IN BUSINESS DECISION- ARNG : “Those ethical choices often are made every day at a time, minute by minute in ways that you may not even relate to ethics, so I’m going to walk them through the whole story from that perspective and hopefully they'll be able to walk away with something good from it. ” — Jayson Blair The learners shall be able to: . Explain the three types of normative ethical theories; . Discuss Kohlberg’s on on the six stages of moral reasoning; Elaborate the rules suggested by Machiavelli which could guide a leader; Interpret the utilitarian principle of Bentham; . Evaluate the different categorical imperatives of Kant; . Support the two important principles about justice of Rawls; Appraise the legal positivism of Hobbes; Assess the divine command theory; and Defend the ethical egoism of Rand. Certainly, business leaders make decisions that must be ethically significant everyday. Practical speaking, ethics works its way into business through considering moral principles in formulating decisions and putting said decision into actions. The study of ethical action is known as normative ethics. Basically, normative ethics focuses on a general theory that tells how people ought to act. It tries to study standards of determining the rightness and wrongness of actions. Here is the discussion of normative ethics and several theories under this principle. Scanned with CamScannerTHE NATURE OF NORMATIVE ETHICS As stated normative ethics is the attempt to provide a general theory that would guide people how they ought to live and act. For any human action, it is morally interesting to identify three elements that actually correspond to the three types of normative theory, Every human action involves an agent who performs, some action, that has particular consequences. These three types of normative ethical theories are virtue, deontological, and consequentialist, each stressing one of these elements. Virtue theory obtains judgments of agents or persons as most essential. On the other hand, deontological theory takes judgments of actions as most vital. It is consequentialist theory that obtains judgments of the possible consequences of an action as more indispensable. Virtue Ethics This virtue theory focuses on the moral character of the agent as depicting an ideal of human character. Meaning it is person-based- based that looks at the virtue or moral character of the person carrying out an action. According to virtue theory, individuals should have certain character traits such as courage, generosity, compassion and other good characters that must be evident in their actions. People thus need to act in manners that show the virtues, although it might be misperceived as bad or lead to detrimental results. Virtue ethics gives guidance as to the kind of characteristics and behaviors a good person will try to attain. In that manner, virtue ethics is concern with the totality of an individual's life, before some specific events or actions. This theory also suggests that the approach to make a good society is to assist its members to be good people, instead of the use laws and punishments to stop or discourage bad actions. Among the principles that virtue ethics teaches are: 1. If an action is being done by a virtuous person in the same situations, then it is right; 2. A person who takes action virtuously is a virtuous person; Scanned with CamScannerCorporate Sacial Responsibility and Good Governance in the Millennial Age + Serrano 3. Only when a person possess and live the virtues that he acts virtuously; and 4. Avirtue is a moral attribute that a person requires to live soundly. Deontology Deontological theory on the other hand centers on the act being done. Based on this theory, there are specific types of acts that are intrinsically good or bad or good or bad by nature. These particular acts should or should not be done without any regard to the consequences. Thus, the basic ethical task for persons is one of doing the right thing or more commonly avoiding doing the wrong thing using a set of moral principles or moral rules. Deontological theory emphasizes the centrality of rules. The character most essential in a deontological view is conscientiousness. It is conscientiousness that makes a person abide with rules carefully despite several temptations not to follow in some cases. Conscientiousness in itself is not significant but it is needed to make certain that people follow rules and thus do things right. Basically, the Ten Commandments although in religious context provide a model of a set of rules of conduct that need to be followed. The most philosophical effort to preserve this view was predicted in olden moral philosophy by the Stoics. Later, it was developed in its most convincing structure by Immanuel Kant, a modern German philosopher. Moral rules for the Stoics are words among human creatures on the laws of nature which are required to be followed in order to act corresponding to natural forces. As human beings, people have both freedom and reason. Being free, sometimes humans may act against nature. However, having reason, people can understand natural laws and decide to act in line with such forces. Kant’s and Stoic view have almost the same view on the idea of freedom and reason, only Kant’s is much deeper. According to Kant, the only means to find out the right set of moral rules is by following the dictates of reason which can make one to be truly free. Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial Age * Serrano Consequentialism Consequentialism is the other approach to normative ethics. Consequentialism is an ethical theory that evaluates whether or not something is right by what its consequences are. For instance, most people would agree that lying is wrong. But if telling a lie may help protect a person’s life, consequentialism says it is the right and best thing to do. Utilitarianism and hedonism are the two examples of consequentialism. Utilitarianism holds that people have to act always in the manner that produces the greatest consequences. It does not concern on what those acts are for as long as the end justifies the means. All that is important for ethics is building the world a better place to live in. Hedonism, on the other hand, is a philosophy of pleasure that says something is “good” if the consequence produces pleasure or avoids pain. It means doing whatever brings the greatest amount of pleasure, regardless of any other effects. There are two types of consequentialist theories which are act consequentialism and rule consequentialism. Act consequentialism needs agents to carry out the particular action that in a particular situation is most possible to maximize good consequences. Rule consequentialism in contrast, obliges agents to pursue those moral rules the performance of which will maximize good outcomes. In consequentialism, the goodness of a thing depends on whether it is instrumental or intrinsic. Instrumental goodness brings about intrinsically good things. Money is a great example of this. Money buys people things they like and is good because it gets them what they want. Intrinsic good is something valuable because it is good-in-itself. Honesty, for instance may be considered as instrumentally good by such a theory given that honesty is possible to add to maximizing human happiness. However, intrinsically honesty is good in itself. Scanned with CamScannerKOHLBERG'’S STAGES OF MORAL DEVELOPMENT A psychologist by the name of Lawrence Kohlberg modified and expanded the previous work of Jean Piaget to form a theory that provided details on how children develop moral reasoning. Kohlberg believed that moral development follows a sequence of stages. The “Heinz” dilemma which he created that discusses the idea of obeying the law versus saving a life is one of the best acknowledged moral predicaments. According to Kohlberg, the manner a person reason out about a dilemma determines his positive moral development. The Heinz Dilemma: Kohlberg’s Approach to the Study of Moral Reasoning Kohlberg based his theory on a series of moral dilemmas were presented to these participants and they were also interviewed to determine the reasoning behind their judgments of each scenario. One example was “Heinz Steals the Drug.” In this scenario, a woman has cancer and her doctors believe only one drug might save her. This drug had been discovered by a local pharmacist -and he was able to make it for $200 per dose and sell it for $2,000 per dose. The woman's husband, Heinz, could only raise $1,000 to buy the drug. He tried to negotiate with the pharmacist for a lower price or to be extended credit to pay for it over time. But the pharmacist refused to sell it for any less or to accept partial payments, Rebuffed, Heinz instead broke into the pharmacy and stole the drug to save his wife. Kohlberg asked, “Should the husband have done that?" Kohlberg was not interested so much in the answer to questioning whether Heinz was wrong or right but in the reasoning for each participant's decision. The responses were then classified into various stages of reasoning in his theory of moral development. psillwww.verywellmind.com/kohibergs-theory-of-moral- developmet-2795071 Scanned with CamScannerCorporate Sociat Responsibility and Good Governance in the Millennial Age + Serrano As said by Kohlberg, an individual progresses from the capacity for pre-conventional morality (before age 9) to the capacity for conventional morality (early adolescence), and toward attaining post-conventional morality, which only a few completely reach. Every level of morality includes two stages, which offer the source for moral development in various frameworks. In Kohlberg’s viewpoint there are six stages that an individual may go through in achieving the highest level of moral reasoning. Business owners and managers may gain a lot from Kohlberg’s theory through knowing how key stakeholders within the organization and its leadership interact at various stages of growth. Having knowledge of these stages can help’businesses in formulating meaningful human resources policies and beneficial incentive systems. In addition, owners and managers may be able to appreciate younger employees’ behavior and way of decision-making. Level 1-Preconventional Morality The preconventional level of moral development addresses the initial reactions that children are likely to have to their surroundings and relationships. At this stage of the earliest stage of moral development, children see rules as fixed and absolute according to Kohlberg. Abiding by the rules is critical as a means to avoid punishment. Obedience and punishment is particularly recurrent among young children. In addition, a child’s sense of morality is externally controlled. Parents and teachers are those external authority figures who provide the rules that children accept and believe in. When