In business ethics, the consequentialist ethical theory is applied in making decisions based on their consequences or outcomes. However, consequences are relative, and their importance or value is based on the conditions specific to each event. This limitation presents the two sides of the consequentialist ethical theory: utilitarianism and hedonism. The utilitarian approach to ethics is built on the modern liberal economic view that measures the utilitarian ethical model and evaluates ethics in business strategy based on its degree of maximizing the outcome. Therefore, analyzing the company’s success involves comparing its goals with their respective outcomes to determine their fit to proposed and implemented initiatives. In contrast, a hedonist approach focuses on minimizing the pain points, meaning the best business decisions are those that minimize loss or other negative impacts.
However, this model’s effectiveness is undermined by the inadequacy to accurately determine the outcome of a business decision before its implementation. The current business environment is characterized by heightened volatility, uncertainty, complexity, and ambiguity in what is commonly abbreviated as the VUCA environment. These VUCA dynamics create a volatile environment that increases risk in decision-making. Besides, the hedonism concept provides opportunities for developing objectionable resolutions despite their validity and appropriateness to a specific situation. Therefore, business managers must be cautious when applying the consequentialist ethical model in business decision-making, particularly in decisions that involve international business management due to the dynamics in cross-cultural management. The common saying the end justifies the means is best suited to explain this model. However, ends mean different things to different people.
Given these insights on consequentialist ethical theory, businesses should make decisions using this ethical approach whenever a conflict of interest arises, and stakeholders present varying views. Stakeholder management is a multi-faceted problem due to stakeholders’ diverse power and interest, meaning it encompasses financial, business, and organizational performance. Based on this knowledge, businesses are best suited to use a consequentialist approach to environmental, social, and corporate governance (ESG) issues. Experts argue that consequential ethics should be a key driver in making business decisions to prevent harmful effects on the business, stakeholders, and the surrounding community (Ohio State University, 2021). This presents us with the trade-off between stakeholder and shareholder theories. In addition, many business ethics have been sidelined due to the common phrase, ‘the ends justify the means.’ However, a time has come when this misleading profit-oriented business mentality should change because ethics must prevail in a company.
The consequentialist ethical model is suited for environmental issues due to the relative certainty involved in measuring the negative environmental externalities associated with the business activity. A business can start a plant or mining activity in an area, yet this operation’s consequences would harm the local community. If such a situation arises, it would be fitting to bar the concerned business from making this harmful decision, despite the highly projected revenues, as argued (Ohio State University, 2021). A classic example is Coca-Cola in South India. If the company had applied this model, the research could have informed the magnitude of its operations in the water-stressed region. Despite the company’s milestones in water stewardship, Coca-Cola continued facing significant criticism leading to the closure of one of its plats in Rajasthan, India (McKinsey & Company, 2019).
Closely linked to environmental issues are social issues. The company should evaluate the social consequences to determine the ethical issue in its decision-making criteria. When evaluating decisions, a business can use this model to determine the impact of poverty, unemployment, unequal opportunity, racism, and malnutrition, to make decisions that maximize positive outcomes that counter these social problems. Other critical decisions that can be made using this model involve governance issues such as risk management, board compensation, removal, and independence of directors. Most of these decisions have outcomes that can be measured before decision implementation. For example, business managers face significant legal and political risks during internationalization. A classic example is Uber, whose tech-based business model allowed it to bypass some of the regulations that other conventional businesses face. Despite the advantage, Uber faced a massive backlash from traditional taxi drivers in major cities leading to protests and temporary business closure.
At this point, it would be correct to say that a business should use consequential ethics. Further, some advertisements have been branded as deceptive, causing a stalemate in decision-making. As such, a business should use consequentialist ethics to compare benefits from the short-term goal (profit) and this decision’s long-term effects on the company’s reputation. Notably, using this approach will help the business shun unnecessary setbacks to the anticipated prosperity, as observed by its principles.
