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Posted on May 6th, 2014, by

Business ethics focuses on the application of moral and ethical principles in business situations. Ethical principles and standards of business ethics are the same as in general ethics, but ethical dilemmas emerging in business are more complex, as they involve a variety of stakeholders and might have important long-term consequences. In-depth understanding of business ethics is highly important to any company, because it has a direct impact on the reputation and long-term well-being of the company (Weiss, 2008). Moreover, the well-being of the society also depends on common adherence to business ethics, because companies possess significant resources, and the consequences of their actions affect all people within a particular region or country.

The goal of this paper is to analyze the case of the sole remaining supplier using two different ethics approaches: utilitarian and the common good approach, compare the results of analysis and make conclusions regarding the ethical side of business decisions in this case.

1. General utilitarian issues in the case

Utilitarian approach is based on the analysis of the consequences of actions in the ethical case, and evaluation of good and bad effects of these actions on all involved stakeholders. According to the principles of utilitarianism, an action can be deemed as morally right or wrong only judging on its overall consequences. The goal of utilitarian-driven ethical decision is thus to create the greatest good for the greatest number of people (Weiss, 2008).

Major utilitarian issues mentioned in the case of the sole remaining supplier are related to the imperfections of the new heart pacemaker technology: the doctors were not really adept in installing the new pacemakers (Shanks, 1996); moreover, one patient died because after he had had a deep yawn, the pacemaker wire was pulled into his chest (Shanks, 1996). Potentially, other patients could have died because of the technology defects, and the company supplying transistors for this technology could have also been liable.

On the other hand, this technology could potentially benefit many people suffering from heart diseases who would not have a change to survive otherwise. Thus, the stakeholders involves in this case include company employees, management, company stakeholders, the company manufacturing and selling heart pacemakers, doctors installing these pacemakers, and people with heart diseases. Smell test indicates that there is definitely an ethical issue here, because people whose lives could be saved using this technology as well as their relatives would oppose the company’s decision to stop selling transistors. Detailed analysis of the case of the sole remaining supplier using utility test is presented in the next section.

2. Utility test

Step A. Test introduction

The main question of the utility test is Are we maximizing good and minimizing harm for everyone affected? (Ethics Ops, 2012). The outcomes of every decision in this case can be measured using life and death, happiness or unhappiness, individual preferences or financial position of the stakeholders involved.

Step B. Test validity

All people are equal, and all of them want to stay alive, healthy and happy. Therefore, it is reasonable to consider the decision which maximizes happiness or other good outcomes for all affected parties as the most ethical, from utilitarian point of view.

Step C. Application of the test

Step 1. Identification of possible alternative actions and involved stakeholders.

There are three scenarios which the company can choose. First of all, the company can continue selling transistors to the producers of heart pacemakers. Secondly, the company can stop supplying the manufacturers of heart pacemakers with transistors. Thirdly, the company can continue selling the transistors, with some additional requirements to the quality of own transistors and to the quality of manufacturing and installation of heart pacemakers (for example, increase quality requirements for the transistors sold to heart pacemaker manufacturing company, require extensive testing and higher quality of devices from this company, and require them to train doctors prior to selling them the devices). For all three cases, the stakeholders involved are both companies (the manufacturer of heart pacemakers and the manufacturer of transistors), their employees and management, doctors installing heart pacemakers, their patients, people who suffer from heart diseases and might need a pacemaker in future, and the relatives of such people.

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