Business ethics theories include the moral principles or codes a company implements to ensure that all individuals working in the company act with acceptable behavior. Business owners and managers can use an ethics theory they deem most appropriate for use in their operations. A few different business ethics theories exist, such as the utilitarian, rights, justice, common good and virtue approach. These theories can be used on their own or in combination with each other. Each theory includes specific traits or characteristics that focus on specific ethical principles that can help companies correct business issues.
The utilitarian approach focuses on using ethical actions that will promote the most good or value among a society while limiting the amount of harm to as few people as possible. Among the business ethics theories, this is typically seen as the oldest theory, as it was propagated by many philosophers, such as Jeremy Bentham, James Mill, and Mill's son John Stuart Mill. Businesses can use this theory to ensure the outcome of various situations helps the maximum amount of stakeholders.
A rights ethical approach is based on the belief that all individuals have rights in life and should be treated with respect and dignity. Morals play a large role in this because individuals must personally use ethical behavior in order to achieve the end goal without mistreating people. Business ethics theories often use this approach by not imposing their missions, products, or systems on consumers.
Justice as an ethical approach is where all humans are treated equally through society, regardless of rank, position, class, creed, or race. This is also known as the fairness approach in business ethics theories. If people are not treated fairly — such as one employee receiving higher compensation than another — a justifiable reason must exist, such as higher technical skills or the exclusiveness of a job position.
The common good approach attempts to promote the common values and moral or ethical principles found in a society. This varies from place to place, based on countries' specific cultural or societal beliefs. For example, the moral principles found in Japan will often be different than those in the United States. Business owners and managers often implement these principles to ensure their company’s overall mission is in sync with society as a whole.
The virtue approach is a bit more difficult for businesses to implement, as its approach focuses on following ethical principles that should be evident in society. These principles or virtues seek to replace the current values if they do not bring about the most good or best development of humanity. Businesses can implement this approach, although it may run against the grain of society until the values take hold among the general public.