Ethical Theories and Concepts - Coursework Example

Ethical theories and concepts In considering different issues in ethics, a distinction is often made between ethics and morals. It is practical to use the words interchangeably as moral theory refers to a set of moral principles that are abstract just like the term ethics. Ethical theories and concepts are the foundation in analyzing ethical issues and express different viewpoints that act as a guidance to obtaining a decision. In this paper, I will discuss the different ethical theories and concepts and how they apply to the given case. The theories I will discuss on are utilitarianism, Kant’s deontology theory, justice theory, rights theory and ethical relativism theory. According to Stuart (1967), Utilitarianism is the ethical theory which explains that any moral decision taken is the one meant to produce much happiness for many people. It also means an action taken that will cause amount of happiness or pleasure. What counts when determining whether the action is right or wrong, is the value of the consequences due to that action. The act is judged to be right or wrong once the consequences are experienced. Kant’s deontology theory of morality states that one should act out of duty. The driving force or motivation behind a particular action determines its morality and not the like utilitarianism where the action determines the consequences. In Kant’s deontology theory, one is able to judge if the act is morally right or wrong before it is committed because it is the thought that counts. According to Hugh (2002), theory of Justice according to Rawls is the consideration of freedom and equality as important. It offers an account of justice as fairness. This is through appealing to the social contract where principles of justice are determine that individuals will agree to in order to cooperate with others and would prefer to have more benefits than problems associated with the cooperation. Human beings are reasonable and rational and want to achieve something together with mutually acceptable and principles that are regulated. The two principles guiding the theory of justice are: ‘each person is to have an equal right to the most extensive scheme of equal basic liberties compatible with a similar scheme of liberties for others’ and ‘social and economic inequalities are to be arranged so that (a) they are to be of the greatest benefit to the least-advantaged members of society (the difference principle) and b) offices and positions must be open to everyone under conditions of fair equality of opportunity’. Ethical relativism explains that morality is relative to the customer of an individual’s culture. The act committed is right or wrong depending on the norms of the society in which it is committed or practiced. What is morally right in one society may be morally wrong in another society. This means there is a different code of ethics for a different culture for any given time. Universal standards are not valid to apply to the cultures at the same time. In examining Right Theory, a right is a justified claim that people or groups are entitled to have like rights to life, expression, liberty and protection. A right requires restraint or action from others. The right theory is understood widely and accepted all over as it is common and gives a basis of discussion in solving an ethical problem. It explains that rights can be applied to all including dead people, animals, fetuses and embryos. A right provides causes an obligation to be provided and it is from the theory of rights that a moral law is provided. Enron scandal left a deep scar causing loss of jobs to many people, loss of jobs and loss money for investors when it went bankrupt. The top executives Kennedy Lay and Jeffrey Skilling were involved in unethical manner. Sherron Watkins acted according to the moral principles (Beenen & Pinto 2009). According to utilitarianism theory the CEO of Enron should have thought about the consequences of his leadership and actions on the employees and the company (Stuart 1967). The CEO fired anyone who questioned his actions or the actions contrary to the laid down rules of accounting. He even transferred employees who were keen on the same to other lower departments that weren’t related to their skills. On the other hand top executives were misleading the public through the ‘eleventh hour’. Auditors and accountants were more concerned with slicing up documents than that bringing everything to life. In the end employees were loosing their jobs especially those who couldn’t withstand the corruption practices (Beenen & Pinto 2009). Others ended up in department they weren’t interested in. The executives didn’t think about other people involved and the company. As they ranked employees and laying off some, they were cashing in millions as well as receiving millions in bonuses for the stock inflation. Board of directors compromised the situation after receiving sumptuous gifts to cover up the scandal. Warnings given to the concerned persons were ignored. The company had a great image to the public and it seemed that it was doing well financially until it was brought down by the stock inflation (Theodore 2002). Employees later lost their retirement funds, lost their jobs, and Enron’s stocks were devalued. But the CEO’s compromise