applied to business, the preconventional level explains the reactions of many employees when they initially join an organization. There is often uneasiness about satisfying the boss and a desire to perform work industriously and without much upset. Stage 1: Simple Obedience Orientation This Stage 1 focuses on the child's desire to comply with tules and keep away from being punished. For example, an action is perceived as morally wrong because the performer is punished; the worse the punishment for the act is; the more “bad” the act is perceived to be. 36 Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial Age » Serrano This stage is most common in children below 10 years old. A child will almost always suspend judgment to someone with unquestionable authority and does not have many desires of his own. Some adults in the workplace still exhibit this form of moral orientation. Some employees may perform best within an authoritarian structure. Fear of consequences is the ones that motivate them more and not their ambition or pride in success. This can be particularly right of younger employees, who see their current * jobs as merely short-term income opportunities. Stage 2: Conformity to Group Behavior Orientation In Stage 2 the definition of “right behavior” is any action that an individual performs for his own best interest. Although, a person’s reasoning in this stage reveals a very limited interest in the needs of other people, only to that extent where there would be added benefits on his own interests. Loyalty and respect are not yet given emphasis but more on the mentality of reciprocity. For instance, when parents request their child to do household chores with additional allowance as an incentive. It is in this stage when a child begins paying attention to his own needs. The actions of a child are mostly motivated by a desire to make happy those people in authority so that in return they too will show love and affection. In this second stage, the idea of right and wrong and the morality of a particular action rely on the viewpoint and the needs of the person doing the action. Employees in this stage go up against the needs of their employers when making decisions. Founded on their personal needs, they try to rationalize their actions. For managers, itis critical to let employees see that the compensation packages and working conditions created for and given to them are just and fair. Level 2-Conventional Morality Kohlberg says that as a person mature morally, he goes into the conventional stages of good interpersonal relationships and a sense of maintaining social order. This normally happens in the teenage years, when the person will begin to develop more strong 37 Scanned with CamScannerCorporate Social Responsibility and Good Governance inthe Millennial Age + Serrano relationships with others that go outside self-service. The teenager will want to accept the rules of authority figures not for reward, but because he sees it as a way to maintain order and secure justice. Obedience to rules and conventions is somewhat strict during these stages, and a rule's correctness or fairness is rarely questioned. In business, this conventional stage of morality is observed as employees become more relaxed working within the organization and with their co-workers and supervisors. While the employee will preferably still would like to be productive with his time, his focus begins to shift to the better good of the company, quite the reverse to entirely selfish motives. Stage 3: Good Boy, Nice Girl Orientation In stage 3, children want the approval of others and act in ways to prevent disapproval. The focus is on living up to social expectations and roles in order to maintain social order. In this stage, the underlying assumption is that “right” and “wrong” can be determined by an action’s contribution to or detraction from social harmony. Emphasis is placed on good behavior and people being “nice” to others. Employees in this stage can make decisions that echo with the values of their employer, but which are not automatically in the best interest of outside stakeholders. When managing people at this stage, managers must clearly express the significance of ethical interactions with customers, suppliers and other outsiders. Stage 4: Law-and-Order Orientation In stage 4, the child blindly accepts rules and convention because of their value in maintaining a functioning society. Rules are seen as being very similar for everyone. Obeying rules by doing what one is “supposed” to do is observed as worthy and significant. Moral reasoning in stage 4 is outside the need for individual approval. If one person disobeys a law, there is an obligation and a duty to uphold laws and rules. Most active members of society remain at stage 4, where morality is still mostly ordered by an outside force. BR Scanned with CamScannerCorporate Social Responsibility and Good Governance In the Millennial Age + Serrano Stage 4 establishes a minor evolution from stage three. People construe morality using similar social lens as stage three, except with a wider standpoint. In this stage, people are more concern with the norms and structures of society as a whole, instead of only their own family, friends and workplace. Level 3-Postconventional Morality Kohlberg’s post conventional morality is defined in terms of more abstract principles and values. It involves an acknowledgment of the social contract and