Business Ethics Introduction

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In this era of globalization, doing business ethically is not only is an obligation, but becoming a necessary for a company to gain society acceptance, improve company image, and contribute to build sustainable economic, market and environment which are the elements that vital for companys long term sustainability. Study of ethic involved complex mix of theoretical orientations including humanistic, behavioural and intellectual, which could defined as the structured and critical examination of how institutions and individual behave in business, which involves appropriate constraints on gaining company profits and self benefits which the actions will affects others (Chris). However, business ethic was a very subjective topic which different individual will have different perception toward how to do business ethically and distinct bottom line of ethic. Hence, ethical philosophies are diversified different perception and bottom line of ethical conducts and behaviours. Regarding to case scenario that giving in this assessment, few ethical philosophies have been stated and applied to the scenario.

Business Ethics 1.) Differences between Philosophies a.) Utilitarianism

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Utilitarianism defined that the decisions that can bring the greatest benefit to majority people is consider as ethically correct. (William H Shaw, 2009)

The advantages of this theory is that comparison can be make for other similar predicted solutions, in order to find out the best solution or the decision which can beneficial majority people. A logical and rationale argument would occur for every decision making, and enable people to apply it on case by case context. However, the disadvantage of this theory is that future is hard to be predicted. There are no human beings can certain their prediction are true. The unexpected results may make the decision become unbeneficial to majority people. In this circumstance, that person would be considering as unethical. (Advantages and disadvantages of utilitarianism Marked by Teach ..., 2007)

It can be divided into two types, which are act utilitarianism and rule utilitarianism. Act utilitarianism defined that a person would perform an act which can benefit majority people even without include their personal feeling and law. For example, a manager was late to the meeting, but the reason of late is that he is preparing additional information and notes for every members in the meeting.(Rainbow)

However, rule utilitarianism is slightly different as compare with above. Although, it also will perform an act to benefit majority people, at the same time, it will provide justice and fairness. For instance, a lecturer is on time to the class, believe she believe that her lecture will benefit to her student, at the same time; she is following the rule that has been implemented in the university.(Rainbow)

Business Ethics b.) Deontology

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The word deontology comes from the Greek. Deontology means duty and logos mean science. Thus, deontology means science of duty. Deontology is a normative theory regarding which decisions is required, forbidden or permitted. It is a theory which guides us on what we ought to do. For example, an older brother may have an obligation to protect his little sister when they cross a busy road together. (Deontological Ethics (Stanford Encyclopedia of Philosophy))1

A more satisfactory foundation for moral rights is provided by Immanuel Kant. It is based on a moral principle that he called categorical imperative. The first version of categorical imperative is act only according to that maxim whereby you can at the same time will that it become universal law. A maxim would become universal law if every person in the same situation choose to do the same thing for the same reason. Kant categorical imperative focuses on a persons interior motivation but not the external consequences of his or her actions. (Deontological Ethics (Stanford Encyclopedia of Philosophy)) The second version of categorical imperative is act in such way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means. This means that treating humanity as an end is that we should treat each human being as a free and rational person. This principle in effect says that people should not be treated as objects incapable of free and rational choice. (Deontological Ethics (Stanford Encyclopedia of Philosophy))

c.) Ethics of Right and Justice (Virtue Theory)

Deontological Ethics (Stanford Encyclopedia of Philosophy). (n.d.). Retrieved from http://www.plato.stanford.edu/entries/ethics-deontological/

Business Ethics

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Ethics of right defined by John Locks as natural rights are certain basic, important, inalienable entitlements that should be respected and protected in every single actionright to life, freedom, and property. This is strongly based in western view of morality. Justice can be defined as the simultaneously fair treatment of individuals in a given situation with the result that everybody gets what they deserve. On the other hand, the Theory of Justice which stated by John Rawls, every person is to have an equal right to the most extensive total system of basic liberties compatible with a similar system of liberty for all. 2

Raising objections to other normative theories and defining itself in opposition to the claims of others, was the first stage in the development of virtue ethics. Virtue ethics aim of the moral life is to develop those general dispositions called moral virtues. Virtue ethics are generally making decisions based on integrity and characters. Moreover, There are six dimensions of virtue ethic in business are community, excellence, role identity, holism, judgment and integrity. 3

d.) Egoism and Hedonism

Egoism generally refers to the pursuit of they own welfare or interests. An egoist completely doesnt care about welfare or anyone else's interests. This means that, in fact they don't care about anyone else's welfare or interests, only they own benefits or benefits. Example if my slaves are hungry, I will feed them. Otherwise they will starve to death and then my pyramid will never be built4.

Khurana, P. (2013). Theoretical Perspective of Conceptual Variables [ONLINE] Available at: http://shodhganga.inflibnet.ac.in/bitstream/10603/9183/8/08_chapter%202.pdf. [Last Accessed 13 July 2013]. 3 2. Athanassoulis, N. (2010). Virtue Ethics [ONLINE] Available at: http://www.iep.utm.edu/virtue/#SH2b. [Last Accessed 13 July 2013]. 4 Egoism. (2013, July 14). Retrieved from Egoism: http://webcache.googleusercontent.com/search?q=cache:http://home.wlu.edu/~mah onj/Ethics/Ethics_Lecture2.htm

Business Ethics

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Term comes from Greek the word "hedonism", refers to several related theories about what is good for people, people should be how to behave, what motivates their behavior and they do. All of the hedonism theory identifies pleasure and pain as the only important elements of the design of any description. Determine if hedonism theory only pleasure and pain are the two important elements, not only the description of the important elements and then they would not be so unpopular because they are. However, the claim that pleasure and pain is the only thing is very important to hedonism and interesting unique philosophy5. The personal egoist in the business world does whatevers necessary to maximize his or her own happiness. What others do, however, is considered their business. Simply to say it means to pursuit of their personal long-term interests6.

