Business Ethics: Transcending
Requirements through Moral
Leadership
------Chapter 7 – Utilitarianism
© Cavico & Mujtaba, 2005
CHAPTER 7 - Utilitarianism
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Introduction, Background, and Principal Tenets
Impartiality of the Analysis
Long-Term Consequences
Foreseeing Consequences
The "Good"
Distribution of the Good
Measuring Pleasure and Pain
A Utilitarian Analysis 99
Act versus Rule Utilitarianism
The "Justice" Problem with Utilitarianism
The Value of Morality - The Utilitarian Approach
© Cavico & Mujtaba, 2005
Utilitarianism
• Utilitarianism refers to a systematic theory of
moral philosophy developed by the British
philosopher Jeremy Bentham (1748 - 1832), and
elaborated on and refined by his primary disciple,
John Stuart Mill (1806 - 1873).
– Bentham was one of the earliest and the most
influential utilitarians.
– The utilitarians were more than moral philosophers;
they were social reformers too. They regarded
utilitarianism as an objective, scientific system of
ethics, not merely as abstract ethical theory.
© Cavico & Mujtaba, 2005
Utilitarianism & Actions
• Utilitarianism determines morality by focusing on the
consequences of actions. Actions are not good or bad in
themselves; they are judged right or wrong solely by virtue
of their consequences.
• A utilitarian, after identifying the action for ethical
evaluation, determines those people directly and indirectly
affected by the action. The utilitarian then attempts to
ascertain consequences of the action, good and bad, on the
affected parties. In the most challenging aspect of this
ethical theory, the utilitarian then strives to measure and
weigh the good as compared to the bad consequences. If
the good consequences outweigh the bad, the action is
moral; if the bad outweigh the good, the action is immoral.
© Cavico & Mujtaba, 2005
Impartiality in Analysis
• Utilitarianism treats all people as equally
important. Each person's life, happiness, pleasure,
and pain has the same value; each person's good is
as worthwhile as any other person's good. There
are no privileged persons. No one possesses
special importance; no person's pleasure or pain
counts more heavily than another's. Consequently,
there is to be no unequal weighing. An
impersonal calculation of the good is required. A
utilitarian, therefore, must acknowledge that other
peoples' welfare is just as important as one's own.
© Cavico & Mujtaba, 2005
Utilitarianism & Consequences
• The utilitarian ethical principle is based on consequences.
It is, of course, very difficult to foresee the consequences
of an action, even in the simplest of cases, and to predict
the future state of affairs resulting from an action occurring
in a modern, complex, rapidly changing, urban society is a
challenging task, indeed. The indefinitely large number of
people potentially affected, the uncertainty and indefinite
extensiveness of the future, the fact that some
consequences will never be fully knowable, and that others
will depend on later, independent choices of people,
indicate that ultimate consequences never are fully
foreseeable.
© Cavico & Mujtaba, 2005
Utilitarianism & Business Management
• The aim of business, of course, is to make money, and
business traditionally reduces the "good" to money. As a
matter of fact, the cost-benefit analysis commonly used in
business is a form of utility calculation. When a business
manager uses the cost-benefit analysis as a decisionmaking tool, however, he or she weighs the good and bad
monetary consequences as they relate to the firm, whereas
utilitarians weigh the good and bad results of an action,
monetary or otherwise, on everyone directly and indirectly
affected by the action.
© Cavico & Mujtaba, 2005
Distribution of the Good
• By underscoring the maximization of the good,
utilitarianism engenders another problem-a
potential conflict between the quantity of the good
and its distribution.
– Is utilitarianism based on an aggregative principle or a
distributive principle? That is, should the emphasis be
placed on the total amount of good or the number of
people who share in the good?
– There may be two acts: one produces a greater quantity
of good, but with a very narrow distribution; the other
produces a lesser quantity, but with a much wider
distribution. Which one should a utilitarian choose?
© Cavico & Mujtaba, 2005
Assumptions in Utilitarianism
• Utilitarianism assumes that one can measure on a common
numerical scale the quantities of pleasure and pain
produced by an action. Once one adds up the quantity of
pleasure and then subtracts from it the quantity of pain, one
thereby can determine whether the action produces more
pleasure than pain; and when comparing actions, one can
determine which produces the greatest total good (or
perhaps the lowest total pain). How this numerical
measuring is to be done and, indeed, whether it can be
accomplished at all are highly controversial theoretical and
practical ethical issues.