of universal ethical principles. A social contract is the idea that people have to renounce certain rights in return for other rights or for protection. This is the recognition that freedom of speech has limitations, that certain laws are designed for the greater good and that ethical principles work in combination to make better the lives of society’s members. People nowadays consider ‘that some laws are unfair and should be altered or abolished. This level is distinct by a rising awareness that individuals are separate entities from society and that individuals may break the rules not in agreement with their own principles. Post-conventional moralists live by their individual ethical principles. These principles normally consist of basic human rights such as life, liberty, and justice. These moralists view rules as helpful but unstable mechanisms. Because post-conventional individuals make higher their own moral evaluation of a situation over social conventions, their behavior, especially at stage six, can sometimes be confused with that of those at the pre-conventional level. Some theorists have considered that numerous people may never attain this level of abstract moral reasoning. In the business setting, the post conventional stage is likely to be seen in employees who have been with the company foralong-time. These employees may have been promoted to management positions and are dedicated to secure a sense of rights and responsibilities among their subordinates. : Stage 5: Social-Contract Orientation In stage 5, the world is observed to be holding diverse opinions, rights, and values. Such viewpoint should be commonly 39 Scanned with CamScannerrespected as unique to each person or community. Instead of considering laws as strict, it is regarded as social contracts. In order to promote the greatest welfare for the greatest number of people, laws should be changed when necessary. This could be done using a majority decision which in theory is true in a democratic government structure. In this stage also, morality starts to be above the norms of the society, that often times would result to breaking such norms for the sake of safeguarding individual rights. Breaking of the rules is done without acting in direct disagreement to the fundamental structure of a social contract. In the workplace, employees may consider not following the tules as something moral provided that such act concerns unfairness of HR policies. For employers and managers, when their employees behave this way, they need to listen and attend to their needs. Stage 6; Universal-Ethical-Principal Orientation The basis of moral reasoning in stage 6 is the combined use of universal ethical principles and rules. Basically, these selected principles are not concrete but abstract such as equality, dignity, or respect. On the other hand, the legitimacy of any law comes from its impartiality, hence people usually commits not to follow laws that are unfair. Usually, people select those ethical principles they wish to follow and becomes guilty once they go against said principles. Their action to follow these principles is not to avoid punishment but because it is morally right to do so. Being morally right, principles would also mean they are legal, previously approved by everyone and for the best interest of a greater number of people. This final stage as said by Kohlberg is reached when people become skilled in seeing problems from the lenses of each person implicated therein. Itis when one’s ability to empathize and see issues from another's perspective, anchored by a sense of justice has reached its maturity. All of a sudden, morality becomes part of relationships, social norms and individual rights. There is more understanding of 40 Scanned with CamScannerthe result of actions as seen in the conclusions created and the dignity — and rights of all people are given value. THE MACHIAVELLIAN PRINCIPLES Niccold Machiavelli and his book “The Prince” had stimulated controversy and debate ever since it was written 500 years or half a millennium ago. In fact it was banned by the Catholic Church because of being a “handbook for tyrants”. It was recently in 2013 that Maurizio Viroli wrote and made published his review of the controversial book in his review copy entitled “Redeeming the Prince: The Meaning of Machiavelli’s Masterpiece”, which paved the way towards deeper understanding of the thoughts of Machiavelli. Virolli properly evaluated the old misunderstood book “The Prince” with his new interpretations of this masterpiece of the Italian Renaissance. In the business setting a true “Machiavellian” entrepreneur or executive is an innovator who could create new and better ways of producing and distributing products and services. In Machiavelli's perspective, this leader might be exempted, not justified in violating the principles of honesty only if it is absolutely necessary to realize a great act of innovation for the benefit a great number of human beings. This situation is similar the ideal prince whose highest value is the good of the people of his country. In reality, there are true leadership lessons that could be drawn and learned from “The Prince”. These lessons are far different from the unethical behavior that was attributed to it. Here are some of the rules suggested by Machiavelli which could guide a leader: Better to be feared than loved if one cannot be both The most popular and controversial