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Is cost-benefit analysis a morally defensible technique for making decisions in business Questions around the use of cost-benefit analysis as a tool in the decision making process in business have become even more relevant in the past decade with the increase in cost cutting and productivity enhancing pressures brought on by increased global competition If cost-benefit analysis is to be used in this way then it is advisable to thoroughly understand its limitations and recognize the implications of its use These questions become even more complex as ethical and moral implications are recognized and addressed I intend to promote the position that the use of cost-benefit analysis is morally defensible and perhaps even necessary given the societal context in which we operate However its use should be limited to that of a tool to be used in the decision making process rather than as a final or only determining factor I will begin by taking a look at Steven Kelmans cost-benefit analysis an ethical critique and the replies of James V DeLong and Robert A Nisbet using these papers as a basis for understanding the arguments against cost-benefit analysis as well as their counter-arguments Following this I will present a brief outline of my own thesis and supporting arguments Kelman in his critique of cost-benefit analysis has the purpose of reducing its importance in the regulatory process While this is a different goal and context from the business decision-making process I am examining his arguments are relevant in that they closely examine cost-benefit analysis from a moralethical point of view and the conclusions should be applicable to the business case He presents the prescription of cost-benefit analysis advocates as follows If benefits do not outweigh costs the activity in question should not be performed and to weigh these fairly all benefits and costs need to be expressed in a common scale usually dollars even if some of those costs or benefits are not usually
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