Work ethics is one of the binding principles/policies manifest in the workers’ social wellbeing. This point refers to the ideology of willingness to work without being coerced or forced by the employer. However, if this condition is absent at a workplace or organization, some employees are permitted to refuse to work. According to this school of thought, a business should be ready to avail a working environment free of harassment, discrimination, or injuries. If certain workers are convinced beyond any reasonable doubt that the condition has not been met, they are permitted to refuse the assigned duties (Compliance Group, 2020). Moreover, workers are human beings with dignity, emotions, and principles, meaning they cannot be forced to work against their will.
One of the theories that provide a detailed framework to help managers resolve challenges associated with employee motivation and job satisfaction is Herzberg’s two-factor theory, which can explore this ethical issue. Based on this model, there are two categories of employee motivation factors: hygiene and motivation factors. Hygiene factors refer to the basic things an employer should provide to ensure successful workflow (extrinsic). These include supervision, relationships, company policies, salaries, and job security, among others. In contrast, motivational factors are intrinsic and include promotion, recognition, and growth. Employees may fail to get the motivational factors but require hygiene factors to perform. A firm that does not provide motivational and hygiene factors fails to motivate and support its workflow, making employee turnover imminent. Based on the insights of the two-factor concept, it is the responsibility of the employer to create an environment that supports employees in performing their assigned tasks. Besides these primary conditions, they should provide motivational factors to maximize performance. This provides an opportunity to eliminate employee turnover.
From an economist’s perspective, the forces of demand and supply in the labor market influence factors such as wages. The classical economic theories explained the nature of the relationship between employers and employees based on resource accumulation. Business owners control the capital resources, and it is their right to minimize their risks and maximize rewards. However, this utilitarian approach results in inadequacy to respond to emerging sustainability issues in the workplace, particularly employee management. The emerging group of employees, mainly Gen Z, is overly conscious of how well companies are implementing sustainable innovation more than their boomer parents. Therefore, the emerging trend makes it more likely that companies without a comprehensive employee management strategy will experience a significant turnover rate. Besides, employee turnover has a significant financial impact on employers.
Sometimes, sexual harassment cases could be beyond the average levels which other companies can record. In these cases, the victims should decline to work in this environment, mainly when the company does not show any signs of solving the issue. From the ethical view approach, it would be appropriate to agree that these workers have permission to refuse work and are protected, considering experts’ views (Hentze and Tyus, 2021). Over the news and from other reliable sources of information, you are likely to view similar cases. Hence, it is ethically right to argue that workers under this condition should decline to attend to their duties. Again, performing extra duties should accompany compensation, meaning a contrary practice will be unethical (Hentze and Tyus, 2021). Based on this factual argument, the affected workers can refuse to execute such duties.
Based on the above analysis, employees are free to leave a hostile work environment. Regardless of the difficulty in determining hostility, since there is no specific framework for measuring it, it is possible to mitigate such outcomes by improving transparency in the workplace. Employers and employees should be clear on their expectations of each other. This presents the need for documentation. It is advisable that employees avoid using at-will as the reason for terminating employment. Employees must maintain this discipline up to termination to avoid misconduct such as job abandonment, which gives employers the right to separate employees from the company.
Therefore, at-will employees are not legally obligated to provide employers with advanced notice or cause when they quit. However, it is good form to provide employers with a dated, written resignation that includes the reason for the resignation. This will inform their future actions and help mitigate considerable financial losses.
According to sustainable business strategy, corporates and businesses alike have the responsibility to care for the society at large that exists around it. This is part of the mandated corporate social responsibilities of businesses. CSR is divided into four main categories; Ethical responsibility, environmental responsibility, economic responsibility, and philanthropic responsibility. One of the main problems arising in society today is the issue of climate change. Companies have a direct impact on this in several ways. For example, some manufacturing companies that turn raw materials into finished goods, such as the clothing industry that uses strong chemicals, are responsible for dumping waste products in waterways, leading to pollution and killing animals that use these water bodies for survival. Other companies, such as mining companies, are responsible for environmental degradation when they leave the land fallow and cut down trees in order to access the minerals. Some businesses cause noise pollution during their daily operations, which is a problem for society.