question Niccold Machiavelli had challenged and had been inflaming intense disagreements among managers in the past and these days is “ Is it fear or love that could inspire subordinates and be useful to becoming a more effective leader”? at Scanned with CamScannera ee Ideally, the answer to this question is to combine fear and love. Love and fear are both powerful motivations. Love creates a bond of obligation whereas fear basically promotes submission. Love is unpredictable, but the fear of punishment is stable. A bit of kindness goes a short way, but a slight whip snapping goes a great deal further. Yet in reality, this is too hard to do both at the same time. Most leaders in reality wanted to always seek approval from their employees. For modern day business people, as employers they must not implant fear in the heart of their employees. According to Machiavelli, people admire good leaders, but they respect and obey strong ones. Machiavelli says that leaders have to employ strength and discipline to control subordinates, because being brave or good alone is not enough to protect their loyalty. However, leaders should not do anything against anyone. Leaders should not take their offices, their properties, their jobs and their honors. Always, leaders must put a bit of stick to inform everyone that he is the boss. Gradual reward and immediate punishment The use of “carrot and stick” technique needs to be done with carefulness when managing people. In reality, even for minor abuses, a person would normally avenge himself, However, with strong pressure against him by the leader, it would be impossible for that person to take revenge. Should the leader decide to implement the technique mentioned; there must be a very serious punishment, otherwise resistance would be possible. On the contrary, praise and reward must be done by the leader gradually for the appreciation of the subordinates, Hence, any positive incentive that would be given shall become effective because of its being valuable. When career promotion and awards take place in life rarely, they are much treasured by the recipient. On the other side, punishment must be completed instantaneously and toa greater degree. One-time punishment and short-lived strictness may appear to be unserious. Often, rew: y ‘ard and punishment lead to single result because reward slowly becomes uninteresting and punishment hurts. a2 Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial Age + Serrano The lion and the fox Just like any other human beings, a leader is not perfect and cannot have all the virtues in him. Essentially, though, it is the perception of his subordinates about him that matters. In order to be an effective and wise leader, he must hold the combined qualities of a lion and a fox. As a tough lion, he must be strong and honest to win respect. He is not afraid to use his force when the time calls for it. As a witty fox, a leader must be able to show high-quality “make-believe” and puzzlement so that he would be able to act with smartness, foresee and avoid of any traps set by opponents. He must know how to use diplomacy, negotiation and political planning. Hence, leaders must know their weak points though be cunning and pitiless when needed. Envy and drive By nature, people wanted to have more than what they have at present, although scared of-losing what they already own. Once they become dissatisfied, this feeling served as an incentive to propel them to change. Often, a person becomes jealous of those people who have more than what he possesses. Without these people around him knowing, he hates them and considers them enemies. This feeling of jealousy turns to be his encouragement to step forward and be better, making him an opponent of himself. In this situation, the evil turns to be good; however, the intention of good is evil. Being jealous of others especially in material things is not recommendable although a natural instinct of humans. A leader must not be jealous of others and just be confident of reaching his ambitions, and then everyone would treat him with appropriate respect. The end justifies the means Often Machiavelli is given the credit for a consequentialism quote that emphasized “a morally right act as one that creates a positive outcome”. Simply, sometimes, people ignore how the goal is attained which could be sometimes immoral. In reality, the thought of Machiavelli is quite different. According to him, subordinates are likely to judge their leaders by results without even attempting to Scanned with CamScannerknow the details of the actions they have done. Most of the times, people make judgment based on what appears to be seen without knowing who the leader really is and their actions. Additionally, only few would challenge to contradict the opinion of the majority, which often times is a very challenging act because the masses judge by the result. Cycle management forms The idea of Machiavelli that forms of management are developing like clockwork is also applicable in these modern days. The actions of people, companies and almost everything is just like a pendulum movement, which first go up but afterwards could be overtaken by decline. The leader must always bear in mind that at every instant almost everything in this world is in constant movement and circulation. This is true from the day-to-day affairs and problems, to material things and even the forms of management. The very nature of