Case 2: Accountant at Alpha-Male Sport Shoes Business Ethics

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Case Statement

You are a midlevel accountant at Alpha-Male Sport Shoes. Your company competes with the big brands like Nike and Adidas but you offer cheaper prices and more garish fashionable colors. The brand has been doing reasonably well. Your factories are in Vietnam. Your sales are in the USA. The company also has a venture capital arm that seeks to find new avenues to diversify the company in new global markets.

Case Analysis

Ethical considerations have always been, at best a complex and tangled enterprise, not least because of the difficulties in sifting right from wrong, and good from bad. As well, in real world situations, actions that require ethical deliberation and are characterized by moral quandary, just so happen to be embedded in the real-world. This particular case of Accountant at Alpha-Male Sports Shoes is a quintessential example of the ethical challenges often faced in the business context. The case explains how Thuy Nguyen, a Vietnamese-born American citizen, a middle-level manager at Alpha-Male Sports Shoes discovers that her company is involved in illegal drugs trade. She is faced with an ethical dilemma: Should she forward the matter to FBI for investigation, or would it be better for her to remain quiet and let the things continue as they currently are. In this paper, I will argue that Thuy should report the illegal activities of her firm to FBI. In reaching this argument, I believe, Dermatological approach to Ethics is most useful in the given context. I will justify my approach by presenting a brief analysis of how the situation would be viewed under other ethical approaches, namely, Virtue Ethics, Utilitarianism, and Ethical Infusionism.

Let us start with our analysis of the situation using Virtue Ethics. This theory urges people to pursue good and righteousness by asking them to consider: what is righteous and virtuous in this situation, and when prompted by a difficult ethical situation (as in this case), it urges people to think, “do what true/righteous/good people do in these situations”. As is clearly evident this theory fails in the resolution of the issue in this case. First, Thuy is a middle-level manager, and at the same time, she is embedded in a wider social and personal setup. What this means is that it is not easy, given and self-evident for her to tell what is right in this case. There are difficulties in deciding whether she should commit to professional standards such as confidentiality of information and loyalty to the firm, or should she consider her personal considerations, i.e., should she bust the illegal drug trade to reach an emotional resolution against the helplessness and anguish she felt at her brother’s death due to drugs.

The Virtue Ethics theory fails here, because it is too vague and uses righteousness and virtue as abstract concepts, which do not have exact practical counterparts in the real world. Thus, we are back at the first stage: what is right in this context? Virtue Theory is also problematic because it refers to the obligation of being good in socially defined ways. Thus, this theory does not account for Thuy’s personal consequences (good or bad) while suggesting her a course of action. Virtue Ethics offers a cliché response of doing what good people would do. However, good people often have to endure personal difficulties in their pursuit of truth? Is Thuy, the mother, in a position to compromise her personal life and her daughters’ well-being who may suffer psychological stress if her mother gets involved in a legal case of criminal proceedings? Moreover, Virtue Theory fails because it asks Thuy to conform to social standards and to do what good people would do. The problem with this approach is, good people may easily be defined as leaders, who are successful and well-respected. In that case, Thuy might very well idealize her successful boss Cora as a good man, and follow her footsteps in staying silent over the matter and this would mean risking thousands of human lives! As stated above, Virtue Theory offers a simplistic account of excellence and is unable to see the conflicting strands of professional, and personal problems. Virtue Theory would see Thuy’s personal and professional life as one and coordinated and would be unable to explain the dilemma she is in. If Thuy has to excel she should excel in her profession, which would mean that if Thuy strives for professional excellence, again she would have to silence herself.

In the same case, virtue theory fails to explain Thuy’s unique situation. She is both affiliated with Vietnam and the USA. Should she try to prevent the lives of innocent victims of drug trafficking in the USA, or should she worry about protecting the jobs of thousands of her firm’s factory workers in Vietnam. Virtue theory fails because it is ethnocentric. A Vietnamese citizen in this situation might be tempted to save their workers’ jobs, whereas an American might want to save the lives of innocent victims. Thus, virtue theory argues for a culture-society specific moral definition of virtue, which may mean several unethical things go on in the name of virtue. Virtue Theory is problematic because it may define Cora as a virtuous individual on the account of her professional excellence, and hence blinds itself to the sensitive nature of the ethical problems in this case.

Furthermore, the theory is faulty because it runs into a circular argument: how to define righteous conduct, are righteous deeds the ones done by good people? Or instead, are good people defined as those who do righteous deeds. This theory fails because it would lead Thuy to follow uncritically her boss and thus do nothing about the situation. This would mean the theory fails to take into consideration the harmful consequences of Thuy’s silence. Moreover, in this case, as mentioned before, there is no self-evident golden mean, it is difficult to ascertain the righteous and just action.

