Ethics in Business and Society - Assignment Example

ASSIGNMENT Choose an ethical issue facing multi-national organizations (MNCs) and show how a deontologist and a consequentialist would consider the issue differently and how they might therefore agree or differ as to the appropriate policy for companies to adopt. Abstract This paper is an attempt to discuss the famous business scandal that took place 4 years back in 2005 - 2006 when famous board chairperson of Hewlett Packard named board Ms. Patricia Dunn had been allegedly indulged in Pretexting. In other words, she took assistance of an outside investigative firm mainly because one of the Directors leaked HP’s private board meeting’s discussion and progress. Ms. Patricia Dunn actually wanted to discover who (was the culprit) provided secret information to the personnel associated with print and internet media (Wall Street Journal). The paper will first throw light over the business case and will then demonstrate the ethical considerations by analysing Consequentialist and Deontological theories of business ethics. Hewlett Packard Introduction: Hewlett Packard (HP), which is an American multinational corporation, has been involved in global business of computer products, accessories, instruments and information technology equipments that facilitate in communication, networking, office work and record keeping of business operations. Indeed, HP competes with Dell, Toshiba, Sony, Apple, IBM and other supranational corporations, yet it has achieved the milestone of over $100 billion sales in a year. This is the evidence that products offered by HP are widely acceptable among customers who demand credibility, security, durability and optimal quality for money they spend on goods and services. The global producer and international giant is specialised in manufacturing, production, assembling and marketing of various hardware equipments and software programs for its large pool of actual and potential buyers that appreciate and endorse the ideas and market offerings of Hewlett Packard (HP). Personal computers, laptops and notebooks, computer accessories, peripheral devices such as scanners, external storage devices, variety of printers including desktop, laser, ink jet and large plotters etc, home servers, monitors, calculators, handhelds (Personal Digital Assistants) and computer maintenance services are among the major products offered by HP to consumers worldwide. Ethical Dilemma / Business Case: It should be pointed out that Ms. Patricia Dunn discovered about information leaks when CNET, which is a famous online technology publisher, openly published a story about upcoming HP products, long-term strategic goals, plans and strategies that were going to be implemented to strengthen international producer and seller’s market position, reputation and goodwill. Indeed, Ms. Patricia called that Board of Director’s meeting to mutually decide on alternative actions and policies that could restore HP’s competitiveness and market share as major competitors were just eating away company’s market share during 2005 – 2006. Ms. Patricia had no other choice but to believe that only a director could leak company’s private information when she went through contents and new details published at CNET. In fact, this alarmed the top management and compelled Patricia to get involved in spying of all members of board with the help of an investigation firm to catch the culprit who had violated HP’s code of conduct, job contract laws, terms and conditions. In short, HP condemned that move of an unidentified director and maintained that the director tried to sabotaged HP’s goodwill and adversely affected corporate policies for corporation’s growth, expansion and business sustainability. Obviously, the competitors had become aware in advance about HP’s newly devised strategies that in turn sabotaged efforts of strategic planners at HP. This incident later led to the replacement of then CEO Carly Fiorina and Mark Hurd took office after that scandal (Krazit, 2006). It should be pointed out that Ms. Patricia was condemned because she endorsed the use of an illegal technique of Pretexting that was employed by investigative firm to identify the culprit. Pretexting is widely known as impersonating one’s real identity to get access to an individual’s private information such as cell numbers, credit / visa / debit card, personal bank account details and social security numbers. Indeed, there were mainly three investigative personnel named Matthew Depante, Ronald DeLia and Bryan Wagner that disguised themselves as HP directors and employees so that they could freely initiate and conduct their spying operations and obtain required personal information about actual directors. In more simple words, this was an act through which these personnel misguided all actual HP workers by portraying themselves as Directors. For instance, the sergeants also tracked calls and private records of several journalists employed by famous New York Times and Wall Street Journal so that they