Ethics in Finance Essay Example | Topics and Well Written Essays - 2000 words

Ethics in Finance - Essay Example This paper will evaluate the various ethics theories and analyze how they can be used to solve the ethical dilemma. Utilitarianism Utilitarianism ethics theory holds that the right action is the one giving the ultimate form of satisfaction for every one that is affected (Snoyenbos & James 17). It is notable that utilitarianism is a consequentialist moral theory that seeks to evaluate the outcomes of an action rather than the action itself (Van Staverin 21). According to this theory, the rightness or wrongness of an action is dependent on the general effect that the action has on the people it affects. Suffice to say, utilitarianism holds that an action cannot be judged in isolation to be good or bad. In this regard, an action is right if it produces more intrinsic good than any other action that would have been taken. For instance, utilitarianism could hold that cheating is right if it resulted in the saving of lives of people in danger. Actions are right when they maximize happiness and good for all the affected persons. One of the basic objections of the utilitarianism ethics theory is that the judgment of an act is based on its future outcomes (Singer 41). It is not possible for a person to know the precise consequences of his or her actions in the future. Thus, the utilitarianism ethics theory cannot be applied to justify the morality of present actions since the outcomes have to be evaluated first. However, the counter-argument to this objection is that a person can use the subordinate rules to choose the course of action in a particular situation. If in the particular circumstances greater good would result by discarding the subordinate rules, the utilitarianism ethics theory can be applied to justify an alternative action (Van Staverin 23). In the case study, the manager has to make a decision that would result in greater intrinsic good for all the people affected. Linda has had a good financial history with the bank for the past twenty years. In her twe nties, she was financially prudent and made significant savings. In the recent past, she has been in a financial turmoil culminating in frequent overdrafts and exceeding her credit card limits due to depression. Despite this, she has never defaulted on her repayments although her sister Sophie has had to bail her out twice in the recent past. Linda points out that she took care of their mother, Catherine, when Sophie was setting up her businesses. Catherine has been a faithful customer of the bank for the past fifty years. In fact, her account with the bank has been prudently managed over the years and she managed to save some money for her funeral. Her financial position has changed only in the recent past since she has to cover the costs of accommodating her daughter Linda. Sophie has successfully established herself as a business lady with a growing empire of companies. She has bailed out Linda and Catherine twice but she insists that they have to take charge of their financial i ndependence. She proposes that the bank should cut of off their credit card facility as well as overdrafts. According to utilitarianism ethics theory, it would be appropriate for the manager to keep the credit facilities for both Catherine and Linda. The credit facilities would help Linda to obtain money to fulfill her personal and family needs considering the fact that she was no longer working. Also, the credit facility would help Catherine to pay rent and buy food for herself and Linda’