Business Ethics and Consequentialism - Case Study Example

Business Ethics and Consequentialism Introduction Business Ethics in the economic world involves making justifications or accounting for how things should be (Brusseau, 2011). Business Ethics, therefore, provides the values that guide decision-making on what to pursue and how to protect all the stakeholders in the process of that pursuit; a clear definition of whatever ethical situation; and making clear arguments on how one action helps the set values than others (Brusseau, 2011). Once the situation passes through the 'smell test', one can now decide if it is right or wrong. However, passing the ‘smell test’ is usually hardly conclusively. What may smell right for one person may not be the case for another depending on one’s position. As Brusseau (2011) puts it, ethical issues hardly have conclusive answers. Instead, they tend to invite reasoning, thereby inviting counterarguments. There are a number of approaches to business ethics. Consequentialism is one of them. Consequentialists do not concern themselves with the immediate- if I may say- moral standing of an action. They question what the effects of that action are. They question the outcome that whoever takes a business venture expects. To consequentialists, there are three possible factors that drive the expected outcomes: Egoism, Altruism, and utilitarianism. The objective here is to attempt a practical application of the concepts of Consequentialism in solving certain real-life or possible scenarios. ‘The Sole Supplier’; Utility Test The case of the Sole remaining Supplier is not an easy one. From the consequentialists’ point of view, the primary objective of the Transistor Company must be based on the eventual outcome if it takes or refuses to take the deal. All the arguments for or against taking the deal do- as do many ethical issues- provide loopholes for seemingly credible counterarguments. In order to see this, let us pass this case through the stages of Utility Test. Here, the fundamental question is; by taking or refusing to take the deal, is the Transistor Company maximizing the benefits or harm for the majority of the stakeholders: the beneficiaries of the device, the company, the personal lives of the company employees, and even other companies that get their transistors from them? Sure, the pacemaker does save lives. That is the primary objective for making it. Unfortunately, there are other complications. First, the doctors are still not adept at the implantation procedure. Secondly, the device replaces the natural pace-making process entirely, so that if it fails, one may die. Thirdly, the device is likely to malfunction during natural reactions (such as yawning). In other words, while the device saves lives, it may just be what put's the patients' lives in danger. Nonetheless, the Transistor Company is liable to a potential lawsuit associated with the pacemaker. Sure, the doctors hope that the device saves lives. Unfortunately, there is no assurance at the expense of many other stakeholders. From a utilitarian point of view, taking this deal is not viable. There are two possible outcomes here. The Transistor Company may take or refuse to take the deal. The first case will be beneficial to patients who will need the device. It will also be financially beneficial to the Transistor Company. Unfortunately, this may be at a considerable potential expense. The latter case will benefit only the Transistor Company- at the expense of the patients. A company, however, does not exist in the vacuum. People who also have an obligation to themselves and the families that run the company. A lawsuit would probably bring the company down, and many would have to be laid off. This would not only be detrimental for the employees themselves, but to others as well, for example, their families, other companies that buy the transistors and the country’s economy amongst others. Although the value of human life is immeasurable, one needs to consider if taking the deal- with all the likely risks to all the stakeholders involved- is a viable decision. Taking the deal will surely benefit the patients and the company as well- financially. However, there are no assurances on the financial benefit(s), as we have seen. Again, one would question what the ‘greater good’ here is: is it protecting the fewer sick people or the majority who are direct and marginal beneficiaries if the Transistor Company stays up. Should the company decide against the deal, the likely assumption would be that it has done so for egotistical reasons. Although that is probably true, it is not easy to draw the line between egotistical reasons and genuine concern for the welfare of its employees and all the stakeholders involved. Whatever the case, it is beneficial to the majority of the stakeholders that the Transistor Company refuses the deal. If the decision of the Transistor Company were to be a policy that guides all other such decisions, then perhaps the policy would also provide for the protection of the companies involved against lawsuits. Without such legal protections, the Transistor Company has the obligation to the majority of the stakeholders. The company should not take the deal. The Sole Supplier; Rights Test The Rights Test looks at how an action affects the human rights of the people involved. In this case, we have a conflict of rights: there’s the patients’ right to life, and the Transistor Company’s right and freedom of choice. From a Kantian point of view, the patients’ right to life is ‘positive right’, as it depends on the assistance of the Transistor Company (Valesquez, et al., 2009). The company’s right is ‘negative’ as it asserts the company’s right to a self-serving decision. This case is contradictory in the sense that whatever the Transistor Company decides, it would be serving human rights; that of its employees’ right to employment, which requires that the company does not jeopardize their livelihoods by entering a deal that may subject it to a detrimental lawsuit. Again, the Transistor Company has no right to question what the doctors will use the transistors for. Unfortunately, companies are liable to what use their products are put. This is the reason for the possible lawsuit against the Transistor Company. Both the intrinsic and extrinsic values of rights are at play in both cases. Which human right is the greatest here? Others may argue that the right to life is greater. This argument would be credible if there were assurances on that life. Unfortunately, that is not the case. This means that taking the deal risks the company’s operations, the employees and their families’ livelihoods and, in a broader sense, the country’s economy. This state of affairs waters down the patients’ claim to the right to life. Therefore, it is my view that the Rights Test does not apply satisfactorily here. There’s so much conflict of rights that any forwarded arguments in this respect does not sound credible enough. Conclusion; The Results The results obtained in both Utility and Rights Tests are different. They seem similar only to the extent that they explore the same issue. Otherwise, they are quite different for obvious reasons. The Utility Test is easier to make a decision by than the Rights Test. This is so because it is clear on the role of ‘majority’ in making a choice. As such, it only requires one to establish who the majority are to arrive at an answer. The question of human rights, in the other hand, is not easy to make a decision by. Human rights issues cannot be decided by the idea of the majority, but by the assessing the fundamental concepts that constitute human life. It is here that the problem comes. The question of rights is contextual. To understand human rights one must consider the society (the context) in question. Moreover, there is the tendency of rights to overlap. Here, for instance, we see the contradictory aspect of the human rights’ debate. For one to come to a conclusion here demands that he puts to rest the ever-elusive question of the ‘greater good’. It is this situation that makes coming to a conclusive decision on the question of rights hard. By extension, it is this case that makes the Utility Test a more satisfactory way of assessing this question than the Rights Test. References Brusseau, J. (2011). The Business Ethics Workshop. http://catalog.flatworldknowledge.com/bookhub/reader/1695####### Hamilton, B. J. (2009). How to Use the Utility Test. Ethics Operationalised. http://ethicsops.com/UtilityTest.aspx. Hamilton, B. J. (2009). How to Use the Rights Test. Ethics Operationalised. http://ethicsops.com/RightsTest.aspx. Kay, C. D. (1997). Notes on Utilitarianism. http://webs.wofford.edu/kaycd/ethics/util.htm. Shanks,T. S.J. (1996). The Case of the Sole Remaining Supplier. Markkula Center for Applied Ethics http://www.scu.edu/ethics/dialogue/candc/cases/supplier.html. Valesquez, M., et al. (2009). Calculating Consequences: The Utilitarian Approach to Ethics. Markkula Center for Applied Ethics. http://www.scu.edu/ethics/practicing/decision/calculating.html. Velasquez, M., et al. (2009). Rights. Markkula Center for Applied Ethics. http://www.scu.edu/ethics/practicing/decision/rights.html. Read More