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04 November 2013

Ethics in Organizations (IV): The Humanist Utilitarianism Model

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This is the final section in which we talk about the ethics of organizations. Once we have identified the ethical challenge in organizations, identified the context of organizations and analyzed the person’s relationship with the organization we will see a model which helps companies to achieve their goal of being successful and ethical.

The humanist utilitarianism model

In unjust situations, if someone wins it is because someone else ends up losing. Following this approach, it means that in the mid term entrepreneurs also stand to lose, because they use a short term business perspective which will not endure over time, as we shall see later.

Illustration 1. The “humanist utilitarianism” model

Image source: Menéndez González in Values of the business administrator in decision-taking: Humanist utilitarianism model.

If the leader has a anthropological perspective in which the man is the end (or the purpose), then he puts the human being at the core of the organization, as the most important thing. In this way, human resources will feel like they are treated as people, and as shown in illustration 1., clients will be fully satisfied, as they will in turn be considered to be people by the employees. The shareholders will be considered in the same way, as people, provided they receive the utilities they expect. This is possible because there are satisfied clients who become addicted to the organization, because they come back time and time again.

Members of governmental agencies will also see that they are treated as people, on receiving payments and tax contributions in due time and form, given that there is a sufficient flow of money for that purpose and the willingness to make the payments.

If the entrepreneur puts human beings at the core of his company, the organization will be able to achieve its goal of “enduring over the course of time”, which we can see in the illustration with the ∞ sign (alpha). He will also take into account other stakeholders, such as suppliers, financiers, current and future community, etc., thereby contributing towards the “common good”, and obtain what should be the ultimate aim of any organization: “to manage to build a real community of people”. This kind of organization will appreciate values such as justice, honor, solidarity, respect, friendship, good humor, etc.

Thus, by putting human beings at the core of the organization, the entrepreneur will be creating a Socially Responsible Company (SRC), helping to ensure that the “Equal Welfare State” exists in society, and establishing a real organizational utopia, thereby building a “People’s Community”. In order to achieve this goal, Organizational Development (OD) will be used, a discipline which since it was founded has been considered to be humanistic, democratic and optimistic.

Conclusion

In this article, I have questioned the raison d’être of ethics in business, arguing that it suffices to become an ethical person and from then on focus on “Honesty in everyday life”.

It is also asserted that the basis for an ethical organization is found in this kind of person, who has an anthropological vision in which man is treated as a person and is always seen as an end in itself and never as a means towards an end.

The raison d’être of organizations is not in maximizing their utilities but in enduring over the course of time. Utilities are a means towards achieving that end. At the end of the day, a people’s community has to be built within the organization. When a person is positioned at the core of the organization, then this is the right situation to build a Socially Responsible Company.

 

Fernando Menéndez González

Researcher and Professor, Instituto Politécnico Nacional (Mexico)

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