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ETHICAL PRINCIPLES IN BUSINESS

EDWIN PATRIASANI

There are four basic kinds of moral standards, which are engaged on moral decisionmaking in doing business. They are utilitarianism, right, justice, and caring.
First of all, utilitarianism is a general term for the view that actions and policies
should be evaluated on the basis of the benefits and costs they produce for everyone in
society. Moreover, utilitarianism holds the morally right course of action in any situation is
the one that will produce the greatest balance between benefits and cost for everyone
affected. The term of utilitarianism is applied for any theory which encourages selection of
that action or policy that can enlarge utility. In a previous period, there was a traditional
utilitarianism that is founded by Jeremy Bentham and John Stuart Mill. They believed that
the most promising way to attain such an objective basis of moral and social decision-making
was by looking at the various policies or courses of action that could be picked out and
compared from their valuable and damaging consequences.
There are three important mistakes when using utilitarianism. Firstly, utilitarianism
does not mean that the right action is the one that produces the most utility for the person
performing the action, but an action that produces the most utility for all persons affected by
the action including the person who performed the action. Secondly, the utilitarian principle
requires us to consider only the direct and immediate consequences of our actions. On the
other hand, the most significant misunderstanding is the utilitarian principle doesnt not say
that an action is right so long as its own benefits outweigh its own cost.
Utilitarianism is also the basis of the techniques of economic cost-benefit analysis that
refers to a type of analysis used to determine the desirability of investing in a project by
calculating whether its present and future economic benefits outweigh its present and future
economic cost. In addition, we can note that utilitarianism fits with a value that many people
prize, which is efficiency that means operating in such way that one produces a desired
output with the lowest resources input.
The concept of a right shows a crucial role in many of the moral arguments and moral
claims that are raised in controversies involving business ethics. In general, a right is an
individuals entitlement to something. A right could be separated into legal right and moral or
human right. Legal right is an entitlement that receives from a legal system the permits or
empowers a person to act in a specified way or that requires others to act in certain ways
toward that person. On the other hand, moral right means a right that all human beings
everywhere posses to an equal extent simply by virtue of being human beings.
Furthermore, there are contractual right and duties that refer to the limited rights and
correlative duties that arise when one person enters an agreement with another person.
Contractual rights and duties also provide a basis for the special duties or obligations that
people obtain while they accept a position role within lawful social institution or
organization.
Disputes among individual in business often refer to justice or fairness. It could be
divided into three kind of justice. Firstly, distributive justice that refers to the justice which
requires distributing societys benefits and burden fairly. The basic principle of distributive
justice is the purely logical idea that we must be consistent in the way we treat similar
situation. Similarly, there are several principles that are often thought to be more fundamental
principle of distributive justice which are justice as equality (egalitarianism), justice based on
contribution (capitalist justice), justice based on needs and abilities (socialism), justice as
freedom (libertarianism), and justice as fairness.
Secondly, retributive justice that concerns the justice of blaming or punishing persons
for doing wrong. Punishment is proportioned to the wrong when the penalty is no greater in
magnitude than the harm that the offender inflicted. Finally, compensatory justice that
involves the justice of restoring to a person what the person lost when someone wronged him
or her. Traditional moralist have argued that there three condition that a person has moral
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ETHICAL PRINCIPLES IN BUSINESS

EDWIN PATRIASANI

obligation to recompense an injured party. The first one is the action that inflicted the injury
was wrong or negligent. The second one is the persons action was the real cause of the
injury. The last one is the person inflicted the injury voluntary.
Ethic of care is an ethic that requires caring for the concrete well-being of those
particular persons with whom we have valuable and close relationship. An ethics of care
accentuates two moral demands. The first one is we should preserve and look after those
concrete and valuable relationship that we have with specific persons. The second one is we
should exercise special care for responding positively to the particular needs, values, desire
from those whom we are concretely related. As a result, an ethic of care can be seen as
encompassing the kinds of obligations that is called communitarian ethics which refers to an
ethics that sees concrete communities and communal relationship as having a fundamental
value that should be preserved and maintained.
In this chapter, we will found a case study about Unocal (Union Oil Company of
California) in Burma. This case reveals about the exploration of natural gas field which is
called Yadana Field that belonged to Burma, Myanmar. This exploration generates several
problems in social aspects and business ethic principles that are from utilitarian, right, justice,
and caring perspective.
In my opinion, Unocal doesnt need to invest the pipeline to Total company that
would build a pipeline to transport the natural gas in which the government of Thailand
would buy it. The reason is when Unocal decides to invest and build the pipeline, the several
problems will occur. Firstly, the pipeline would cross over through the region inhabited by the
ancient people in Burma. It would damage their quality of life and destroy their place for
living.
Secondly, constructing the pipeline would need more labor from the people
surrounding the project. Moreover, Unocal works in partnership with the government of
Burma that was a military dictatorship accused of continually violating the human rights of
the Burmese people. It would be the major problem for human rights as the Burmese army
was using forced labor and assaulting the ancient people to build roads, building and other
infrastructure for assisting the distribution of gas by pipeline. As a result, despite the
generating of pipeline have obtained more benefit for increasing the people in the region
around by providing job, the human right and justice of them have been vanished.
I would like to suggest Unocal for constructing new installation that is built close with
the drilling of natural gas to process it first before they sell to another country. The system
would require higher cost than generating pipeline, but the ethics problem would be reduced
sharply. Additionally, Unocal have to alter its view that engagement is the proper course to
achieve social and political change in developing countries with repressive governments. In
my view, it depends on the circumstances. If the government supports the construction
wisely, they would not abuse their minority people become the suffering labor. In this case,
Unocal need to deliberate gravely with the Burmese army about how to treat the labor as
human being.