Essay about Ethical Theories in Finance

916 Words Aug 28th, 2011 4 Pages
Ethical Theories
Sheri Wernert
BUS 670: Legal Environment
Professor Gentry
December 19, 2010 Ethical Theories In every day life a person is bound to have ethical issues that must be decided. This is also true for the business world. With cases evolving each day of unethical companies such as Enron ethics is now being viewed as an important part of training for many companies. Which ethical theory to follow depends on the individual and there are many theories to be considered. How does a person tell what theory they believe they follow? Knowing the different theories and how they are viewed are key. Ethical theories are either teleological or deontological which can then be broken down further. Deontological
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The most common foundation is the Principle of greatest equal liberty, which expresses each person, has an equal right to basic rights and liberties. This theory has the basic premise to protect those who are least advantaged in society (Mallor, Barnes, Bowers & Langvardt, 2010). However, when dealing with this theory an individual or company should realize that any attempt to rearrange social benefits requires an accurate measurement of current wealth. When dealing with the Utilitarian ethical theory the decision maker to maximize utility for society as a whole. By doing this a person will consider the benefits and costs of his or her actions to everyone in society (Mallor, Barnes, Bowers & Langvardt, 2010). An example of this would be when a person goes to vote on an issue. The voter will first weigh his decision on the benefits to him and then how will this affect the society as a whole. When considering the Utilitarian theory a person should be aware that there are actually two types act utilitarianism and rule utilitarianism. Act utilitarianism judges each act separately, assessing a single act’s benefits and costs to society’s members. While, rule utilitarianism judges actions by a rule that over the long run maximizes benefits over costs. The profit maximization theory is considered more in the business world than for individuals and takes into account other theories. This theory requires the

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