Quiz 2: Making Ethical Decisions in the Business World
Case Study a (i) Following are the stakeholders who suffered because of the actions of the PM with the kind of consequences they have undergone: a (ii) In this case, the actions of M made all the stakeholders to had the negative consequences, even though it is gain for M and his family in the initial period. Had M followed the utilitarian approach that ensures maximum happiness to the larger stakeholders, he would not have engaged in these fraudulent activities. a (iii) Egoism is a form of consequentialism that refers to the actions of the person in terms of benefits to him/her or to the person/persons of the choice. In this case, according to the special agent P, M gained personally from the proceeds as he misrepresents the facts, while many others suffered. Attorney PB quoted that the fraud by M is the largest fraud of the human history. He designed it all for him and his family benefits without a thought of the others sufferings. b (i) Following are the duties of M as a company officer and the ways he fell short of fulfilling his obligations. b (ii) In this matter, some may forward the argument that only ethical practice and sense of duty may not be sufficient to deter M to desist from such fraudulent behavior and practice, rather stringent rules and laws and its compliance should have been practiced in the company. While some other may opine that absence of moral character in the personality of M is responsible to induce him to get rich quicker through fraudulent means. Some even think that M never bothered about the consequence of his action. c (i) In regards to the M's fraudulent actions in this case, the analysis of a consequentialist will differ with that of a deontologist as the consequentialist believes in its wide spread consequences on the other hand the deontologist does not believe on the consequences. The deontologist stress on the commitment and duty aspect of the action like always maintaining honesty as the best policy. c (ii) Some may consider that the consequentialism theory identifies the salient moral issues in this case of fraudulent activities by M as it has a wide spread consequences for different stakeholders. Some others may consider overlooking the obligations on the part of the offender was the culprit in this case. The offender, as his moral duty should have express truth and thereby could have prevented the incident. c (iii) Opinions may differ, some may consider one theory as the best suited to all cases on business ethics, while some other may consider that the best theory depends on the nature of the issue at hand. There are some others who still believe that when any ethical issue strikes, it should be evaluated with all the three theory on business ethics to decide which system is best suited.d. Following are the steps to be followed by the chief compliance officer who wants to act ethically in this case using the American Accounting Association Ethical Decision-Making Model: 1. First determine the facts of the issue- who, what, when, where, and how? WHO - In the present case the chief compliance officer representing M WHAT - Security fraud, conspiracy to evade tax, manipulating the accounting records, and expressing fabricated data to the investors with the intention to cheat WHEN - 1996 through 2008 WHERE - In the Company BL in the city of N HOW - M prepared false and fabricated compliance documents and reports submitted to the Security Exchange Commission (SEC). 2. Define the particular ethical issue: a. List the major stakeholders of the case; M, Law abiding tax payers, IRS, Investors, Employees, Regulators, Auditors, IA, Company BL, Wife of M and daughter of M. b. Define the ethical issues; Security fraud, conspiracy to evade tax, manipulating accounting records, expressing false data to investors with the intension to cheat and hiding truth to family and friends. 3. Identify major rules, principles and values: Honesty, fair dealings, integrity and moral obligations for the employees. 4. Specify the alternatives: Alternatives like a moral compromise was not practicable in this case because, the offender has misrepresented his own company through lying and try to cheat its clients. 5. Compare values and alternatives: All the ethical parameters as noted above should lead to the conclusion that in this particular case, the compliance officer should not ignore to the fraud perpetrated by M. 6. Assess the consequences: The consequences suffered by the different stakeholders are different in this case as explained in a(i). 7. Make your decision: In this case, evaluation through all ethical theories would likely to indicate that the fraud committed was wrong from moral point of view and could have been prevented.
Virtue Ethics Virtue ethics refer to the ethical behavior of the individual that comes from within as the morality part of his/her personality. Unlike a consequentiality or a deontologist whose ethical behavior is demonstrated in the outer world, a practitioner of virtue ethics have the right character of his /her own that determines the morality with virtues. In virtue ethics, an individual should have good character to do good things. There is no strict rule in virtue ethics to behave. Therefore, the correct answer is .
Consequentialism Consequentialism is one of the normative ethical theories. Consequentialism is an abstraction of morality, which identifies the action or behavior from the consequences that it generates. Virtue ethics Virtue ethics states that the main phase of morality can be discovered within or inside the personality. Therefore, virtue ethics is agent-centered.As per the above enlightenment, consequentialism is not agent-centered; it is associated with an outcome of action. Hence, the statement is false and the correct answer is .