Some may find it surprising to learn that there is no perfect approach to dealing with ethically charged situations. In fact, people who subscribe to a “one best” approach can find themselves making decisions that, after the fact, others view as unethical. Similarly, lacking an understanding of the different approaches may lead to missteps because the decision maker fails to recognize the ethical implications of a particular situation.
When considering what to do in a situation with ethical overtones, it is useful to be familiar with different approaches to ethics. These varied approaches become ethical screens—similar to the opportunity screens. Taking a multifaceted approach can prevent someone from unknowingly making an ethical mistake. We will briefly consider three widely used approaches.
Aristotle, the Greek philosopher, provided one of the oldest approaches to ethics. To him it seemed that the aim of each person should be to perfect his or her inherent human nature, and if successful, become a person of virtue. By striving to be virtuous, and by emulating what people who are widely considered to be virtuous do in similar situations, we can, over time, develop habits of virtue. In modern terms, this is akin to choosing to observe and emulate exemplary role models.
Two issues arising from this approach can lead an entrepreneur to make poor decisions. The first is choosing the wrong person to emulate, such as former Enron CEO Jeff Skilling. The second is that neither the actions actually taken nor the consequences of the actions are directly addressed—only that the “court of opinion” holds the actions to have been virtuous.
A second approach to ethics focuses on the consequences or outcomes of actions. This approach is called utilitarianism, and its most often cited proponent is John Stewart Mill, a 19th-century English philosopher. It holds that the ethical person will always choose actions that will provide for the greatest good (or least bad) for the greatest number of people. When considering what action to take, an ethical entrepreneur acting from a utilitarian perspective would mentally calculate the impact of the action on each stakeholder. Therefore, it is not the action that is being judged as ethical or unethical, but rather the collective impact of that action. A familiar way of expressing this is the saying that “the ends (consequences) justify the means (actions taken).”
This is probably one of the most widely used approaches in business and is the only system many people consider. It is also known as Machiavellianism after the author of the famous book The Prince . The challenge with this approach is that you can hit a wall when conflicts and your own self-interest collide. For example, what is the ethical decision in the following situation? A person comes to your door armed with a gun. He asks for your spouse and announces that he has come to kill that person. In all civilized societies, it would be illegal, immoral, and unethical for you to kill this person threatening your family with no provocation other than his words. So what do you do?
A number of issues can make the utilitarian approach difficult to adhere to or can lead entrepreneurs to take actions that may be considered unethical. First, it permits decisions that may hurt some stakeholders, as long as the majority benefits from the action. Second, a narrow view of who the stakeholders are may lead to unethical decisions because we may fail to consider a stakeholder such as the environment. Third, the proximity of stakeholders, or the degree to which they demand attention, may cause the decision maker to ignore (or forget) them. Fourth, there is a thin line between seeking the greatest good for the greatest number and seeking the greatest good for yourself . Self-interest can justify many deplorable actions because they maximize personal outcomes to the exclusion of all else. The last important issue stems from the fact that people are judged as ethical or unethical based on the actions they take, not by how they calculate the utility of the outcomes. We must have a means of considering the action apart from the outcomes. That leads into our third approach, deontology.
Deontology means duty—one’s duty to act. According to Immanuel Kant, the 18th-century German philosopher, deontology focuses on the precepts that should determine action. This approach is pursued without concern for the outcomes of actions, but according to whether the action is something that an ethical person would do. Actions, then, are undertaken because they are right in themselves, whether or not the outcomes benefit or harm the person taking the actions. People therefore should act in ways that one would hope become the universal laws of society. In situations where one’s duty to society conflicts with one’s self-interest, one must act in accordance with the duty to society regardless of the consequences. For example, if lying is not what you would want to have as a universal law in society, then you should never lie, even if lying would benefit you personally or benefit your stakeholders.
There are difficulties with blind adherence to a deontological viewpoint. First, it is difficult for a person to take actions that violate self-interest—even when the person taking the action is not an egoist and is trying to truly do the greatest good for the greatest number. Second, unlike the virtue approach, the court of public opinion is not considered; one takes the action based on principle, not according to what others think. Third, deontology does not deal well with conflicts between actions that are each considered ethical. For example, consider the quandary of an entrepreneur caught between the desire to be with her ailing parents and the desire to go to Africa and build a venture that could bring potable water to thousands of villages.