Question

In this discussion board activity, begin by rereading the scenario about the imminent merger presented in the first paragraph of the Blackboard lecture on Moral Philosophies (located on course content page under Business Ethics) and complete the assigned posting listed below. Pretend that you are the person that found the merger information and must decide what to do with it. FOCUS on the ethical NOT the legal issues. Select one (and only one) of the three approaches presented for dealing with ethical dilemmas (virtue ethics, deontological, and utilitarianism) and apply it to this situation. Write a short essay (logical argument) justifying whether you should or should not buy stock based upon the principles associated with the ethical approach you chose (virtue, deontological or utilitarian). Note: Be sure and state which prescriptive approach you are using. Your essay should reflect that you read the merger story and have an understanding of the prescriptive approaches.

IMMINENT MERGER You accidentally stumble upon a document that provides a clear view of your company's intention to merge with a major competitor. The event is imminent according to the description detailed. It is not to be announced to the employees of the two companies, the stockholders, or the public for another six weeks, but according to its author, the senior vice president in charge of acquisitions and mergers, all of the necessaries have been negotiated and there appear to be no regulatory obstacles. You begin to think about what the merger would mean both in general terms and in your life in particular. As a mid-level technical manager, you believe that the merger will be a great success and that Wall Street will view it very favorably. You recognize that knowledge about the merger could be an opportunity for you to invest in some stock. Although it will not make you rich, it will cover most of the costs of your daughter's treatment and keep your family from being mired in overwhelming debt. The scenario described above, while contrived, is similar to millions of situations, called ethical dilemmas, that confront individuals all over the world every day. The ethical dilemmas confronting most of us may not be as dramatic as the one proposed, but they do at some level or other possess similar characteristics. They provide multiple solution alternatives, each of which has its up side and its down side. In the "medical attention" example, there are two alternatives. You could either use the inside information concerning the merger or not. If you did use it, you would be violating the law and company policy, but would be able to provide the necessary medical care for your daughter while not placing your family in indefinite debt. By not using the inside information, you would be maintaining the integrity of both your company and yourself as well as following the law, but you would be jeopardizing your daughter's health and your family's financial well-being. A second characteristic that these ethical dilemmas have in common, that results from the dual-edged nature of each solution alternative, is that there is no universally agreed upon "right" answer. It would be possible for good people to disagree on which alternative is best and proper. It might also be possible for a single individual to come to different conclusions depending on the form of argument that they used to arrive at a solution. So, how does one go about determining which of the solutions to an ethical dilemma is best? In order to cope effectively with these types of problems we need an approach or approaches that we can use. This cyberlecture will provide a brief glimpse of three prescriptive approaches that a person can use to help reason through ethical dilemmas. First, however, we will examine the question of whether or not there is a natural basis for determining what is right to do in any given circumstance or whether what is right is determined by the time and place in which we live. Prescriptive Approaches You will be faced with ethical dilemmas, which require you to choose a course of action. How might you go about deciding which alternative solution to choose? Philosophers have been grappling with this problem for more than twenty-five hundred years. During that time, many approaches have been developed, none of which are universally agreed to always yield the best result. Three broad approaches, consequentialist, deontological, and virtue ethics, find application in our everyday lives and in business settings. Deciding which of theses approaches, if any, fits an individual best is a matter of personal style and belief. To better understand these three approaches and thereby help you decide your feelings about them, it is useful to travel back in time and view the insights of the men most strongly associated with their beginnings. To begin, we travel to ancient Greece where we find the roots of virtue ethics in the writings of Aristotle. Aristotle and Virtue Ethics Aristotle (384-322 B.C.E.) was a student of Plato and a teacher of Alexander the Great. His emersion in the Athenian ethos led him to accept the notion that man has a purpose and that through reason we can come to know that purpose and discover knowledge of what is good for man. He believed that: Every art and every inquiry, and similarly every action and pursuit, is thought to aim at some good; and for this reason the good has been rightly declared to be that at which all things aim. . . . If, then, there is some one end of the things we do which we desire for its own sake (everything else being desired for the sake of this), . . . clearly this must be the good, and the chief good. Will not the knowledge of it, then, have a great influence on life? Shall we not, like archers who have a mark to aim at, be more likely to hit upon what is right? If so, we must try, in outline at least, to determine what it is. This chief good, according to Aristotle, is "happiness", which he describes as consisting of "living well" and "doing well." It is the task of ethics to define precisely what these terms mean. Aristotle approaches the problem by trying to identify what end or purpose man has. He discounts the possibility that living itself is man's purpose because even plants live. Pleasure, in the material sense, is also eliminated as man's purpose because that is the lot of beasts. What is it, Aristotle asks, that man possesses that sets him apart from all other creatures? It is his ability to reason. It is through man's rational function, then, that "living well" and "doing well" come to pass. To "live well," according to Aristotle, means to live a virtuous life. It is not enough, however, to merely be virtuous in thought. Potential must become actual, through activity, i.e., "doing well," for man to fulfill his purpose and be happy. Virtue is of two kinds, that of 'intellect' (e.g., prudence) and that of 'character' (e.g., temperance). In order for man to become virtuous, he must perform virtuous acts. Through practice, man develops a virtuous character which then, coupled with reason, allows him to select actions which maintain and improve his character and thereby improve the virtue of the larger community. Over time, a man, who initially performed virtuous acts at the bequest of parents and teachers, comes to understand that virtue is part of nature and therefore to be sought for its own sake. Aristotle looks at virtue, then, in terms of a disposition to act or a state of character. For Aristotle, the virtuous disposition follows, generally, the rule of the Golden Mean. Each virtue, whether of the intellect or character, can be thought of as a balance or synthesis of two extremes. For example, the virtue of courage is a synthesis of boldness and cool