Egoism:

This theory looks at an action in light of these consequences for only one entity, the person deciding whether an action is ethical. In other words, if an action is good for me, then it is ethical. The plus of that theory is that it is easy to apply--you need only look at a proposed action, figure out the consequences for you and if they are good then the action is ethical. The minus of the theory is that it obviously leads to many conclusions that most would agree are not ethical. Suppose you have a baby food plant and have some rotten fruit If it would be economically feasible to use that fruit (amount in profits vs. amount in lawsuits and lost public relations) then it would be absolutely ethical to use that fruit. Apply that example to out of date medications in the third world and you can see that it might be hard to make a straight-faced argument that this theory promotes what most think of as ethical outcomes. Think VERY carefully before you use this theory to justify any conclusion in today's business world.
Libertarianism:
This theory is a little more nuanced. You are still looking at only one aspect of the situation and that is how it upholds or promotes liberty, but you need to look at how the action upholds or promotes liberty for all those who might have rights. This theory looks at whether an action violates anyone's' liberty and liberty is defined as the right to property you have legally acquired and the right to be free from the unwanted or unagreed-to interference of others with your liberty. You can agree to have your rights or liberty violated if you do so with complete knowledge of the consequences of your agreement. In the baby food example above, the owner of the baby food plant has the right to use the rotten fruit since he acquired it legally. However, he can sell the baby food only if the people buying it understand that it was made from rotten fruit and understand the consequences. If he sold it without telling them, then that would be violating their rights. But if he tells them and gives them complete information, then that is their right. If they want to chance illness for perhaps a lesser price, then that is their right. If people disagree with that and think it is not ethical, then they won't buy it and the plant owner will go out of business or stop selling rotten baby food--the marketplace will decide.
The plus of this theory is that it allows people to exercise free will--actions are ethical if they do not interfere with my rights and I don't interfere with your rights. If I decide to save money and buy bad baby food, what is it to you? Of course, we are ignoring in this case the baby's rights but that is a whole separate issue of children's and parental rights.
The minuses of this theory are one (1) the definition of rights and (2) the complete knowledge requirement. Under libertarian theory, you have the right to what you own legally and don't have rights in many things that we traditionally think of as rights. For example, while in our society we talk about the right to a job or a right to go in a commercial establishment, under libertarian theory you don't have those rights. The employer has the right to hire or fire since it is his business and his salary to give out. The property owner has the right to set whatever rules he wants to run his property. Theory is that if society does not like what the employer or property owner is doing, they will not support that business or property and the employer or owner will have to change to keep his business. The second problem is the complete knowledge problem--easy enough with rotten fruit if you tell the buyer and indicate that the food could cause intestinal upset, etc. or smoking when you post a sign saying second hand smoke can cause cancer. But how complete can the knowledge be when you are dealing with complicated subjects such as drugs, pesticides, etc. and people who might not be educated?
Utilitarianism:
This theory is one of the easier to apply (in theory!). Basically, an action is ethical if it promotes the most happiness for those affected. The most happiness is not only calculated by determining how many people benefit and how many hurt but also how much they are helped or hurt.
Thus, an action that minimally benefited 10 will not be ethical if it severely hurts 5 people although it would be ethical if it minimally hurts 5 people. This becomes a little more nuanced when you consider the difference between rule utilitarianism (consider the effects of a general rule) and act utilitarianism (consider the effects of each individual act).
The plus of this theory is that it allows you to come up with a fairly simple equation that is determined by the number of people and the extent of the effect.
The minus is coming up with that equation--how to you assign units of happiness to actions? How unhappy are people forced to go outside to smoke? How happy are those who are not subject to second hand smoke? Obviously, there is an element of subjectiveness to this determination and if you choose to apply this theory, it will be up to you to argue that one side outweighs the other. The other minus might arise in the application of the theory after you have done all the calculations. As a practical matter, are there are any absolutes? Is murder okay if it would save the lives of millions (the Hitler/Idi Amin example)? How about if it would save thousands? Hundreds? It is up to you where to draw that line and in writing a persuasive paper, it is up to you to make that plausible argument.
Rawlsianism:
This is a theory that usually causes some confusion because Rawls is usually used to justify political, social situations rather than the business situations that we are going to deal with in this course. For political/social/economic situation, then Rawls' theory of justice and its principles of liberties and inequalities are most useful. However, in the business context, your arguments are much more easily formed and defended if you remember two phrases--the original position and the veil of ignorance. When deciding whether an action is ethical, you must put yourself in the original position, behind the veil of ignorance, where you retain all your knowledge of the world, situations, consequences, etc. EXCEPT you don't know your place in that world. In other words, you know that bad baby food causes illness, that there would be a public relations fallout, etc. but you don't know if you are the company owner, the parent of a baby that got sick from buying the cheaper food or the parent of a baby that did not sick and who benefited from saving money in buying that cheaper food. Would you think a action ethical if you did not know if you personally would be helped or hurt by the action? How do you make that calculation? First, you must identify the people who would benefit or be hurt by a proposed action, and then figure out your odds of being one of those people. In our baby food example, your chances of being the owner are pretty slim--that is only one person. But assuming most kids would get sick, your chances of being the person with the sick kid are pretty good. Then, just as in utilitarianism you must figure out the extent of the benefit or harm. As the owner, you might have a monetary benefit but again your chances of being that owner are slim. As the parent, your harm is potentially great (botulism, etc.) and your chances of being that parent is substantial. When you weigh all the odds, you probably are not going to want to take the chance of being that parent and you would decide that selling that baby food is not ethical.
The pluses and minuses of this theory are the same as util.--and that makes sense. Rawls designed this theory to be utilitarianism with a heart, to take the pure numerical calculation out of the system.