This has led to adverse climate change globally, with its effects expected to increase if they are not mitigated. The society has severely felt such impact in also different ways such as people developing medical problems due to poor waste disposal systems by the companies in trying to cut costs of manufacture and therefore increase their profits.
Companies and businesses that have chosen to establish themselves as environmental stewards in corporate social responsibility can focus on various fields to help in the reduction of climate change that will affect everyone in society. However, the main source of climate change is the emissions of greenhouse gases by manufacturing companies that have damaged the ozone layer, which is a vital component of the earth’s atmosphere since it prevents ultraviolet rays from penetrating into the earth’s atmosphere. The courses of action companies in third world countries are obligated to in terms of environmental responsibilities include; energy use, water use, waste management, recycling, emissions, and eco-friendly offices and business travel policies. The first significant obligation for businesses is the reduction of pollution. Industries contribute to pollution in different ways, such as; burning coal and fossil fuels, using chemical solvents, the release of untreated gases or liquid waste into the environment, using single-plastic use, and the disposal of radioactive materials. Therefore, they are required to find ways to reduce the level of pollution that they contribute to the environment through liquids or gases through the proper treatment of the waste materials and their safe disposal.
Secondly, businesses are mandated to conserve the resources they use in their daily operations. Such resources include water consumption, the use and reliance on recycled or partially recycled materials, and general waste. They are also required to increase their usage of renewable energy sources such as solar and wind. This leads to a reduction in the wastage of resources, which in turn leads to a sustainable future for the society surrounding the company, which benefits them and the future population at large. Companies are also mandated to offset the effects of climate change in various ways. Such ways include the planting and irrigation of trees in areas where the land is bare and dry, land reclamation from swampy areas or near water bodies, and funding the research of different companies that are conducting studies on the impact of industries on the environment, and donations to special causes that focus on climate change.
Other ways that the companies are required to use to mitigate climate change include the creation of materials that can be recycled and encouraging their proper disposal to the market, the reduction of packaging of the materials, which makes them less bulky and therefore have a lesser impact on the society, the use of an efficient, and fuel-saving, distribution network for the finished products. This is a form of waste management that benefits all members of society. Another way of dealing with the climate change problem is through the optimization of their products’ life cycle. This means of CSR makes them last longer for the end user and reduces their impact on the environment. Finally, the industries can also source both their raw materials and the fuel needed for either the manufacturing or distribution locally with suppliers and distributors who are environmentally conscious, which also reduces the net cost needed and also pumps back resources into the local society for the benefit of everyone. Such measures can also lead to an increase in revenue since people like to associate themselves with responsible companies that take care of the environment.
Compliance Group. (2020). Can Employees Refuse to Work Under Certain Conditions? https://compliancy-group.com/can-employees-refuse-to-work-under-certain-conditions/
Hentze, I., & Tyus, R. (2021). Discrimination and Harassment in the Workplace.https://www.ncsl.org/research/labor-and-employment/employment-discrimination.aspx
McKinsey and Company (2019). Large Water Users. [online] https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/sustainability/pdfs/report_large_water_users.aspx#:~:text=McKinsey%20analysis%20shows%20that%20by,and%20everrising%20demands%20for%20energy.
Ohio State University. (2021). 3 Ethical Decision-Making Frameworks. https://onlinemasters.ohio.edu/blog/3-frameworks-for-ethical-decision-making/
Wei, T., Yang, S., Moore, J., & Dong, J. (2012). Developed and developing world responsibilities for historical climate change and CO2 mitigation. PNAS, 109 (32) 12911-12915. https://www.pnas.org/doi/10.1073/pnas.1203282109