reality is such that things are constantly changing and could not stay at rest. Hence, when almost perfection is attained, there is no longer any way but to start anew in the reverse road. In the workplace, the leader certainly understands that he can institute a positive way of supervision only for a limited timeframe. However, later it would turn into something negative. In human actions, good deeds may turn into evils and evils could later become good deeds. Promote criticism and frankness Feedbacks are important sources of information coming from subordinates. Ignoring the importance of feedbacks coming from employees is a big miscalculation. Itis vital for managers to recognize their strengths and more importantly their weaknesses. According to Machiavelli, leaders must guard themselves from flatterer and this could be done if subordinates know that the truth would not upset them. Anyone who would like to be an expert in his field must be ready for a lot of criticisms and should take them to ones benefit. Much better to meet with employees once managers received upward feedback. Most likely these feedbacks would improve their working 44 Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial Age « Serrano style as managers. Always make a choice According to Machiavelli, the world in reality is cruel, because often in decision-making, the choice is just between two evils, rather than between two goods or between a good and an evil. In business, all entrepreneurs and managers need to decide for their respective companies. All options would always have disadvantages. Simply, there must caution when deciding in order to differentiate the problems that may arise for each option and be able to choose the “lesser evil’. Any director or manager of a company must always be prepared to deal with difficult problems and challenges in a direct way. Handling undesirable options is a learning experience and may improve those in the managerial level to be better decision-makers. Don't micromanage, but center on one goal Micromanaging is one of the most damaging habits an executive can have. It is the nuisance of many possible successful businesses. It is demoralizing and counter-intuitive. Controlling all things just to ensure everything goes to plan only generates more problems in the long run. For Machiavelli, business people should consider business as war. The management's full focus should be on the core goal. Hence, managers need to trust people below them to carry out their respective jobs. Simultaneously, managers need to concentrate well also on their jobs. Micromanaging employees do not just breed bitterness but makes them dependent on further micromanagement to do their jobs. Let passion be the basis of one’s business In the book The Prince, one of the most important ideas is about “where the willingness is great the difficulties cannot be great”. In the competitive world of business this is true ina lot of areas. The world in reality is full of things that are not to everyone's favorites. It is meaningful and fruitful to work on something that one’s heart Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Mittennial Age + Serrano love. Nothing is too big and nothing is too difficult, when a task to be done is to one’s liking, The enthusiasm will always be present, hence everything would be easy. Capture the zeitgeist A business enterprise should always stay strong and established despite fashion changes. Based from the words of Machiavelli “he who directs his actions according to the spirit of the times will become successful”. As a matter of fact, an industry leader must always know the business environment particularly those that are failing and those that are set to flourishing. A leader in his trade also needs to pay attention for the next area of important development especially that would affect his business very much. A good example here in the Philippines is making significant opportunities for retail products and services for both well-established domestic players and international brand names. The reason behind this trend is the combination of strong sustained growth, a young and increasingly affluent middle class, and high consumer confidence. Knowing this matter means retailers can take advantage of the trends of the time. © Make friends and avoid enemies The topic of making connections when in business was made very apparent by Machiavelli. Anyone in business should avoid creating enemies. Employees need to have good relationship with senior figures. Social media is nowadays an important tool for making connections. LinkedIn members also have confirmed that networking contributes a lot to business success. Creating connections and bond with people who can help boost ones business is a smart business move. The vast majority of new partnerships, capital infusion and merger candidates come from connections and referrals. Having a vast network only improves ones options and access. Be cautious of “yes” people According to Machiavelli, people who are always agreeable to anything and everything are not believable. Most of the times, _ “yes” people only think of their own interests and seeking silently 46 Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial Age » Serrano their own profits in everything. These people never disagree, play devil advocate or offer alternate points of view. He added that they would not and will never make good servants. Commonly, leader