Business ethics theories form the foundations for acceptable behaviors and decisions in the work environment. For some professionals, their business values may run parallel to their religious codes of conduct. The majority of professional ethics are based on the idea of doing what is best for the group and focusing on the moral aptitude of the action, rather than the result. The three main business ethics theories are deontological theory, utilitarianism, and norm theory. One of the largest influences of modern business ethical principles is Kantian theory, which is a type of norm theory.
Deontological theory states that ethical behavior should follow an established set of rules or principles in all types of situations. Even though the actual outcome of following established moral principles may differ, the result does not determine whether the action is ethical. For example, according to deontological theory, it would always be unethical to lie even if lying would prevent an unfavorable consequence, such as death.
Utilitarianism is the idea that business conduct should take into account the consequence that would benefit the largest amount of people. As far as business ethics theories are concerned, it is one that is probably open to a great amount of interpretive differences. For example, in international commerce, the consequences of the decision to impose tariffs might be more beneficial to the group of people on one particular side of the transaction. In addition, it could be argued that the decision's consequences might benefit the largest amount of people in the short-term, but harm a greater amount in the long run.
Norm theory states that certain standards of moral conduct should be followed by the entire group. The acceptable forms of conduct are typically defined for a variety of probable situations. A prime example of norm theory in the business world is the idea of employee handbooks or corporate codes of conduct. These usually provide a framework for how employees should respond and behave in given circumstances, with deviation from the code resulting in disciplinary action.
Business ethics theories related to norm theory include Kantian ethical principles. These principles were developed by a Russian philosopher and theorist who proposed that ethical guidelines should speak to humanity as a collaborative group. Business ethics theories based on Kant's philosophy should treat humans as ends rather than as means. In other words, when developing a code of conduct, an individual should not use others to serve his own purpose or advantage.