Ethical Decision Making By The Individuals - Myassignmenthelp.Com

Question: Discuss about the Ethical Decision Making By The Individuals. Answer: Introduction The moral principle through which the individuals conduct any activity and through which their behaviour is governed is what ethics are all about. It is basically the branch of knowledge dealing with the moral principles. The term ethics has been derived from Ancient Greek and means custom/ habit. As inferred from the literal translation, it is the habits and the customs of a person which leads to their ethics, as the same gets shaped according to the environment in which they live and based on their notions about any and all things. In businesses also, the ethics play a crucial role as the businesses follow their own set of ethics. These ethics are derived from the role played by the moral agents in running the operations of the business, where their personal ethics translate into the ethics followed by the firm (Jennings, 2008). The moral agents are such people who play the role of being the company executives and they undertake the decisions based on the needs of the different stakeholders, essentially for whom the business operates. The decisions taken by the moral agent, naturally thus, have an impact over the stakeholders, which could be both positive and negative (Ferrell, Fraedrich Ferrell, 2016). In undertaking such decisions, particularly where the decision is difficult, the leading ethical theories can be applied, as they guide the moral agents on their duties in context of the ethics propagated by such theories. This discussion is focused on highlighting this very aspect, where the ethical theories can be made use of by the moral agents. In doing so, the case of the moral agent of WorldCom, i.e., Bernard Ebbers (BE) and that of Bernard Madoff (BM), the CEO of Bernard L. Madoff Investment Securities would be elucidated. Ethical Theories The best manner of defining a moral agent is a person who holds the competence of making a differentiation amidst right and wrong. Due to this competence, such moral agent can be made accountable for the undertaken actions by them. The company executives are given the duty of running the business of the company for the shareholders and have to do it in a manner that the other stakeholders are also taken care of. The moral agents have been imposed with significant duties and this includes the duty to act in a manner which shows ethics being upheld, and also to make the decisions keeping ethics as the base. In context of decision making role of the moral agents, the ethical theories thus act as guidance for them. The ethical theories also help in identification of the moral agents character, the duties owed by them, and the ethical dimensions of their decisions and actions. In undertaking such decisions, the moral agents have to respect the other people and they have to be responsible towards the decisions undertaken by them. There is a need to provide justification by the moral agents on the choice of an undertaken decision in context of ethical decision making, since the same is relayed across the societies (Weiss, 2008). There have been scholars who have discussed the moral agents in context of the ethical theories. As per Jones, Felps and Bigley (2007) a key theory in this regard is egoism, which covers the individuals acting towards their interest only and not of anyone else, exclusively. The theory of egoism has two sub branches, i.e., ethical egoism and psychological egoism. The first one is one in which the individuals are held to act only for their interest from a normative perspective. This view provides that there is an obligation of people in enhancing the long term welfare along. As per Beauchamp and Bowie (2004), in such cases, the commitment towards other people is not binding. The other type of egoism is psychological egoism, which is basically human behaviours descriptive theory. As per this subset, the people are innately self-interested and they act on daily basis to forward their interest only. Certain moral philosophers have endorsed this theory i.e., ethical egoism; whilst there ha ve been many who have denied egoism as being a normative theory (Barry Stephens, 1998). These are just arguments, as there is a difference in the behavioural perceptions of these; and these do not require any kind of intellectual stretch to provide that ethics are related to others only, instead of being focused on self, in context of the thoughts and behaviours. Another substantial ethical theory which needs to be discussed in the present context is utilitarianism. This theory has been based on the works of Mill, Hume and Bentham through which it is reproved that the moral agents have to promote the welfare of humans and this has to be done in a manner that the best beneficial results are attained and any and all harmful consequences are absent. The cost-benefit calculus given under this approach is applied universally and this means that those who are impacted by the undertaken decisions of a person, as is present in the previous discussed ethical theory of egoism, or for the companies particularly in context of their objective of maximizing profits (Albee, 2014). In the view of certain authors, it has been provided that the ethical theory of utilitarianism is adopted by the moral agents in rule and act as its two forms. The first part gives the rules which have been created for the purpose of getting the most net positive result during a t ime frame. And the second part covers that there has to be maximization of the benefits which are relative to the costs, for the undertaken decision. This theory further dictates that the moral agents have been imposed with the obligation of adopting the actions through which the utility of actions is maximized and so is the happiness of individuals (Jones, Felps Bigley, 2007). When the theory of utilitarianism, which is a consequence based theory, is applied in this context, and which had been propagated by John Stuart Mill, the moral agents get the duty through the principle of utility for the maximization of the intrinsic good, which basically is happiness, and for working towards the minimization of intrinsic bad, which basically is unhappiness. The consequence based approach continues to be an important one towards the process of ethical decision