Utilitarian Views on Business Ethics The utilitarian theory

Utilitarian Views on Business Ethics The utilitarian theory is founded on the ability to predict the consequences of an action.

• To a utilitarian, the choice that yields the greatest benefit of the most people is the choice that is ethically correct. • According to Jeremy Bentham & John Stuart Mill : A decision is ethical if it provides a greater net utility than any other alternative decision. “the seeking of pleasure and avoidance of pain, i. e. , happiness is the only right and unversally desirable end of human action”.

• The utilitarian principle assumes that we can some how measure and add the quantities of benefits generated by an action and deduct from it the measured quantities of harm that act produced, and determine thereby which action produces the greatest total benefits of the lowest total costs. • The following are the basic meaning of utilitarianism: 1. Greatest good of the greatest number. 2. Maximization of pleasure. 3. Minimization of pains. 4. Maximization of happiness. 5. Satisfaction of desire. The theory of utilitarianism is sometimes interpreted in terms of cost and benefit analysis (CBA). Types of utilitarianism: 1. Act utilitarianism 2. Rule utilitarianism

Utilitarianism criticized because it faces following problem: • • Measurement of utility. Intractability of measurement. Lack of predictability. Lack of clarity.