foresight. Thus the man possessing of courage does not succumb to the daring of rashness or the paralysis of cowardice. To be possessed of either of these extremes permits no choice, but becomes a tyranny from which one cannot escape. While Aristotle would have had no concept of the modern business enterprise, his notion of making choices from a virtuous state of character with an eye on maintaining one's own integrity can be readily applied to modern ethical dilemmas. For example, suppose that you, as a representative of management, are negotiating a new labor contract with your mechanics union. The issue on the table is hourly wages. You are deciding how much money to offer. If you are possessed of the virtue of 'liberality', then you would be likely to offer neither too much money (disposition of 'prodigality'), at the expense of investors, nor too little money (disposition of 'meanness'), at the expense of the employees. By acting in this manner, you, the negotiator, are able to maintain your personal integrity and thereby enhance the moral character of the organization in which you work. Immanuel Kant and Deontology Immanual Kant (1724-1804), like so many other Enlightenment thinkers, dabbled in many different disciplines. His early works concerned physics and astronomy and in 1755, he predicted the existence of the planet Uranus, which was not to be discovered until 1881. He is best known, however, for his philosophical writings, and is regarded by many as the greatest philosopher of the last three hundred years. Kant, unlike Aristotle, did not believe that actions are to conform to virtue so as to maintain an individual's character. Instead, he believed that nature offers up a Supreme Principle of Morality that binds all rational creatures, by way of duty, to act according to a categorical imperative. This duty or obligation to act is the cornerstone of deontological ethics. A categorical imperative is a requirement that binds all people, regardless of their own inclinations or the possible consequences. For example, it might be said that there are no conditions under which it is permitted to lie. This would include circumstances in which a person is inclined to lie and in which lying would lead to unwanted consequences. According to Kant, it is not an action that is moral or not, but the subjective principle, or maxim, that underlies it that determines that is the determining factor. If the belief and intent align with the categorical imperative, the actor is considered to have behaved ethically even if unintended negative consequences result. Kant developed several versions of the categorical imperative in his writings, each of which he believed to be equivalent. Two of them are the formula of universal law ('act only on that maxim through which you can at the same time will that it should become universal law') and the formula of the end-in-itself ('act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means, but always at the same time as an end'). To the extent that the impulse to action is in conformance with these formulae, the actor is behaving morally. So, how does the categorical imperative manifest itself when facing an ethical dilemma? Suppose, for argument sake, that you are graduating from college with a Bachelor of Business Administration degree with a concentration in computer information systems (CIS). While you did well in school in general and particularly well in your CIS courses, you took a course in the C programming language but did not learn to program in C++. You are applying for a job at a company that has a C++ position and that you would very much like to work for. You have friends that work there and you know that it would be a great opportunity for you. The issue is that they have an absolute requirement that you know C++. Because you already know C, you believe that you could learn C++ quickly and do a great job for the company. However, you know that they won't even talk to you unless you already know C++. You contemplate including knowledge of C++ on your resume, so that you can get the job. According to the categorical imperative, you would have to decide whether or not lying to get a job should be a universal law to be followed by everyone. If not, then you should not lie on your resume even if it would benefit all parties involved. John Stuart Mill and Utilitarianism The nineteenth century saw a rapid rise in empiricism. Material well-being was growing in convulsions throughout the industrialized world. The age of the machine was well underway and political and social systems began to treat man as an economic creature. Scientific inquiry was invading all manner of endeavor including understanding the relationship of the individual citizen to the state. It is in this context that Utilitarianism, the calculus of happiness, evolved. Its beginnings can be traced to England and Jeremy Bentham (1748-1832) who believed that the measure of any action was the extent to which it brought the greatest amount of happiness to the greatest number of people. Bentham was trying to devise a rational means of setting public policy rather than relying on such notions as natural rights and social contracts. Bentham's version, of what amounts to an ethics of hedonism, made no distinctions concerning the qualities of the pleasures, i.e., happiness, that actions were supposed to maximize. Other things being equal, "pushpin is as good as poetry." John Stuart Mill (1806-1873), a member of Bentham's group of 'philosophical radicals,' adopted the core tenets of Bentham's Utilitarianism, that included the notions of pleasure as being the only end desirable in and of itself and that actions are to be measured by their ability to increase pleasure and decrease pain. Mill believed that pleasure and happiness were synonymous. Where Mill broke rank with Bentham and the ancient hedonists such as Epicurus, is in believing that some pleasures are more valuable than others. For example, Mill argued that sensual pleasures, while more intense than pleasures of the intellect, were of lower quality and therefore it is preferable to be "a Socrates dissatisfied than a pig satisfied." Since happiness is the only desirable end for man, Mill believed that to act in a way that increases happiness and decreases unhappiness is man's duty. Unlike Kant who said that only the motive of an act is important in determining whether or not it is ethical, Mill was not concerned with the motive of an action, only the result. If a selfish act led to an increase in happiness or decrease in unhappiness for the greatest number of people, it is an ethical act. If the motive for an action is pure, but the result turns out poorly, the act is unethical. Utilitarianism is probably the most widely used approach to deal with ethical dilemmas by modern businesses. Perhaps this is because of their penchant for cost/benefit analysis and their comfort with quantitative analysis. Whatever the reason, it is a useful approach to use when decision alternatives can be compared based on the likelihood of their ability to increase happiness (benefit) and/or decrease unhappiness (cost). Look again at the C++ example detailed above. If it is true that you, more than other candidates, could be of much benefit to the company and its customers, i.e., increase their happiness, with minimal cost, Mill would say that it is OK to misrepresent your credentials. In the real world, no single approach to ethical dilemmas has been found. The three approaches presented in the text and this cyberlecture have been found to be useful in many business decision-making environments. It is of value to keep each of them in mind as you make your way through the complex web of ethical challenges that will confront you.