making where no single individual is given more importance than the other one. Based on this theory, the moral agents are expected to be non-biased and non-prejudicial when deciding upon the happiness of every such person who would have to face the consequence of the decision undertaken by them. This is particularly important when the moral agent has a relationship amongst such people. In a strict sense, the correct or the ethical course of action in this theory is one through which the greatest degree of happ iness is promoted and the one which results in the end of the last degree of unhappiness. Such actions are deemed as ethical ones which help in attaining the goal of carrying the moral value successfully (Thomson, Adams Sartori, 2005). The next relevant theory in this context is Kantism, which was given by Immanuel Kant. Based on this theory, the actions would be deemed as ethical, where the adopted course of action is correct one, instead of the results attained by undertaking such action (Beiser, 2014). Kant believed that the moral agents had to undertake the decisions based on the actions being wrong or right through a thorough legislation of the reasoning capacity. When this happens, the actions become obligatory and they have to cover the necessity concept, which is not conditioned and continues to objective, resulting in the same being deemed as valid in a universal manner. As per Kant, this can be done only when the reasons are not biased towards the result of such actions, personal inclinations or that of societal influences (Thomson, Adams Sartori, 2005). Hence, Kants moral philosophy is such that in any given subjective duty, there is a need for the moral agents to question their own self in the matter o f reasonably making the practical law applicable universally, which is the categorical imperative, and which provides that such maxims have to be acted upon through which the universal law is upheld. The next ethical theory applicable upon the moral agents is the one based on character, and this is the theory which is virtue based ethical ideology in which the actions are undertaken as the correct one, based on the character of the person. As per the followers of this theory, in most of the circumstances faced by a person in life, particularly when important decisions are to be undertaken, there is no set of ready-made rules to make such decisions, and there is no relevant data which can be relied upon for permitting the accuracy of predicting the result or the effect of the same (Hooft, 2014). Due to these reasons, virtue ethics differ from the other ethical theories which have been discussed till now, since the theory of virtue ethics is related to disposition or character of a person and is not associated with the actions which align with the impersonal principles. Under this theory, reliance cannot be placed by the moral agents on the previously formed rules, particularly whe n these cannot be applied universally for a particular course of action. The choice between the options requires the moral agents to select a path voluntarily and deliberately, where there is commonality between deficiency and excess. In this theory, such actions are deemed as right which show virtues of honesty, justness, fairness, and integrity, amongst the other virtues (Kamtekar, 2004). The last significant theory in this context, which has to be taken into consideration for the moral agents undertaken decisions and actions, is that of situational intensity. This theory was given by Jones (1991) where he stated that for making the ethical decisions, the moral agent was required to adopt the features of moral issues in context of the temporal immediacy, magnitude of results, probability of effects, proximity, social consequences and concentration of effect, as independent variable. The models which do not consideration these features depict that the decision making process continues to be sae for each and every moral issues. As a result of this, the relevant factors are neglected in context of the other ethical decision-making models. Moral intensity has its base upon the normative arguments of the moral philosophers where they have varied moral obligations based on proportionality, in place of constricting the same from the moral decision making descriptive models. The moral agents extent of influence of moral agents on the events, the probability of effects and the urgency of situation are the factors which form a part of proportionality. As per Jones, the moral intensity of decision influences the ethical decision making in place of the characteristics of the moral agents (Thomson, Adams Sartori, 2005). Application of Ethical Theories The former CEO of WorldCom, Bernie Ebbers (BE) has been charged with the conspiracy for committing securities fraud owing to the false filling under SEC, owing to the number of accounting irregularities which had taken place in the company, which led to its fall, and the executives of the company being convicted. All of the nine courts found that BE had been guilty of this offence and a maximum penalty of 85 years in prison was awarded to him, in addition to t the imposition of fine of $8.25 million (Scharff, 2005). Once this incident had been undertaken, the news was full of character assassination of BE. The news covered a historical trace of BE, back to the time he was a teacher in a school. BE built a telecom company which was the second biggest one in the United States in the last 15 years and he made a lot of money for his investors, but even more for himself (Wray, Finch Treanor, 2002). Though, for BE, the focus was on earning more and more profits for himself, even when the same was not reciprocated for the stakeholders. Here, egoism can be applied on the given situation to decide on the actions of BE being ethical or unethical. Based on this theory, BE was totally self-interested and he worked on enhancement of long term welfare. So, based on BE working towards his own interest, and disregarding the interest of the others, his actions can be deemed as ethical. Where the theory of egoism is also analysed carefully, his actions could not be proved to be in his best interest as he was ultimately put behind the bars and imposed high penalties. Even his personal assets had been attached for the purpose of settlement with investors (The Guardian, 2005). This