of a company to be successful needs to be challenged by his juniors and not by someone the leader has brought in to support of his saleable efforts. “ “Yes” people are more common where the chances are high and the opportunities abundant. Self-centered motives let these people to present fake reassurance, customarily in order to make the leader happy or appear like a supporter. Managers must not believe them when they tell him that he is right, because chances are that they have their own motives for doing so. They know that if a decision turns successful they will harvest the benefit of being the person who told their boss his being a “genius”. Moreover, if things go terribly erroneous they would not mind, since they had nothing to lose in the first place. Deal with business threats promptly It is significantly important. to remedy business threats immediately because they usually cause serious damages that can be expensive and time consuming to mend. Since business is war, it is best to foresee problems, deal with them at once which may even lead to avoiding war to happen. When a business responds to a threat instantly, money would not be lost, there will be saving in time, more productivity and the negative impact on customers can all be reduced. Teamwork needs to be encouraged by top management so that any problem at hand can be discussed and possible solutions may be experimented. Doing these actions will create tougher barrier against any threats. Learn from the greats Most successful personalities in any field learn from greatest minds, philosophies, experiments, and ideas. Getting life’s lessons from great businessmen is a sign of strength. Based on the book of Machiavelli, it is a wise move for any businessman to follow the paths undertaken by great men and emulate them. Business mentorship is being done by entrepreneurs and has proved to be effective. 47 Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial Age + Serrano However, itis vital to find the right mentor for any businessman who has similar field, good business style and follow the code of ethics. Just like what Charles Darwin said that “success in business is getting countless small things right”. Most of the times, businessmen focus on big things and ignore those petty items. Forgetting to do small acts will lead to a big difference later on. Big leap of success in business comes from small careful steps. UTILITARIANISM OF JEREMY BENTHAM It was Jeremy Bentham who initiated utilitarianism. For Bentham:” An action is right from an ethical point of view if and only if the sum total of utilities produced by that act is greater than the sum total of utilities produced by any other act the agent could have performed inits place.” In his version of the traditional utilitarianism, he assumed that an action to be moral must provide the greatest benefit for all involved not just to the person taking the action. As a form of consequentialism, utilitarianism focuses on outcomes in deciding right from wrong. The most ethical choice is the action that will generate the greatest good for the greatest number. Utilitarianism as a moral framework is commonly used to rationalize military force or war. It is also the most widely used moral reasoning in business utilizing costs and benefits analysis. However, the predictability and certainty of the future creates the limitation of utilitarianism in determining the goodness and badness of consequences of an action. Obviously, even if utilitarianism is the most reason-based approach in determining right and wrong, it still has some drawbacks. Four Elements of Utilitarianism in Business The theory of utilitarianism can be applied in business in many ways. In order to apply this theory in business, business people must first understand its four elements which are consequentialism, welfarism, individualism and aggregation. Consequentialism means understanding the wrongness or tightness of actions is based on the actions themselves. Businesses 48 Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial Age * Serrano apply the idea of consequentialism in their operations, though it challenges morality and ethics that are being practiced sometimes. Employees are encouraged to act as they want provided the results would be advantageous to the company. Profit is primary goal of all businesses and sometimes immoral, unethical or illegal means are done just to attain this goal. For example, a manufacturing company may use substandard and unsafe raw materials in producing their finished products to reduce expenses and increase profit margin Welfarism, the next element refers to understanding that the wrongness or rightness of operations based on how society’s idea of welfare. Simply, actions are good when they provide the greatest benefit for the majority members of the society. In the area of business, the management may give wages and benefits increase for the well-being and contentment of their employees. This is a positive application of utilitarianism that may strongly affect the work performance of employees. Individualism, on the other hand holds that each person, as a human being, wants to experience happiness, thus, will employ actions that take advantage of utility. With this reality, businesses shall act in ways that bring them happiness. Increased profits, improved customer satisfaction levels, finer reputation, and better employee satisfaction levels, among