Impersonal egoism states that an individual should always act in his or her own best long-term interest7. An impersonal egoist may find comfort in the invisible hand argument that the best way for people to do right with respect to society in general is to get rich. Of course its true that theres something crude in shameless money-grubbing, but when they look at things with rational eyes, it is hard to avoid noticing that the kinds of advances that make lives better. Example, cars affordably produced on assembly lines; drugs from Lipitor to Chap Stick; cell phones and spill-proof pens. It does not mean that an egoist will act against the interest of the society. They may be able to safeguard their interest without hurting the interest of others. When an organization performs or safeguards its interest without

Weijers, D. (2011, August 10). Hedonism [Internet Encyclopedia of Philosophy]. Retrieved from Hedonism [Internet Encyclopedia of Philosophy]: http://www.iep.utm.edu/hedonism/

Egoism: Just Me - 2012 Book Archive. (2011, May 15). Retrieved from Egoism: Just Me - 2012 Book Archive: http://2012books.lardbucket.org/books/the-business-ethics-workshop/section_07_04.html
7

Nine theories of ethics that rule the world - Jan.ucc.nau.edu. (2012). Retrieved from Nine theories of ethics that rule the world - Jan.ucc.nau.edu: http://jan.ucc.nau.edu/~dgs2/theories.pdf

Business Ethics

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hurting the interest of others, then we can say that the organization acts ethically3 (Egoism: Just Me - 2012 Book Archive, 2011).

2.) Application In our point of view, it is ethical for Betty to obey the orders and requests of her superiors. Based on the utilitarianism ethical theory, Betty was performing the act which is beneficial most of the people, even though, her act was illegal. In this case study, both act utilitarianism and rule utilitarianism were applied to the situation.

In the first half part of the case study, Betty plays as a rule utilitarian. As shows in the case study, Betty was disagreed to slash expenses through improper accounting, because this act is breaking the law. Yet, while her superior request her cooperation to make the company finances look better and promised that it was one time fix. Eventually, she was agreed with it. However, she was tending to resign her job because of guiltiness. At this circumstance, although Betty was beneficial majority of them, at the same time, she was following the rule of company, by prepared taking an action of resign.

In the following half part, Betty was changing her role from rule utilitarian to act utilitarian. According to the case study, after the senior executive persuaded her to stay, she was abandoning her desire to resign. At this situation, Betty was not obeying to the company rule and law, although her decision was beneficial to majority of people. Therefore, act utilitarianism was come under this circumstance. Moreover, after she discover the fact was different with what has been promised by her superior. Betty was still willing to assign them, even though the figures were needed to fudge again and again until the company was declare bankruptcy and sued for the guilty of fraud.

Business Ethics Conclusion

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Decision making is much depending on circumstances, individual values, and external influences, however, people will not deliberately make a decision that wrong and harm in their perception. In other word, Betty is trying to make a right decision in the dilemma condition which in the middle of legislation and interests of majority. In conclusion, Betty conducts is unethical for obeying the orders and requests of her superiors. First proven by the intention of her to resign even she holding the high position in WorldCom as manager, which the order of superiors is contradicted with her own set of values and integrity. Ethic may be a very subjective topics, which it is hard to define right or wrong in complex circumstances that might affected large chain of people and other elements. WorldCom is trying to protect company interest and avoid penalty of legislation, confusing Betty which it is act of utilitarianism that protect majority interest of the individuals in the company, however, the true ethical bottom line should be set higher, focus to larger scope, which is not only protect company interests, but to protect the welfare and fairness of society. Regarding the guideline that ethic should focus to larger scope of public, Improper accounting could affect taxation, might involves corruption, and unfair to government and competitors, finally indirectly affecting the society. Hence, Betty conducts are unethical.

Business Ethics

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Bibliography Advantages and disadvantages of utilitarianism - Marked by Teach ... (2007, November 27). Retrieved from http://www.markedbyteachers.com> ... > Politics > Political Philosophy Deontological Ethics (Stanford Encyclopedia of Philosophy). (n.d.). Retrieved from http://www.plato.stanford.edu/entries/ethics-deontological/ Egoism. (2013, July 14). Retrieved from Egoism: http://webcache.googleusercontent.com/search?q=cache:http://home.wlu.edu/~m ahonj/Ethics/Ethics_Lecture2.htm Egoism: Just Me - 2012 Book Archive. (2011, May 15). Retrieved from Egoism: Just Me - 2012 Book Archive: http://2012books.lardbucket.org/books/the-businessethics-workshop/section_07_04.html Nine theories of ethics that rule the world - Jan.ucc.nau.edu. (2012). Retrieved from Nine theories of ethics that rule the world - Jan.ucc.nau.edu: http://jan.ucc.nau.edu/~dgs2/theories.pdf Rainbow, C. (n.d.). Descriptions of Ethical Theries and Principles - Biology ... Retrieved from htttp://www.bio.davidson.edu/people/kabernd/indep/crainbow/Theories.htm Weijers, D. (2011, August 10). Hedonism [Internet Encyclopedia of Philosophy] . Retrieved from Hedonism [Internet Encyclopedia of Philosophy]: http://www.iep.utm.edu/hedonism/ William H Shaw, V. B. (2009). Moral Issues In Business - First Asia Pacific Edition . Cengage Learning Australia.