Answer 1

Three prescriptive approaches outlined here help in determining the right set of actions in ethical dilemma. However all 3 have different approach - virtue ethics focuses on character of an inidvidual, deontology focuses on unversally accepted rules and utilitarianism focus on outcomes of actions.

Approach selected : Utilitarianism

This approach states that the actions thesmeslves are not judges but the result is judged. So something that maximizes benefits for everyone is ethical. In the "merger story" let's outline some facts -

i) You are steeped in piles of debt and not paying this on time means you and your family would default on repyamnets leading to sme penal actions

ii) Your daughter is in need of medical treatment and you do not have funds available to provide her the same.

iii) You have got your hands on classified information about merger of your organization and buying a stock now could give you that advantage and headroom.

If you decide to buy the stock now - you may be able to cash in on the gains once the merger news becomes public. The money can help you provide the treatment for your daugher and save your family from debt. This makes your family happy. However what happens on the other side ? The stock that you bought was sold to you by someone. Now that someone has probably missed onto making those gains. In this case it could be multiple sellers from whom you bought the stock (although you will not know who it was on stock exchange). If you would not have bought this stock someone else would have bought it and you have deprived this indvidual (s) of making this gain or profit. In future if this whole episode were to come in light the company might be seen as unethical company in the eyes of public. This might result in fall of stock price and overall business thus resulting in losses. So you and your family would have made a small gain but these other losses far outweigh these gains.

Thus, when viewed from principle of utilitirianism buying stock would lead to overall loss to the society and thus it will be a wrong decision. So based on this prescriptive approach of utilitarianism you should not buy the stock - in short do not use the merger information to your advantage.