others are some examples that may bring happiness for businesses. Certainly, businesses will become successful if employees are contented and pleased individually. Aggregation is the outlook that the wrongness or rightness of actions relies on their talent to average the benefits brought to all individuals. This element of utilitarianism suggests that the results of an action must bring happiness both to the individual and the community that surrounds him. A business needs to practice increasing profits simultaneous to providing the best interest of its stakeholders such as its customers, suppliers, employees, the community where it is located and the government. Selling premium quality and harmless products, for instance grant an enhanced intrinsic value to the business at the same time satisfying the needs and wants of its customers. : These elements serve as moral guidelines that will produce the best outcomes. Simply, human beings shall become happier 49 Scanned with CamScannerCorporate Social Responsibility and Good Governance in the Millennial AS® * and would experience less suffering. The challenge however, is the worseness of the results of disobeying and breaking these elements. A lot of businesses replicate utilitarianism in their companies with the belief that it changes people’s lives in many ways. Utilitarianism supports the idea that people should change the world and make it a better place to live in. Hence, doing the most good as much as people can should always be done. In business, majority of companies encourage employees to do the best they can for the greatest benefits of everyone. Types of Utilitarianism Although with some difficulties, still utilitarianism offers the simplest method to decide the best action. The pros and cons of all options including all of the costs need to be considered in concluding for the best action. A lot of companies make use of this principle to gain the most positive effects. Y Utilitarianism produces a black and white of what is morally correct action. In utilitarian ethics, there are no shades of gray; actions could simply be right or wrong. At work, utilitarianism is displayed by working to make certain the workplace is a positive environment for everyone including managers and staff. Intense pressure from within the business world usually forces managers or employers to make extreme decisions. When faced with tight budgets, overwhelming workloads, and incoming deadlines, they must make decisions that may result in ethical dilemmas. Of course, managers or employers may go for a different course of action. They may opt for an action that could be considered most beneficial for everyone. Utilitarianism applied in business holds that actions and policies should be evaluated on the basis of the benefits and costs they will enforce on society. In any situation, the rightness of an action or policy is the one that will generate the greatest net benefits or the lowest net costs. Many businesses depend on such utilitarian cost-benefit analyses, and uphold that the socially responsible action to take is the utilitarian one with the lowest net costs. 50 Scanned with CamScannerUtilitarianism is also applied in government policies and public goods. In spending the money coming from taxes, public projects need to be decide objectively. The decision on public projects must result on the greatest benefits for the members of society at the smallest amount of cost, also known as economic cost benefit analysis. The desirability of putting funds for public projects such as dam, roads, public parks and hospitals should be studied whether its present and future economic benefits offset its present and future economic costs. In order to compute for these costs and benefits, discounted monetary values are predicted for the effects of a certain project on the present and future environment and on present and future populations. Efficiency is also considered in public a project which means operating in such a manner that one yield the most one can with the resources at hand. At the same time these projects need to morally accomplish. There are several types of this theory that exists, which are: 1. Negative Utilitarianism This is probably the rarest form of utilitarianism. This form focuses on promoting the least suffering for the least number of people. A good example of this type of utilitarianism is the very controversial the Responsible Parenthood and Reproductive Health Act of 2012 (Republic Act No. 10354). Basically this law concerns family planning using natural or modern, medically safe and legally permissible methods in order to limit population growth in the Philippines. This is based on the reality that the Philippines is the 12th most populous nation in the world today which could result to overcrowding that will bring hunger, disease, and pain, so each person will be worse off. With the implementation of this law, free contraceptives are provided in health centers to reduce a rise in population. With negative utilitarianism, it is recommended that the government should provide contraceptives, because the program lessens pain although it also lessens the total net pleasure of couples. 2. Act Utilitarianism This is the simplest, most straightforward variation of the utility theory. Business owners who employ this principle tend to judge the outcome of each action individually. The fatal flaw of act 51 Scanned with CamScanner