of corruptions made the company tumble down. Jeffery Skilling was driven by greed and money and misused company resources and not putting in mind the amount of money at stake for shareholders. Everyone involved didn’t think about the consequences of their actions. They were only concerned about satisfying their own interests which hurt everyone including including the public. Sherron Watkins on the other hand cared about the stakeholders and chose to report the matter to Kennedy Lay the CEO. She couldn’t stand and watch while immoral practices prevail in the company. She even went ahead to the media in order to stop the practices when the CEO didn’t listen to her even though her job was at stake ((Beenen & Pinto 2009)). . According to Kant’s deontology theory, Enron CEO, the board and other employees involved should not justify their acts. It is already morally wrong to think about the initiation of the scandal leave alone the consequences of the act. Board of directors should not have dwelt on the thought of getting rich by overlooking corruption in the company. Auditors did not stick to their ethics principles and it didn’t ring in their minds. Accountants’ corruption thoughts led them to shred documents and lawyers didn’t take care of justice principles. Top executive spent their time building corruption scandal in their minds other than building integrity. Before something is physically installed, it has to go through the minds. Kant’s deontology theory shows that for all those involved to think of the act is itself morally wrong (Theodore 2002). Everyone at Enron should have equal rights with equal basic liberties. This is a according to the principles guiding the theory of justice. The social and economic inequalities in the company should be arranged to bring greatest benefit to the least advantaged in the company and the society, and the offices and positions must be open to everyone under fair opportunity equality. The top executives, accountants, auditors, lawyers and board of directors at Enron didn’t look out at the interests of the least disadvantaged. They concentrated in making themselves rich to the expense of the public and the staff in the lower positions. If they cared, they wouldn’t have embezzled the company funds and lied to the public (Theodore, 2002). Their actions caused loss of jobs and retirement funds for the employees and investment for the public. They didn’t treat the rights of everybody as equal. There were those who were given special treatments because they were in agreement with the corruption actions and were rewarded by being promoted to higher positions and bonuses. Those who brought in an alarm were fired or moved to other departments or branches that were not of their interest. The CEO of Enron saw nothing wrong in lying to the public as long as the company stayed on the top. He wanted to appeal to the public in order to attract more investment and raise the value of Enron stocks. He together with accountant manipulated the accounting principles to make it look right and justify their actions. They used this to argue their cases with auditors and lawyers and other employees in the company. To them, they were doing nothing wrong going against the accounting rules because other set rules justify the acts. According to ethical relativism, what seemed morally wrong to people like Sharon sounded very right to the CEO and other top executives. The company had come up with their own culture and code of conduct in handling the account matters in that the universal standards of accounting could not apply to Enron at this point. More often, the employees’ rights at Enron were violated. Every employee has rights to liberty, expression and protection. Having a right means all others are restrained from acting in a way that will jeopardize or violet employee rights (Hugh 2002). These rights were never respected by the top executive of the company. Employees like Sharon confronted the wrong actions of the accountants and expressed their need to streamline things in the area. Sharon was at some point threatened to be fired like the rest who paid it hard for expressing themselves. Those who tried to chip in ideas were mocked by Jeffrey thus preventing more employees from giving their ideas. Those who got fired served as an example to anyone who was planning to talk and no employee was willing to risk. Employees’ future is supposed to be protected and that is why savings or retirement funds are very important. The top executives didn’t put this in mind when they decided to embezzle the company money. In the end that protection was lost when employees lost their savings as well as their jobs. The shareholders right to property was also violated. The top executives misused the company resources while lying to the public and thus making shareholders to loose property and other resources. Some employees were forced to give into accepting to play along with the scandal after they were threatened of loosing their jobs. Those with strong moral principles were forced to break them in order to keep their jobs as well as continue enjoying the bonuses, promotions and rewards. Given my explanation and application, there are conclusions that can be drawn from professional practice as a CA/CEO, marketing manager, HR manager, general manager or public sector