Business ethics Research Paper

Ethics

Lauren is faced with a choice between letting a substandard product go through, which would require her to lie, and reporting, it above her supervisors’ heads, which would damage her relationship with those supervisors. As there is no outcome that does not result in harm, this represents a true ethical dilemma (McConnell, 2014). This is basically the prisoner’s dilemma. Yet, there are some subtle differences between this and the prisoner’s dilemma that allow this issue to be resolved.

The basic ethical issue here is that the company has a contractual obligation to its customer. Moreover, depending on the nature of the defect, passing this product could put human lives at risk. But more clearly, the two immediate supervisors are asking Lauren to commit fraud. Unlike in the Prisoner’s dilemma, she hasn’t yet committed a crime, so there is still time to avoid negative consequences entirely. Lauren has to file the report honestly, and let the chips fall where they may. If the supervisors pass along the product that she rejected, she has a duty of care to the shareholders to inform senior management.

Stakeholder Analysis

There are a number of different stakeholders in this scenario. Lauren, the two bosses, the senior management, and the client are all stakeholders, but so too are the customers who will end up using the product. They are perhaps the most at risk, depending on the nature of this defect. There are shareholders for both companies, regulators and employees for these companies, all of whom will be affected. The most important stakeholders, however, are the ones who are either directly affected or have the potential to be directly affected. That means Lauren, the client and the end users who might suffer injury from this defect. The two bosses are not as important as stakeholders go because the outcomes that they face are not the result of Lauren’s choice, but their choices. If senior management comes down on them, then that is because they violated company policy. Senior management is on the next tier of stakeholder, just below. But most other stakeholders are tangential to this issue. Theoretically, Lauren owes a duty of care to the shareholders, but she is looking at the big picture here — a major product defect that management covered up but that eventually kills someone is a lot more destructive that telling the engineers to raise their game, or seeing if the customer is okay with the current specs and test results.

Ethical Approaches

This scenario is a question of an illegal act — fraud — so in that sense it is merely a formality to examine the ethical approaches. Let’s get real — if Lauren is found to have committed fraud she could go to jail and be open for suit in civil court. The scenario was written to frame this as a dilemma in the sense that each choice Lauren makes will have some sort of negative outcome, but in the real world, it is not a dilemma normally to choose between breaking the law for one’s own self-interest and not breaking the law.

The utilitarian perspective is fairly simple, as a result of the facts of the case. There is risk, if Lauren passes the product, to the end user, the client, and ultimately to the shareholders of her company and the other company, to say nothing of the she faces committing an illegal act. The trade-off is marginal at best — Lauren gets to remain buddies with her bosses.. The utilitarian recognizes that there is almost no upside to this choice because both companies are likely to suffer, the minute somebody gets hurt from this product.

The rights approach holds that humanity must be treated as an end, not a mean. The risks that would be put upon the end users and the client are untenable under this philosophy (Velasquez et al., 2014). This is because to approve the product would be to put people at risk, simply as a means of increasing one’s own profit, and that is entirely incompatible with the rights approach.

The justice approach seeks to resolve ethical dilemmas by treating people as equals when they are. In other words, this approach is about fairness. In theory, Lauren could rationalize that it is fair to cheat a little bit but that would be false. The contract terms with the client were agreed to on the basis of negotiation, and fairness demands that those contract terms are met. Lauren’s job is basically to test the products to ensure that they meet the contract terms, so fairness would be to uphold the specs, and reject the product if it does not meet spec.

The common good approach seeks to position ourselves as members of a common community (Velasquez et al., 1996). Thus, Lauren is not positioning herself through the lens of independence. Her actions affect both her and the other members of the community. One of the things that comes ot of this is that Lauren owes a duty of care to the other members of the community. As such, she owes a duty to perform her job as she is contractually obligated, and that means rejecting the product.

Lastly, there is virtue ethics. This approach “assumes that there are certain ideals toward which we should strive, which provide for the full development of humanity.” Who gets to define this is a major issue with this method of decision-making, because ultimately you have to apply it. But one thing that is reasonably certain is that neither greed nor covering for bad work and bad bosses will be among the virtues to which we as a species should strive. Honesty even when it means sacrifice, on the other hand, might be one of those virtues. It’s certainly closer than the alternative presented here.

The different ethical approaches all lead to the same conclusion. One of the reasons is that the proponents of the fraud are dramatically understating the downside risk. First, Lauren could face legal action — and if she cannot prove the bosses ordered her to do it, then she would be the only one. Moreover, both companies could suffer, but Lauren’s company in particular. Only one element of the argument was presented in the case, the idea that the company will suffer adverse consequences if they do not push the product through. But in the real world, there is opportunity cost to this. The opportunity cost is that the company sets itself up for a class action suit, or some other legal action, should the defect is pushed through actually result in harm to person or property. By understating the downside risk, the case creates a framing that there is a dilemma here. If there is, it is a thin one. All five approaches deliver a clear verdict, and so would a jury. The question to break a law or not is not usually an ethical dilemma. This situation is surely not one of the exceptions, because the outcomes to most stakeholders are negative anyway. The hypothetical win — a situation where pushing the product through does not come back on the company — is just that, hypothetical. There is no guarantee that a positive outcome will even occur here, whereas under most reasonable scenarios a negative outcome seems likely.

Conclusions

Lauren should file her report honestly, with the results she has unadulterated. If need be, she should go above her bosses to stop the product from reaching market, though technically that is an independent dilemma unto itself. All five ethical approaches hold that this is the best course of action for Lauren. Additionally, since she would be committing fraud to push the product through, Lauren’s “dilemma” is actually just a choice between doing her job, and breaking the law because her boss told her to. That’s not much of a dilemma.

References

Kuhn, S. (2014). The Prisoner’s Dilemma. Stanford Encyclopedia of Philosophy. Retrieved November 23, 2015 from http://plato.stanford.edu/entries/prisoner-dilemma/

McConnell, T. (2014). Moral dilemmas. Stanford Encyclopedia of Philosophy. Retrieved November 23, 2015 from http://plato.stanford.edu/entries/moral-dilemmas/

Velasquez, M., Andre, C., Shanks, T., Meyer, M. (1996). Thinking ethically: A framework for moral decision making. Markkula Center for Applied Ethics. Retrieved November 23, 2015 from http://www.scu.edu/ethics/practicing/decision/thinking.html

Velasquez, M., Andre, C., Shanks, T., Meyer, M. (2014). . Rights. Markkula Center for Applied Ethics. Retrieved November 23, 2015 from http://www.scu.edu/ethics/practicing/decision/rights.html


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