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Ethical Theories and Approaches to Ethics for ACCA SBL

Updated 11 October 2026 · Fact-checked

Ethical theories give you frameworks to judge whether a decision is right. Kohlberg explains how people reason morally, deontology judges the act by duty and rules, consequentialism judges by outcomes, and Gray, Owen and Adams classify how organisations see social responsibility. In SBL, you apply the right framework to the case facts.

Understand Ethical Theories and Approaches to Ethics

Ethics is about what is right and wrong in conduct. In SBL you are not asked to recite philosophy. You are asked to use a framework to explain why people behave as they do, or to judge a decision in the case.

Kohlberg's levels of moral development describe how a person reasons about right and wrong. There are three levels, each with two stages. At the pre-conventional level, the person acts out of self-interest: avoiding punishment or gaining reward. At the conventional level, the person follows the expectations of others: group norms, then law, rules and duty. At the post-conventional level, the person acts on principles: social contract and individual rights, then universal ethical principles such as justice. Kohlberg's point is that people can progress, and that the same person may reason at different levels in different situations.

Deontological ethics judges an action by whether it follows duty, rules or rights, whatever the result. Lying is wrong even if it helps. Kant's idea that you should act only on rules you would want everyone to follow is a common example. Consequentialist ethics judges an action by its results. Utilitarianism is the main form: the right action gives the greatest good for the greatest number. The key contrast: deontology looks at the act, consequentialism looks at the outcome. Each has weaknesses. Deontology can be rigid when rules conflict. Consequentialism can justify harming a minority and outcomes are hard to predict or measure.

Pluralist approaches accept that no single theory is enough. Decision makers weigh several principles, such as duties, consequences, rights and character, and use judgement. This fits real cases, where values conflict, but it gives less certainty.

Gray, Owen and Adams classify organisational views of social responsibility. At one end is the pristine capitalist, who believes the business exists only to maximise shareholder wealth. Next is the expedient view, which still puts shareholders first but takes social action when it pays, for example when it protects reputation or profit. The proprietarian view accepts duties to those with a direct stake, such as employees and customers, and to obey the law. The social contractarian view says the organisation has a contract with society and must meet its expectations. The socialist view puts the interests of society ahead of narrow shareholder interests. The social ecologist view goes further and puts weight on sustaining the wider environment for future generations. The deep ecologist view is at the far end, giving nature intrinsic value. Use these to say where a company in the case sits and whether that stance is sustainable.

Key rules to remember

Kohlberg's three levels: Pre-conventional (self-interest) → Conventional (group and law) → Post-conventional (principles); Two stages in each level. Name the level and link it to evidence in the case.
Deontological test: Right action = one that follows duty, rules or rights, regardless of outcome; Focus on the act and the rule, not the result.
Consequentialist (utilitarian) test: Right action = one that gives the greatest good for the greatest number; Focus on outcomes. Weigh benefits and harms to all affected.
Gray, Owen and Adams spectrum: Pristine capitalist → Expedient → Proprietarian → Social contractarian → Socialist → Social ecologist → Deep ecologist; Moves from a shareholder-first focus to wide responsibility to society and nature. The expedient view acts socially only when it pays. Keep this order.

How to solve Ethical Theories and Approaches to Ethics questions

Use this method for any question that asks you to analyse or evaluate ethical behaviour or an organisation's stance.

1Read the requirement and note the verb: explain, evaluate, advise or discuss.
2Pick the framework that fits: Kohlberg for why someone behaved as they did, deontology and consequentialism for judging a decision, Gray, Owen and Adams for the organisation's attitude to responsibility.
3Define the framework in one or two lines only.
4Pull out case facts that show where the person or organisation sits, such as a quote, a policy or an action.
5Apply the framework to those facts and reach a clear position, for example a level or a stance.
6Evaluate: give a strength and a weakness of the view, and compare with another framework if marks allow.
7Conclude with advice or a recommendation that answers the requirement, with a reason.

Quickest way: Label, evidence, so-what

When to use it: When time is short and the requirement asks for a short analysis of ethical behaviour.

Label: name the level, theory or stance in a few words.
Evidence: quote one or two case facts that justify the label.
So-what: state the consequence for the business or what the person should do.
Add one limitation of the framework if you have time.

Common mistakes in Ethical Theories and Approaches to Ethics

Listing theories without applying them to the case.
Students memorise definitions and think that is what earns marks.
Fix: Spend most of your answer on case evidence. Every theory point should link to a named fact in the scenario.
Treating Kohlberg's levels as job grades or as fixed for a person.
The word level suggests rank.
Fix: Say levels describe the reasoning behind a decision. The same person can reason differently in different situations.
Confusing deontological and consequentialist views.
Both sound abstract and are learned together.
Fix: Ask one question: is the judgement about the act or rule (deontological) or about the result (consequentialist)?
Placing a company at the wrong point on the Gray, Owen and Adams spectrum.
Students match on one word, such as green policy, without checking the motive.
Fix: Check the motive. If social action happens only when profitable, it is expedient, not social contractarian.
Saying one ethical theory is correct.
Students want a neat answer.
Fix: Show that each theory has limits and that a pluralist judgement is often needed. Then still give a clear recommendation.