manager. The top head person should be able to handle matters internally before they are blown like what happened between Sherron and Jeffrey Skilling. He didn’t listen to Sherron and he had all the time to reverse things and direct them in the way they are supposed to be. There are many companies that were on the verge of collapsing due to corruption but when they reversed things back to normal, they are doing very well right now, and Jeffrey missed this point. In case of anything, the top guy like Jeffrey should be the one blame for corruption, though Kennedy Lay deserves of some of it (Donna 2002). A manager should always watch the departments especially the accounting making sure they adhere to the accounting standards. By ensuring this, employee will not take up legal actions against the company. If as a manager I don’t have accounting skills and like Jeffrey Skilling ended up involved in corruption scandal, then I would hire accounting consultants to look at the financials and make sure accounting ethics were practiced. Accounting is always closely related to the upper management in many businesses and companies and a manager cannot say they weren’t involved and it would be understandable if someone from the operations said that duty (Stephen 2007). The responsibilities of a CEO are to ensure that the company is making profit for the shareholders. Kenneth Lay did it but it was not long term. Those who sold their stocks before the company collapsed made huge returns on their investment but those who invested for long term lost everything they had invested (Donna 2002). A CEO or a manager should not betray the shareholders through deception. He should always have an insight of the consequences of all practices in the company. A manager should also provide job security as well as benefits to all employees. He should not involve in any actions that will affect the lives of the employees. He should not be the type to impose systems that threaten the employee jobs. Kenneth Lay failed in this area and his actions caused people their pensions and jobs as well as investment duty (Stephen 2007). . Kenneth Lay’s actions show a manager who doesn’t care what the employees are doing especially when the company is doing very well and they don’t see anything wrong. He instead punishes the whistleblower that later caused the collapse of Enron financially. A good manager is the one who is able to question the actions of those working under him just to ensure that the company is operating in an ethical manner. Otherwise the manager will allow corruption to creep into the organization. A good manager is the one who reverses situations before he embarks on the action. Jeffrey Skilling and Kenneth Lay would have asked themselves how they would have felt if an employer acted in the manner they did causing their loss of jobs and savings (Donna 2002). This would have helped them evaluate the ethical practice of their decisions and actions. This will not have driven Enron to collapse. A manager should also be able to respect employee rights and ensure that they feel secure, cared for and protected. This makes the employees work like they own the company and improve productivity. Kant’s deontology theory of morality states that one should act out of duty (Stephen 2007). The foundation of analyzing ethical issues is the ethical theories and concepts which act as a guidance to decision making. These theories are utilitarianism, Kant’s deontology theory, justice theory, rights theory and ethical relativism theory. Utilitarianism explains that the decision made should produce much happiness to many people. A Theory of Justice considers theory of freedom and equality as important. Right theory claims that people are entitled to have rights to life, expression, liberty and protection. Ethical relativism explains that what is right to one society may be wrong to one society. The top executives at Enron violated employee rights and justified their actions in compromising corruption acts by replacing the accounting rules. They treated the employees unequal and justice was not practiced. A good manager should be able to handle and solve matters internally before being blown in the public. He must also respect the employees’ rights and create profits for the shareholders responsibly. He should also be aware of what his sub-managers are doing despite the company doing well to ensure that they conform to the ethics principles. Reference List Beenen, G. & Pinto, J. 2009. Resisting Organizational-Level Corruption: An Interview with Sherron Watkins. Academy of Management Learning & Education, Vol 8, No.2, 275-289 Theodore, F. 2002.The Enron scandal. Nova Publishers. John, S.1967. Utilitarianism. 3rd Ed.Longmans, Green, Reader, and Dyer. Jack, R. 2003. Encyclopedia of public administration and public policy. Marcel Dekker, Volume 1, 339. Joseph, G. 2000. Ethics and political theory. University Press of America. Hugh, F. 2002. Ethics in practice: an anthology. Wiley-Blackwell, 2nd ed. Stephen, V. 2007. Resisting Corporate Corruption: Lessons in Practical Ethics from the Enron. M & M Scrivener Press. Donna, D. 2002. Enron Lessons for Everyone. Available from: .[22 March 2010] A Moral Challenge: Business Ethics after Enron            by Lawrence M. Hinman            San Diego Union-Tribune, March 31, 2002 Read More