Starting a Business: Business Ethics

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Business leaders have to make important decisions every day. These choices are led by some of the ethical behavior principles that should be adhered to achieve success in business. Before starting a business, it is essential to understand the business ethics theories to know what kind of business to try. Also, some guidelines are adopted before arranging a business enterprise, for instance, the company's legality (Gustafson et. al, pp 148). This essay attempts to examine the drawbacks and strengths of the business ethics theories while paying particular attention tom some case studies.

Case Study One: Not so _x0091_Magic Mike_x0092_

This case study presents a scenario of a strip club kind of business. According to Utilitarianism theory, something is considered good/ moral or beneficial only when it has the ability to give the greatest good to majority of the people (Mill, John , pp 24). According to the theory, that activity that produces optimum results for all or majority is considered good/moral. When it comes to business decision making processes, this theory answers the question whether the activity being carried out is beneficial or productive to the people at large. As much as business leaders would have the passion to start up their businesses, the need to create wealth and employment comes second after considering whether the business would be beneficial to the majority or not.

Using our case study one, the two entrepreneurs, Steve Bernejee and Nick DeNoia opted to establish a strip club in Los Angeles. From the case study of the strip club business, we clearly identify how it brought more harm than good to the owners and the society at large. Ethically, in making a comparison between this kind of business and the Metropolitan Opera in New York, an outfit that calls itself _x0093_a vibrant home for the world_x0092_s most creative and talented artists working in opera_x0094_, the champions of the utilitarian theory would consider the latter as the best venture to engage in. looking at the advantages that come with this theory are; it helps in creating a happy world. Since the theory focuses on only the morals and the good choices that can benefit most people in the society, most people then lead a happy life. Relating to the case one above, this business decision of setting up a strip club is disapproved. This is because the moral obligations are not fulfilled. Secondly, it does benefit only a few members of the society, particularly the owners and the stakeholders as they would earn some income from it. This theory, on the other hand has some setbacks. Since we are all created differently and have different perceptions about life, it is quite hard to set the standards of what is good and bad for all people. Whatever is good to one person may be considered immoral to another person. Therefore, this theory since it does not specify what is good or bad cannot be used as a guideline for all. According to our above case, the business would be good to the stakeholders and all those who share the same school of thought. Secondly, another drawback is evident since no one can determine what the future holds. Perhaps if the owners knew that their business would not prosper they would not have engaged in it in the first place.

Case two: The Ford Pinto

This case presents a case of moral issues and honesty in conducting one_x0092_s business. The main idea expressed Virtue ethics theory is how to ensure that an individual becomes a better person and has some virtues instilled in them. In other words, it gives a moral reasoning on what is the most appropriate thing to do when one is faced with an ethical dilemma. According to our case study of The Ford Pinto, it is evident how the Japanese cheaply produced goods flooded the market. The fact that the Japanese products were thriving made other industries panic looking for market. The advantages of the Virtue Ethics theory are, focuses on making one a better person. This means that this principle is not egged onto any theory, rather it is directed towards making one a better person. The Japanese capitalized on this idea and ensured that they had the best of themselves despite offering low quality products. Another advantage of this theory is its partiality in making decisions. This theory acknowledges that partiality is part of human nature especially when it comes to dealing with decisions that concerns our close relatives or families. According to our case study presented we realize how some partiality has been exercised in making some business decision.

Flipping the other side of the theory are some drawbacks. As discussed above, this theory focuses on instilling the right virtues to an individual. In that connection therefore, the virtues of a certain time in history cannot be compared to the virtues of today (Chappell, Timothy, pp 110). Furthermore there are no standard guidelines on what measures the virtues. This therefore is a drawback to this theory. Secondly, at the end of struggling to instil virtues in someone, there are no much benefits. This is because the developed virtues may lead us nowhere at the end of the day. Therefore, giving a critical look, these virtues are just developed for the sake of having them; otherwise they may not be so beneficial in our day-to-day activities. Another drawback of this theory is that virtues do neither dictate a right or a wrong action. Generally, virtues are described as a kind of behaviour that portrays moral standards of the highest order. Therefore, the virtues do not exactly point out the course of action to engage in whenever one is faced with an ethical dilemma. In the case of Ford Pinto, when the company was faced with some dilemma in their business, there are no spelt out actions to take. The last drawback of this theory is that it does not predict or tell the motives of an individual. Therefore it is hard for one to know the decision one is planning to undertake. For the case that is presented, the Ford officials encountered a total dilemma in deciding what to do, finally, they decided to neglect the safety of the consumer by going against the required standards set by the National Highway Traffic Safety Administration (NHTSA). Thus had the NHTSA known of the decision that the Ford officials were about to undertake, they would have taken action against the company. Thus, this explains the negative effect of this kind of theory.

In a nutshell, the above two theories namely, The Utilitarianism Theory (Welfare) and the Virtue Ethics theory (the Good life) are well explained and both are demonstrated in the cases discussed above. The above two theories are also referred to as the normative theories. Both ethics emphasize in building up the moral character of a person (Bishop, John, pp 563). They are therefore correlated in some manner. The utilitarian view considers the outcome of the event whereas a virtue ethicist on the other hand will advise one more or less like the Bible quote that goes, _x0093_Do unto others what you would want done to you._x0094_ The founding basis for a utilitarian is the activity that promotes the best yield whereas for the virtue ethicist will concentrate on both the vices and virtues to make a firm ground in the decision making processes.


Bishop, John D.( 2000) "A Framework for Discussing Normative Theories of Business Ethics." Business Ethics Quarterly, vol. 10, no. 3, , p. 563.

Chappell, Timothy. "Virtue ethics." Ethics and Experience, pp. 97-124.

Gustafson, Andrew.( 2010,) "Rorty, Caputo and business ethics without metaphysics: ethical theories as normative narratives." Business Ethics: A European Review, vol. 19, no. 2,  pp. 140-153.

Mill, John S. "WHAT UTILITARIANISM IS." Utilitarianism, pp. 8-38.


October 12, 2022




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