© Cavico & Mujtaba, 2005
Utilitarianism Analysis Steps
• The Action
• The Consequence
– Stakeholders
– Values Theory
• Weighing the Consequences
• Although not "scientific" doctrine, utilitarianism can be a useful tool
for making moral determinations. Individuals would benefit from
familiarity with the central tenets of this ethical theory-foreseeing,
measuring, and weighing the consequences of actions. A person who
does focus on consequences usually is concerned with the impact of
the consequences on himself. Utilitarianism, however, asks that a
person expand the scope of analysis and objectively anticipate the
consequences of an action on others.
© Cavico & Mujtaba, 2005
Rule Utilitarianism
• Rule utilitarianism is the utilitarian analysis
applied to general and broad classes,
categories, or types of actions, for example,
the morality of breaking a contract or
keeping one's promises. The moral result of
such a calculation is framed as a rule, and
individual actions then are judged right on
wrong by reference to the moral rule.
© Cavico & Mujtaba, 2005
Act Utilitarianism
• Act utilitarianism subjects individual,
particular, concrete actions to the utilitarian
test. A specific act is evaluated by
reference to its own unique consequences.
For example, one must calculate the
consequences of a particular lie, a particular
breach of contract, in unique sets of
circumstances.
© Cavico & Mujtaba, 2005
Criticism of Utilitarianism
•
The major criticism of utilitarianism is that this ethical theory does not account
for justice and may even run counter to it. The "right" or "moral" action under
utilitarianism may in fact be unjust! The greater good, pleasure, and happiness
very well may be maximized, but only by sacrificing justice. There always is
the possibility of exploitation of the few. Benefits for the majority can be
justified morally pursuant to utilitarianism by imposing sacrifices on the
minority. The expropriation of the property of the "wealthy," for example,
might bring substantial benefits to large numbers of people, but such an action
would be "wrong" despite the benefits for the majority.
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Utilitarianism also may allow the exploitation of the many. The few may
benefit greatly at the expense of the many, yet the sum total of good is
maximized. A slave-holding society, for example, if it provides a greater sum
of goodness than one in which all people are treated equally, is moral! A more
modern example emerges when a company hires illegal immigrants at very
low wages to enable the company to compete.
© Cavico & Mujtaba, 2005
The Value of Morality
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Accurately and narrowly state the action to be evaluated (e.g., is it moral for a particular
company to...?)
Identify all stakeholders who are directly and indirectly affected by the action
(including the company's constituent groups as well as society).
Ascertain whether there are some obvious, dominant considerations that carry such
weight as to predominate over other considerations.
Specify for each person or group that is affected directly or indirectly all the reasonably
foreseeable good - pleasurable and bad - painful consequences of the action, as far as
into the future as appears appropriate, and consider the various predictable outcomes,
good and bad, and the likelihood of their occurring.
For each person and group, including society as a whole, measure and weigh the total
good consequences against the bad consequences.
Quantify the good and bad consequences for each person and group on a numerical
scale (for example, -5, -4, -3, -2, -1, 0 +1, +2, +3, +4, +5) representing units and
extremes of pleasure and pain.
Sum up all the good and bad consequences.
If the action results in a positive number, it produces more good than bad and is a
morally right action; and if the action results in a negative number, it produces more
bad than good and is morally wrong.
© Cavico & Mujtaba, 2005
Summary
• Although Bentham and Mill and their adherents
may not have persuaded all that utilitarianism is
the "right" ethical theory or a "scientific" one, they
did establish utilitarianism as permanent and very
influential ethical position. They also expanded
dramatically the moral intelligence and sensitivity
of people by drawing attention to the full
consequences of actions and by emphasizing the
vital happiness of all sentient beings capable of
feeling pleasure and pain.
© Cavico & Mujtaba, 2005
Reference
Cavico, F. & Mujtaba, B., (2005). Business Ethics: Transcending Requirements
through Moral Leadership. Pearson Custom Publications. U.S.A. ISBN: 0536-85783-0. Address: 75 Arlington Street, Suite 300. Boston Mass, 02116.
Phone: (800) 374-1200. Or: (800) 922-0579.
© Cavico & Mujtaba, 2005