than to get killed saving somebody else (Arnold, Beauchamp, and Bowie 24). The ethical egoism depicts selfishness and it doesn’t serve the greater good for the population. The egoist argues that a person is self- interest creates a formidable sense of being responsible to others. The logic here is that people who practice ethical egoism get a bad reputation and they are rarely assisted in their times of need (Arnold, Beauchamp, and Bowie 24).

Consequently, to achieve the greater good for the entire population, one ought to adopt the utilitarianism theory and forego the ethical egoism. Unlike the egoism theory which serves one own self-interest, the utilitarianism theory needs self-sacrifice and forethought to figure out how your actions will influence the majority of the people, not just yourself (Arnold, Beauchamp, and Bowie 27). For better decision making, managers and chief executive officers must adopt the use of utilitarianism theory in conjunction to the ABCDs of ethical decision making.

There are plenty of reasons for the government to use the taxpayers’ money to save a private company. Looking at the general scope of the employment sector, the General Motor (GM) carries the day in terms of the number of employees it engages in its service delivery and poor decisions not to rescue it will risk unemployment and poor economy community (United States et al. 23). The general motors’ company consist of both the primary and secondary stakeholders who can be affected if the corporation is not rescued. The primary stakeholders include; the shareholders, the taxpayers, the employees, the government and the GM. The secondary stakeholders include the suppliers, the customers, and the competitors.


Bailout for a corporation is crucial to all the stakeholders. For the government, the positive side of it is that cases of unemployment will not rise in the country environs. Secondly, the cases of paying for unemployment benefit will not occur and there will not be a depreciating effect on the country economy at large. Despite the positive side of bailout, there are negative consequences whereby other corporation will take the risk at the expense of the government bailing them because they are presumed as too large to fail and without bankruptcy, evaluation of risk by organizations is usually incorrect (United States et al. 28).


To the taxpayers, the bailout will facilitate achievement of the initial desired outcome which includes the existence of a stable business atmosphere and attainments of long-term desired consequences are stable to emergent jobs and an unswerving economic society (United States et al. 22). Nonetheless, there are negative consequences associated with the bailout on the taxpayers, deviating tax money that could be used elsewhere in government projects.

General Motors

The desired consequences for the bailout for the General Motors is to continue to strengthen the business, evade bankruptcy, and uphold the reputation of the corporation with its consumers. Although the bailout may hurt the corporation’s reputation, an actual bankruptcy is exceedingly worse for the company status among customers.

Employees in the General Motor industry

For the employees in the GM industry, the bailout will help reduce the number of workers laid off. All these positive consequences of the bailout apply to GM suppliers as well as their employees. The bailout will facilitate uninterrupted production which as a result contributes to more business and enhanced job stability (United States et al. 26).


Furthermore, the effect of rescue for competitors will be short term negative, since, they may gain more market share. However, losing out additional market share has depressing consequences especially for low wages individuals who mostly labor for competition ultimately leading to poor sales.


From the two theories, utilitarianism endeavors to capitalize on positive consequences by reducing damage to the involved parties while ethical egoism seeks to exploit good by keeping the person contented. The result of bailing the private organizations is very important as it benefits an enormous population. The GM Corporation deserves bailout as well as other large business firms in the country (United States et al. 29). The objectives of the firm based on the utilitarianism are judged by the total number of individuals that benefits from the action of the company as opposed to the total number of people affected (Arnold, Beauchamp, and Bowie 23). Ultimately, the positive consequences brought by bailout to the GM are much greater than the negative ones. Therefore, it is ethical for the government to bailout the GM. the government decision to rescue the private corporation will create happiness for the greatest number of individuals.

Works Cited

Arnold, Denis Gordon, Tom L Beauchamp, and Norman E Bowie. Ethical Theory and Business. Boston: Pearson Education, 2013. Print.

United States et al. Lasting Implications of the General Motors Bailout: Hearing before the Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending of the Committee on Oversight and Government Reform, House of Representatives, One Hundred Twelfth Congress, First Session, June 22, 2011. Washington: U.S. G.P.O., 2011.Web.

January 13, 2023

Business Economics

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