Similarly, let us consider the application of Utilitarianism in this case. Utilitarianism defines ethical choices about the consequences that arise out of actions. This, from the very onset, is faulty because, it reduces ethics to the benefits one may gain out of one’s actions. Thus, the theory would argue that Thuy should assume silence because that would protect her job and let her family life remain uninterrupted, and to protect herself from involvement in legal matters that may disturb her personal life. This theory, thus, becomes a way of justifying any unethical action by pointing to the benefits derived by the doer. Since the focus is on consequences, Thuy, in her professional and personal capacity would choose to remain silent. Although, this point may be contested by the assertion that utilitarianism aims to optimize the utility of all. But, as mentioned before, the question remains: the utility of whom?

There are two types of Social utilities here, that of Vietnamese society (which would benefit by the protection of jobs of workers in event of Thuy’s silence and letting things go on), and that of American society (which would benefit by busting illegal drug trafficking and save lives of victims in the USA). Is it difficult to calculate reasonably the utility for Thuy? Should she show to prevent Vietnamese’ interests or the American? Should she think of her seven-year-old daughter’s future and her financial security, or try to avenge her brother’s death by drugs by going to FBI. The theory fails here because it cannot account for such difficult and complicated calculations, involving many layers of professional and personal costs involved. Thus, it becomes difficult, if not impossible to talk about utility.

Utilitarianism would urge Thuy to be selfish, and not think about an objective ethical standard that she should follow. Utilitarianism takes no regard of fairness and reduces righteousness to happiness and utility. It fails to see how doing the right thing may make us unhappy and doing the wrong thing may give us happiness.

Let us now consider the perspective of ethical-intuitionism. This theory argues that the right conduct cannot be defined in any external, extrinsic way and is not open to a person’s reasoning. Rather, it is self-evident, and objectivity out there. The theory, as the name suggests emphasizes on the role of intuition in determining what is right. It is difficult to say what this theory’s position would be in Thuy’s case, and this arguably is one of its drawbacks. Thuy’s case is overdetermined: it involves multiple layers of costs involved, ethical, financial and professional costs which will accrue to Thuy. It is not self-evident or based upon Thuy’s intuition to decide what she should do. As the case makes clear, many stakeholders are involved, and Thuy’s decision to contact FBI will have a domino effect on so many lives. Thus, Thuy cannot risk relying on her intuition.

The theory, just like the problematic notion of golden mean, leaves everything to the whims of Thuy. Thus, Thuy’s intuition may be different from somebody else’ and following one’s intuition (often not inseparable from our emotions which are fleeting and non-reliable) compromises the concern for consequences which may result. Thus, instead of an impassionate reasoning, ethical intuitionism asks us to do what our mind says. What it fails to see is Thuy’s mind is pulling her in opposite directions. At once, she is thinking of her brother and other victims of drug trafficking, while she is also considering her job safety and psychological and physical safety and her daughter’s future. Due to which, in this case, Thuy is not able to make up her mind. Problem with this theory is that like Utilitarianism and Virtue Theory, it is highly individual and subjective: it is non-verifiable and explainable and justifiable (to others) and hence, there is no objective reference which may serve as a guideline for actions.

Finally, let us consider the deontological perspective. I believe, it is of most relevance here, because it has a binding element of duty. The theory argues how one should follow a course of action which is in principle the right one. Thuy is morally bound to do what is right, and places a kind of immediacy and urgency to the situation. Instead of just passively ignoring the situation, it urges Thuy to be responsible and self-reflective about what she would do. This theory would urge Thuy to contact FBI because in principle drug trade is unjustifiable. The theory allows for an objective standard of ethics, because it does not worry about the consequences. (I realize that this issue of indifference to consequences is a bit problematic, to which I will come in the later part of the essay). Deontological approach would mean Thuy would not worry about her personal costs and professional costs, and would report to FBI. This approach may be helpful in relieving Thuy of the worry of innumerable consequences of her action, and she may just comfort herself by saying that she did what was right. The theory is useful because it sees good intentions as separate from the actions. Actions may lead to unintended consequences, and sometimes good intentions end up in deeds which prove to be mistaken. Thus, Thuy would in good intent, inform FBI.

The theory is praiseworthy because unlike other theories, it does not say that what is right is given or self-evident or is to be figured out by seeing others, or by following personal whims. Rather, deontological approach places prime importance on the use of reasoning for actions, the solutions of which are not at hand. Deontological approach would prevent Thuy from acting selfish or acting in cowardice by not reporting the illegal activity out of fear of her job, or her daughter’s future. The theory would ask her to not use the situation at hand as a means to her personal or professional ends.

However, we may realize that this theory is also not without its own problems. The lack of consideration of consequences is problematic and so is the undue insistence on performing one’s duty. This can be said so because, as mentioned earlier, Thuy exists in a complex real-world situation. At once, she has professional, familial and personal interests. She does not operate in an environment where there are only winners, or where only ethical gains are to be obtained. Rather, each of her action has both good and bad consequences. Whatever she does will create a set of losers and winners.