could explore who was the recipient of HP’s clandestine information and future plans. It should not be forgotten that Ms. Patricia’s open cooperation, appreciation and endorsement was later discovered during entire course of action. Ronald DeLia confidently replied that the method could not be called illegal by any, however, later that was proven wrong. (Jennings, 2008) Finally, Pretexting technique adopted by investigators worked and Mr. Keyworth was successfully identified as the person who delivered HP private information about future plans. Keyworth was later pressurised by top executives to leave HP as his reputation was spoiled. In addition, Ms. Petricia Dunn, detective sergeants Ronald DeLia and Matthew Depante and global security officer Mr. Hunkaser were charged for getting involved in an illicit activity of Pretexting. Ms. Dunn, although was exonerated from those charges after few months, yet she resigned from her position due to peer pressure and her damaged reputation at the company (Jennings, 2008) and (Krazit, 2006). Ethical Theories and Considerations: The above mentioned scandal is much thought provoking for readers, since it provides insight about internal information security system of HP and the perceived weaknesses in organisational control that led to that mishap. The ethical theorists and business pundits could apply Consequentialist and Deontological ethical concepts and theories in this case to answer if Ms. Patricia Dunn should be forced to resign or not from his place. It is worthwhile to point out that Utilitarian theory is one of the most famous approaches contributed by Consequentialists. The theory, in general, talks about greatest good for greatest number of people in society through use of monetary and social costs (involved and benefits (received) analysis. Utilitarian theory of business ethics says that the solution that brings about the greatest good to the majority of people is the solution that should be chosen and applied. Indeed, this is the right or an ethical choice because this is strictly for welfare of large group while some losses to relatively small group of people are acceptable. Besides other advantages of Utilitarian ethical theory, it is worthwhile to mention the fact that people could compare various proposed solutions using a number system and the most feasible and favorable alternative is considered to be one that receives highest points. As far as implementation of above mentioned theory is concerned, it is justified to suggest that Ms. Patricia Dunn allowed Pretexting and investigation process for greater welfare and well being of her company. She was much concerned with the survival and business expansion of HP, indeed, she had an inclination to offset Hewlett Packard’s rival producers through offering new differentiated and innovated products in existing and new markets. That shows how much she desired for HP and why she called a meeting of Directors (before this scandal) to discuss the issue of increasing competition and HP’s position in that scenario. In this way, Utilitarian theory could be used to justify the fact that Ms. Patricia was loyal to Hewlett Packard and whatever she did, though use of some illegal techniques, was absolutely in favor of her company. Indeed, if she had not endorsed the use of Pretexting, she would have not been able to discover the director who leaked private information because employees at this position obviously do not share any personal information during legal investigation process; neither these executives leave any evidence that could help detectives reveal the truth. Hence, the benefits for using Pretexting were greater than the costs involved because they were, indeed, producing greatest good for the society as a whole. Secondly, employees resist any such move or initiative because they consider it as a personal offence and thus may not be willing to contribute with sergeants. In short, without disguise or impersonation followed by Pretexting, it would have not been possible to catch the real HP black sheep. Above all, the loss of information and persistent internal control could have brought severe economic losses to HP after this incident that might result in job losses and subsequent decline in purchasing power of employees and their households. In addition, the any business failures of HP in near future due to information leakage would have also deprived governments from tax revenues. Therefore, Patricia should be considered as innocent in this case as she wanted to save her company and jobs of thousands of workers who were employed at that time. As far as Deontological concept is concerned, it says that a person’s action is considered morally right if he has good will whereas it should be morally wrong if the person has bad will. For instance, the school of thought is absolutely opposite of and different from Utilitarian principles because the theorists argue that immoral choices and alternatives should not be supported and followed because they may tempt other people in the society