In: Finance
Ethical Theories act as benchmarks while making various decisions in our life. There are various ethical theories among which two prominent theories are utilitarianism and deontology. The merits and demerits of the theories are discussed below;
1. In utilitarianism the decision maker uses his ability to compare various scenario and predict the outcome of a scenario based on his experience. The decision maker will take a decision that will bring about the maximum benefit to most of the people. There are two types of utilitarianism, Act utilitarianism and rule utilitarianism. In Act utilitarianism, the decision maker acts for the maximum benefit of most of the people irrespective of personal feelings or social acceptance for the act. The rule utilitarianism on the other hand takes the decision for maximum benefit of most of the people keeping in mind the applicable rule and after upholding justice.
The major disadvantage of utilitarianism is that the decision maker needs to visualize the outcome precisely to take the most beneficial decision . However , if that visualization of outcome is incorrect, the result may be unethical and not benefiting for the people though the intention of the decision maker was good.
Another constraint is the measurement of maximum benefit in a neutral scale, there may be some tangible benefits as well as some intangible benefits like happiness , satisfaction. Measuring the intangible benefits is a difficult task as there is not standard scale for that.
Another aspect of utilitarianism is that the decisions are made for the benefits of most of the people , so the decision may be detrimental to some people and create disadvantage for some.
In practical situations taking decisions based on utilitarianism may throw conflicting options and deciding on the required action may prove to be challenging.
2. Deontology : In deontology theory of ethics it is told that people should follow his duties and obligations while making decision in practical life situation. Now a person has a specific sets of duties and obligations that he always keeps in mind as reference point while taking decisions. As a result of this the decisions of that person will be quite standardized. When a person is following his duties in making decisions he tends to be always correct ethically.
However, the deontology theory has some limitations. It has no standard set of duties and obligations that all can follow. Every one has his own duties and obligations benchmark that he is following. There may be some practical conflicts in a person's own duties also. For example one Trader may has a duty that he will maximize the profit from the business and he has a second duty that he will not bribe anyone. Now if in a situation the trader needs a business permit from a Govt Inspector , and the inspector will not approve the permit without taking bribe. The profit of the trader will be reduced if that permit is not obtained. In such a case there is a dilemma, it first duty is to be performed , the second cannot be honored and vice versa.
So in deontology theory there is a huge scope of improving and standardizing one's ethical behaviour , but that comes with practical dillemmas as well which we need to manage.