In this case, reporting to FBI may be the case where the culturally defined ethical, nationally defined legal and universal human rights perspectives may all be one side, which is to say that drug trafficking is an evil practice which should be curbed. However, there are many ethical conflicts involved at so many levels. For instance, by reporting to FBI, she is risking the jobs of so many people, and the future of her daughter at the cost of actual or potential victims of drug abuse. If she does not report, she will be creating a different pattern of winners and losers. She is not in a position to benefit all or to do the greatest good for the widest possible section of society. Clearly, Thuy is at a critical moment where she has to mediate between various ethical choices and their resulting consequences. It is difficult to say which duty is higher for her, as a mother, sister, as a citizen or as a professional. Perhaps deontological theory doesn’t bother about many individual roles a person is in, and only appeals to their sense of discerning right from wrong by the very virtue of their capacity to reason as human being.

Furthermore, it may be argued that there are numerous stakeholders. Seeing the situation from the company’s perspective, we may see that it is doing both good and bad to the society. At one hand, it is providing good quality shoes cheaper than Nike and Adidas, but perhaps this cost reduction to clients is made possible by profits from drug trade which allow and motivate them to carry on their evil activities in this guise of sports shoes. Thus we see, Alpha Male is creating unfair competition in the industry. By illegally obtained money, it is able to dump shoes (at lower prices) than other competitive and legally compliant firms. Thus, Alpha Male is not only being unfair to its drug victims, but also to its competitors, government and the wider society.

Similarly, we can understand the ethical conflicts in terms of obligations, prohibitions and permissions. From the company’s perspective, it is under an obligation to conform to laws, and to maintain conditions of fair competition. Under the law, it is mandatory upon the firm to be transparent about its activities. Similarly, it is under prohibition to not harm its consumers, not to engage in drug trafficking and not to engage in unfair competition.

However, pricing goods at an affordable level and the range and color of its products are something which are not defined ethically, or legally. Alpha Male may or may not choose to offer higher priced goods. However, it must be seen that even in this case or pricing where there are no prohibitions or obligations, doing so would create an ethical effect. For instance, cheaper goods may benefit consumers who wish to have but could not otherwise afford good quality shoes.

From Thuy’s perspective, it is difficult to as neatly classify her ethical choices in terms of obligations, prohibitions and permissions. Under the law, Thuy is obligated to report the illegal activities of her firm. Under her company’s regulations, she may be obligated to maintain confidentiality of the information and to consult/seek directives from her boss first about the “suspicious nature” of the emails and evidence she has discovered. Clearly, Thuy is not herself sure to what extend if at all her company is involved the in drugs trade. However, one may say that the legal obligation in this case, should overrule the company’s obligations because the national law holds supreme and binding even over the company’s laws.

Similarly, deontological approach would tell us that regardless of legal, or company policies, Thuy is under an ethical obligation to report to FBI, on grounds of this action being correct in principle. However, Thuy has other ethical obligations to her daughter, her deceased brother, and to the wider societies (both the USA and Vietnam). However, other range of choices may be deemed as permissions, such as disclosing this matter to someone other than FBI, or seeking further counsel from someone else before deciding what to do. However, I believe, she does not have too many choices, given the urgency of the situation, she cannot take a middle path of telling someone else. Rather, she has to either be quiet or go to FBI. In this case, the range of permissions would be very limited.

Thus, on the whole we see the range of personal, ethical, professional, legal, cultural considerations are all inter-related in a complex way. And there is no clear unified, single approach which she may take. These complex and often contradicting nature of considerations allow us to talk about the depth of various levels of cost, ethics and practice. I believe, in this case, professional and ethical costs are very deep. This can be said so because, by turning against her company’s activities, Thuy is kind of giving a deep blow to her company’s status by disclosing company’s dirty linen to the law authorities. Similarly, ethical costs are deep as well since her decision will impact thousands of lives across two countries. Moreover, there is a deep level of cost issues, however, these costs, more than being monetary are personal familial costs that Thuy might have to pay by contacting FBI. These depths and multiple levels of costs involved of various kinds allow us to reflect upon their “embeddedness”. This means, our actions alone are never neutral or free from any intended or unintended consequences or connotations. Since we live in a society, our choices affect everyone else around us, and even if they do not, our very own understanding and perception of them is undoubtedly influenced and shaped by society. Thus, our actions, due to their embeddedness can be filtered according to numerous lens such as legal, professional and personal etc.

The discussion can be qualified by analyzing other layers of costs and conflicts in Thuy’s case, however, I believe, in this paper, I have delineated the more significant ones, and have explained how deontological theory (although problematic in other ways) may be better than 3 other ethical approaches. Consequences, undoubtedly are of prime importance in Thuy’s case, as we saw from the discussion on various conflicts, levels of depth and embeddedness, however, deontological approach (at least in theory) offers us to undercut these layers of costs and conflicts and to take a decision which may be objectively defined as the just/fair/correct one.