Worked examples

Example 1

A finance manager at a listed company is told by the chief executive to delay recording a large supplier invoice so that profit meets a bonus target. The manager agrees because refusing might cost the manager's job and the manager hopes for a share of the bonus. Using Kohlberg's levels, explain the manager's moral reasoning and how it should change. (6 marks)

Show the solution

Identify the framework: Kohlberg's levels of moral development describe the reasoning behind the decision.
Apply to the facts: the manager is driven by fear of losing the job (avoiding punishment) and hope of bonus (reward). Both are self-interest.
Label: this is the pre-conventional level.
Show why it is not higher: the manager ignores professional rules and the expectations of the profession (conventional level) and the harm to investors (principle level).
Say what should change: at the conventional level the manager would follow the law, accounting standards and the professional code, and refuse. At the post-conventional level the manager would act on principles of honesty and fairness to users of the accounts.
Advise: refuse the request, record the invoice, and escalate to the audit committee if pressed.

Answer: The manager reasons at the pre-conventional level, driven by punishment avoidance and reward. A professional accountant should reason at least at the conventional level, following the law, standards and the ACCA code, and ideally at the post-conventional level, acting on principles of honesty and the public interest. The invoice should be recorded and the matter escalated.

Example 2

A mining company plans to close a mine early. The closure will save money and raise returns for shareholders, but will cost 800 local jobs. The board argues the decision is right because the gain to many shareholders outweighs the loss to the community. A director replies that the company made promises to the workers and must keep them. Explain the two ethical views and state which stance on Gray, Owen and Adams the board's argument suggests. (8 marks)

Show the solution

Board's argument: judged by outcomes, with total benefit set against total harm. This is consequentialist (utilitarian).
Director's argument: judged by promises, duty and the rights of workers, whatever the result. This is deontological.
Evaluate the board: it gives weight to the number of people helped, but the harm falls on a smaller group and may be severe. Benefits and harms are also hard to measure, and the long-term damage to reputation may be ignored.
Evaluate the director: it protects fairness and trust, but a strict duty may block a decision needed to keep the company viable.
Link to Gray, Owen and Adams: the board puts shareholder return first and treats the community as a cost. That fits the pristine capitalist or expedient stance. The director's view of obligations to workers is closer to the proprietarian or social contractarian stance.
Recommend a pluralist approach: weigh duty and consequences, for example by phasing the closure, offering retraining and redundancy support, and consulting the community.

Answer: The board uses a consequentialist argument and the director a deontological one. The board's position suggests a pristine capitalist or expedient stance, while the director's is nearer proprietarian or social contractarian. A pluralist judgement, such as a phased closure with support for workers, balances shareholder returns with the duties owed to employees.

Exam tips

Do not write a theory essay. SBL marks go to application, so name case facts in every paragraph.
When a case contains a quote from a director, test it against Kohlberg or Gray, Owen and Adams. Quotes are often planted for this.
Show professional skills: take a clear position, use scepticism about stated motives, and communicate in the format asked, such as a briefing note.
Use contrasting theories to show balance, then commit to a recommendation. Do not sit on the fence.
Link ethics to the ACCA Code of Ethics and the public interest when the person involved is a professional accountant.

Practice questions from Professionalism, ethical codes and the public interest

Ethical Theories and Approaches to Ethics: frequently asked questions

What are Kohlberg's levels of moral development?

There are three levels: pre-conventional (self-interest), conventional (following group norms, law and rules) and post-conventional (acting on principles such as justice). Each has two stages. In SBL you use them to explain why someone made a decision.

What is the difference between deontological and consequentialist ethics?

Deontological ethics judges an action by whether it follows duty, rules or rights. Consequentialist ethics judges it by its results, usually the greatest good for the most people. One looks at the act, the other at the outcome.

How do I remember the Gray, Owen and Adams positions?

Learn them as a spectrum from shareholder-first to society and nature: pristine capitalist, expedient, proprietarian, social contractarian, socialist, social ecologist, deep ecologist. Remember that the expedient view acts socially only when it pays. Then ask what motive sits behind the company's actions to place it.

What is a pluralist approach to ethics?

A pluralist approach accepts that no single theory covers every situation. You weigh duties, consequences and rights together and use judgement. It suits real cases where values conflict.