A Framework for Thinking Ethically

As the economic and society develops, social responsibility has become of increasing concern to the business world. This has resulted in growing interaction between governments, businesses and society as a whole. In the past, businesses primarily concerned themselves with the economic results of their decisions. Today, however, a ethnic business is no longer defined by how much money they contributes to charity, but by its overall involvement in activities that improve the quality of people’s lives. To achieve that the CEOs should start with making more ethical decision about their business.

One may ask what should be defined as ethical. First of all, ethics are not based on feelings, religion, law, accepted social practice, or science. According to the article “A Framework for Thinking Ethically”, there are three main sources of ethical standards we should use. The first standard is a utilitarian approach. It points out that the ethical action is the one that provides the most good or does the least harm. In other word, an ethical decision should produce the greatest balance of good over harm. The other approach is about rights, which suggest that the ethical action is the one that best protects and respects the moral rights of those affected. This approach starts from the belief that humans have a dignity based on their humanity or on their ability to choose freely what they do with their lives. The last standard is about Virtue. Ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues are dispositions and habits that enable us to act according to the highest potential of our character and on behalf of values like truth and beauty. Honesty, courage, tolerance, integrity, fairness, and self-control are all examples of virtues. These three standers shaped out a basic idea to determine right and wrong.

However, apply the ethical standards into business practice is tricky. A considerable profit may motivate the CEOs to violate the their moral standing in order to be more success in business. A great example is animal testing. Most of the daily supplies started by testing on animals to cut the cost and boost the profit. Corporations use animal to test their products to see if there is any negative effects before selling them in the market. As the seventeenth century philosopher Immanuel Kant wrote that "So far as animals are concerned, we have no direct moral duties; animals are not self-conscious and are there merely as a means to an end. That end is man." Simply to understand the thought of Immanuel, animals’ suffering should be and only be concerned when they are useful to humans.

Such example like animal testing is very common among business. What happens when business operates unethically? The consequences could be poor company reputation, environment pollution and so on. However, financial crisis is by far the most serious damage that unethically business practices have made. As the video “inside job” mentioned, the biggest cause of financial crisis are the banks made reckless bets. The banks make more money if they lent more loans. Therefore, the banks just giving out more loans whether the customers can pay them off or not. Banks also packaged mortgages into securities that sliced and diced all types of mortgages and sold them to clients around the world as “AAA” rated. The credit rating agencies lead the States into a huge bubble by providing AAA standard mortgages, which they did because banks paid them to. Millions of families are harmed by the financial crisis during 2008. From the utilitarian approach mentioned above, the banks and FDIC failed to promote the best for their customers and caused the biggest crisis since the depression.  

Fortunately, we are healing from the crisis. What is important now is how to prevent it from happening again. First of all, the government should take actions to help business operate ethically. The reason why banks were able to make reckless loans and bundle mortgages is that the government deregulated the financial markets. Without the proper regulations, the banks can easily take advantage. Just like a well streeter in the documentary “the inside job” mentioned: “it is really hard to resist when you can make a lot of money out of nothing. Therefore, the government should formulate specific regulation to keeps bank’s behavior under control. The other way to keep unethical business practice to a minimum is the supervision of the public. To use the animal-testing example again, the Animal-right movement put a lot of pressure on the companies. The animal-right movement receives a great result, shampoos and medicines businesses today label their product as non-animal tested in order to gain more popularity of customers. The social pressure could helps business to act more ethical.