to forgo right choices and use immoral options. It should be clarified that Deontologists argue that immoral options should not be selected in scenarios even if they could generate greater benefits and welfare for society unlike morally right and ethical choices. In addition, what is morally right is preferred by deontological school of thought unlike the focus on greatest good and societal welfare even through use of morally wrong choices in Utilitarianism (Cline, n.d) & (Alexander, 2007). Nevertheless, It should also be recalled that employees including members of Board at Hewlett Packard were exploited and deceived by investigative agency followed by spying of journalists and columnists of Wall Street Journal and New York Times. Hence, in this way, Pretexting, an illegal activity, was used for the right purpose of determining who actual leaker of HP company information was. Without any doubt, the detectives openly violated’ privacy rights’ that every individual citizen secures in our society as described by court of law and no unauthorised person could intervene or hijack these personal rights. Schorn (2006) has pointed out the fact that Patricia Dunn supported the use of Pretexting because she had already expressed zero tolerance policy for those who would go against company rules and regulations. In addition, the internal business operations were disturbed after that event and trust factor among employees had eroded that was destructive for smooth functioning of HP. In short, there was dire need to bring culprit behind the curtain and punish him / her thereby setting an example for other HP workers. Since, Ms. Patricia supported illicit Pretexting for the right cause of survival of her company then her loyalty towards company could not be challenged in any instance. Nevertheless, the technique used is not morally right because it involved the use of deception, impersonation and misleading for attainment of private information of company directors. In a nut shell, use of Utilitarian principles will endorse the idea that Ms. Petricia should have not been forced to resign from her position being a chairperson because she supposed that secret information about the company’s short term and long-term strategic goals, products, system, policies, diversification and others would inform competitors in advance that in turn would allow rivals to overcome their weaknesses. Hence, HP would be disadvantaged as it would lose a competitive edge over its major rivals such as Toshiba, Sony, IBM, Dell, Apple etc. after disclosures and thus would not be able to achieve defined targets. In contrast, the Deontologist school of thought will condemn and relegate the use of Pretexting because it was against an individual’s values and moral rights. Rather, the use of deontological approach suggests that Ms. Patricia should have resigned because she endorsed the use of an illegal, ethically and morally incorrect technique to catch the culprit and punish for leaking clandestine information. For instance, the HP CEO should have used any other procedure and investigation tool (for the right cause), which would not result in violation of country’s law, rules and regulations. References Gonsalves, Antone. (2008) “HP Settles Spying Case with N.Y. Times, BusinessWeek Reporters” InformationWeek [Online] Available at http://www.informationweek.com/news/globalcio/showArticle.jhtml?articleID=206504249 [Accessed: November 16, 2010]  Jennings, Marianne Moody (2008). “Business Ethics: Case Studies and Selected Readings”. Pp. 184-187 [Online] Available at http://books.google.com.pk/books?id=nWZSKxfVVYIC&pg=PA184&dq=Peter+Dunn+case+of+Pretexting+at+HP&cd=1#v=onepage&q=Peter%20Dunn%20case%20of%20Pretexting%20at%20HP&f=false Krazit, Tom (2006). “FAQ: The HP pretexting scandal” Cnet [Online] Available at http://news.cnet.com/FAQ-The-HP-pretexting-scandal/2100-1014_3-6113011.html [Accessed: November 16, 2010] Schorn, Daniel. (2006). “Patricia Dunn: I Am Innocent”. Cbsnews.com [Online] Available at http://www.cbsnews.com/stories/2006/10/05/60minutes/main2069430.shtml [Accessed: November 16, 2010] Wong, Grace (2006). “Now, HP is a criminal case” Money.cnn. [Online] Available at http://money.cnn.com/2006/10/05/news/companies/hp_california/index.htm [Accessed: November 16, 2010] Faculty Washington (n.d) “Consequentialist Ethical Theories” Washington University [Online] Available at http://faculty.washington.edu/wtalbott/phil240/trconseq.htm [Online] Available at [Accessed: November 16, 2010] Cline, Austin (n.d) “Deontological, Teleological and Virtue Ethics” About.com [Online] Available at http://atheism.about.com/library/FAQs/phil/blfaq_phileth_sys.htm [Accessed: November 16, 2010] Alexander, L. (2007) “Deontological Ethics” Stanford University [Online] Available at http://plato.stanford.edu/entries/ethics-deontological/ [Accessed: November 16, 2010] The Institute of Business Ethics: http://www.ibe.org.uk Ethical Trading Initiative: http://www.ethicaltrade.org.uk Business for Social Responsibility: http://www.bsr.org Read More