meant that based on the ethical theory of egoism, his actions were against him, making them unethical. BE had deprived the investors of their invested value and this is the reason why he was held as the leader of the criminal activity which took place in this case (Bayot, 2005). This depicts that BE had failed in working for the others benefit and he did not maximize the utility for other. Applying the utilitarianism theory in this context, the actions undertaken by BE were not at all ethical and were also immoral. In his view, he was working for the investors but the truth of the matter was that his work was self-centred. He continued to be a believer in stating that he was an honest person in his undertaken conducts and he complied with virtue ethics (Norris, 2000). Though, the cash withdrawals undertaken by him had wealth effects where the consumption was sped up in comparison to previous years and the stock prices declined, which showed the lack of virtues. BE did have the clear knowledge regarding the company books being cooked and that the public was fooled in all this. Lies were told by him over and over again in order to cover up the losses which were mounting and for steering clear of his financial decline (Belson, 2005). As per BE, he had no idea regarding the shady accounting as he had left the subordinates to run the company affairs on his behalf (Crawford, 2005). Though, being a moral agent, an obligation which was imposed on BE was to work towards the interest of the stakeholders and towards the benefit of such individuals. This means that he failed as a moral agent based on the ethical theory of utilitarianism. The $11 billion accounting fraud was not only disastrous for him but also for the stakeholders of the company (Rovella Glovin, 2005). These stakeholders included the employees of the company, the investors, and the suppliers, amongst the others. The actions undertaken by BE were unethical, and this brought major trans formations in the law, which was given a more severe status in comparison to the time when the nation struggled with Depression (Norris, 2005). BE and BM were the moral agent of the company formed by BE and this meant that he had the duty of undertaking the decisions which were right for the different subsets of the stakeholders. The business had to be run for the various stakeholders where he was working for the employees, investors and also the society. The moral agent status required him to act in a manner which was ethical. Based on his, he had to work for their happiness to maximize the utility of the action on the basis of utilitarianism theory (Baker, 2009). Where the egoism theory is applied, he failed again due to the major loss caused to his own self. There was a need to adopt the ethical theories in this regard and for him to work based on these theories. Had this been done, the companys reputation and its goodwill would have been raised, resulting in revenues growing and the stock prices climbing up, instead of tumbling down. Though, owing to the sheer lack of the various virtues discussed above, particularly in context of integrity and fairness, damage was caused to a number of stakeholders. Being sent behind the bars for 85 years further affirms the lack of correct application and adherence to ethical theories and highlights the failure of BE as the moral agent. The features of BE and BM were full of falsehood and lies and this caused damage to them. This also led to the company bearing high losses and being imposed penalties. Kantism also shows that the actions of BE were unethical due to his selfishness, dishonesty, deceitful nature and the lack of upholding integrity, which resulted in the company being put in a wrongful position and the financial position of the company being depicted in a wrong manner. The actions of BM were n o less different where he also adopted deceit and dishonesty, who is now famous as an American fraudster. As a moral agent, he had to be unbiased towards the consequence of his actions, or of personal inclinations and societal influences; but his personal inclinations drove his actions. This ultimately denied happiness to everyone. There was a failure in choosing the common grounds in between deficiency and excess since he gave favour to his position. This was not done in a careful or calculated manner owing to his personal benefit as he left behind the evidence of his misdeeds which failed in protecting himself against the actions taken against him. The actions of BM and BE were such were the results of it and the probability of effect were not analysed. This meant that his actions were flop based on the situational intensity. Conclusion Thus, it can be concluded that the decisions made by BE as a moral agent and the actions undertaken by him were completely unethical. This has been established with the help of the four ethical theories discussed. Irrespective of the approach adopted by the ethical theory, the actions of BE, as a moral agent, were unethical, resulting in the stakeholders being wronged. He did not take the decisions on the basis of virtues, self-interest, and morality of actions or the consequences of it. Even in working towards earning profits for him, he failed in keeping his interests safeguarded. The investors lost their money and BE was put behind the bars. The financial position of the company was wrongly portrayed which ultimately led to changes being brought in the laws, to curb reoccurrences of such instances. None of the theories could aid his actions. This case is also a lesson for the executives of the companies of what not to do when they play the role of a moral agent, and on following t he different ethical theories when undertaking a decision about the future. References Albee, E. (2014).A history of English utilitarianism. Oxon: Routledge. Baker, D. (2009).Plunder and blunder: the rise and fall of the bubble economy. Oakland, California: Berrett-Koehler Publishers. Barry, B., Stephens, C. U. (1998). Objections to an objectivist approach to integrity. Academy of Management Review, 23, 162169. Bayot, J. (2005). Ebbers Sentenced to 25 Years in Prison for $11 Billion Fraud. Retrieved from: https://www.nytimes.com/2005/07/13/business/ebbers-sentenced-to-25-years-in-prison-for-11-billion-fraud.html Beauchamp, T. L., Bowie, N. E. 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