For this week’s essay, we were asked to write about ethical dilemmas with reference to four questions asked in a Harvard Business Review article called, How Ethical Are You?
The questions were as follows –
1. An executive earning $30,000 a year has been padding his expense account by about $1,500 (or 5%) a year. Is that…
- Acceptable if other executives in the same company do it
- Unacceptable regardless of circumstances
- Acceptable if the executive’s superior knows about it and says nothing
I selected #2, under a deontology ethical theory (e. g. ethical behaviors come from duty). #1 is a kind of “everybody else is doing it, so why shouldn’t I get away with it?” type of argument. That’s a tempting argument, but it ends up being a kind of hedonistic one.
Personally, I enjoy hanging around and doing nothing on snow days, but it’s far better if I shovel. Part of the reason I shovel is to be kind to my neighbors. Another reason is to keep them from slipping on my property and suing me. But it’s also the case that others might do less than I do. Certainly, as the wind rattles my windows, I would prefer to sip cocoa and stay inside. That’s answer #1.
As for answer #3, that could potentially go to company culture. After all, unless I’m the boss, who am I to question and dictate company culture? But padding an expense account is no way of going about protesting a low salary or attempting to address a financial injustice. It’s a better move for the superior to meet the salary issue head on and, assuming the executive deserves a higher pay rate, then give the executive a raise.
If the executive doesn’t, then this backdoor raise isn’t doing anyone any favors – and it might even speak to ethical issues with the superior. It’s been my experience that salaries come from one company financial bucket, whereas expenses come from another. By looking the other way, the superior is providing a raise via allowing the executive to dip into someone else’s till.
2. Imagine you’re president of a company in a highly competitive industry. You learn that a competitor has made an important scientific breakthrough that will substantially reduce, if not eliminate, your company’s profit for about a year. If one of the competitor’s employees who knew the details were available to hire, would you?
I felt this one was a tossup. I think that there has to be the assumption that virtually anyone is “available to hire”. Furthermore, there is nothing in the fact pattern about this possible future employee being bound by a nondisclosure agreement. If this person is bound by an NDA, and they honor it, then my hiring them – or not – makes no difference in the grand scheme of things, unless they are the main architect of the scientific breakthrough.
And even if they are, the breakthrough has already been made. I just feel like it wouldn’t matter much either way. As for the ethics of hiring one person away from a competitor, that is how people are hired all the time. Top talent always has experience, and that experience is inevitably with a competitor. I just fail to see the damage here, I suppose. Under a consequentialism ethical theory, there just doesn’t seem, to me, to be much that matters in terms of consequences and results of going either way.
3. The minister of a foreign nation where bribes are common asks for a $200,000 consulting fee in return for special assistance in obtaining a $100 million contract that would generate at least $5 million in profits. Would you…
- Pay the fee, feeling it was ethical, given the moral climate of the nation
- Pay the fee, feeling it was unethical but necessary to ensure the sale
- Refuse to pay, even if you lose the sale
This time, I chose #3. Yes, it’s nice to make a profit, etc., but the circumstances are distasteful. I question the requirement of paying this bribe. Perhaps something else could be arranged? This might be less ethical squeamishness on my part, and more like a question of social justice.
In some ways (I’m a cynical person), I’m wondering if I could spend that same $200,000 on a ‘consulting fee’ for someone who could use the money a lot more than a presumably wealthy minister. I recognize that this is often a ‘cost of doing business’. I’d just rather not further line the pockets of someone who’s already in beer and skittles.
My approach is somewhat utilitarian (per A Framework for Thinking Ethically), as my intention is to attempt to make the sale – after all, my fellow employees may be counting on me – while at least trying to quite literally redistribute the wealth a bit more fairly.
4. On becoming a new member of the board of High Fly Insurance Co. (HFI) you learn that it’s the officially approved insurer of the Private Pilots Benevolent Association, whose 20,000 members are automatically enrolled in a HFI accident policy when they pay dues. HFI pays a fee to PPBA for this privilege and gets access to the PPBA mailing list, which it uses to sell aircraft liability policies (its major source of revenue). PPBA’s president sits on the HFI board, and the two companies are located in the same building. Would you:
- Do nothing
- Raise the issue in a private meeting with HFI’s chairman
- Express opposition to this at a director’s meeting but accept whatever position the board takes in response
- Express vigorous opposition and resign if corrective action were not taken. This is an incestuous business relationship. I feel that the answer is a two-parter. I would start with #2. Some of this is a matter of finesse, as board members are high up in any company. You don’t get to that kind of a position without being somewhat discreet. There is nothing in the fact pattern about what happens during that private meeting, and I intend to tell the chairman that this is akin to the kind of logrolling that goes on in cartels. I just can’t see the Federal Trade Commission not taking an interest in such an all-too convenient arrangement.
If #2 failed, I would probably go to the nuclear option, which is #4. And if there’s any price-fixing going on (not in the fact pattern, but a very real possibility in such an arrangement), I don’t want to be on the receiving end of an investigation. I like staying out of Federal prison.
Ethical Dilemmas: Takeaways
My decisions on these ethical dilemmas are more likely to relate to consequences. After all, I don’t relish the idea of going to a Federal penitentiary. But it’s also in the sense of virtue and duty. Dereliction of duty and a failure of virtue also create consequences. Can I sleep at night? That’s often my motivation and my litmus test.
When it comes to these ethical dilemmas, what would you do?