PHI FPX 2000 Assessment 2 Business Ethics and Corporate Responsibility

Student Name

Capella University

PHI FPX 2000 Ethics

Prof. Name:

Date

Introduction

A company’s fundamental obligation is to generate profit and value for its shareholders. However, it also has moral responsibilities and duties towards consumers and other stakeholders. This paper will explore the ethical aspects of a scenario involving Rmblppy (RP), a social media company approached by the United States government to provide customer data for national security investigations. The choice to cooperate with the government raises issues regarding customer privacy, potential benefits to national security, and the impact on the company’s public image, which affects profits and market share. We will analyze the relationships between various ethical issues, assess the primary interests of stakeholders, evaluate RP’s social responsibility, and apply a traditional normative ethics theory to support the company’s decision.

Ethical Issues

The scenario presents several ethical dilemmas related to customer privacy, national security, and corporate responsibility. Concerning customer privacy, there is an expectation that personal information will be safeguarded and kept confidential by the company. Sharing this data with the government would breach this confidentiality and undermine customers’ privacy rights. Conversely, such cooperation could aid national security efforts by addressing issues like terrorism, sex trafficking, and drug trafficking. The moral and ethical dilemma lies in balancing the potential benefits to national security against the need to protect customer privacy. RP must weigh its responsibility to customers with its duty to society. The decision to share or withhold data will influence various aspects of the business, including its public image, customer trust, and market share.

Primary Interest of Stakeholders

Stakeholders often focus primarily on the company and shareholders. However, this scenario requires consideration of other stakeholders, including customers, the United States government, and society. The primary interest of RP’s customers is to maintain privacy and trust that their personal information is secure. Customers may value RP’s commitment to providing secure services, but they could also feel concerned and betrayed if their data is shared with the government. The government’s primary interest is to mitigate potential threats to national security. Access to consumer data would enable early intervention to address potential risks. RP’s primary interests include maintaining a positive public image, ensuring customer trust, and protecting its market share. Sharing consumer data could harm these interests, potentially damaging the company’s public image, eroding customer trust, and leading to a significant decline in market share.

Social Responsibility

To evaluate RP’s social responsibility, we will refer to R. Edward Freeman’s stakeholder theory, which emphasizes a company’s ethical obligations to all stakeholders. According to stakeholder theory, RP should consider the interests of all stakeholders—not just shareholders—in decision-making. This approach involves considering the concerns of customers, employees, the government, and society. Freeman argues that firms adhering to stakeholder principles perform better than those focused solely on shareholder interests (Moriarty, 2021). RP’s decision to protect customer data aligns with this theory, as it prioritizes customer interests and, in turn, supports shareholder wealth. However, stakeholder theory has its limitations, including the difficulty of balancing conflicting stakeholder interests and the lack of clear guidance on prioritizing these interests when they conflict, particularly when ethical considerations involve national security and individual privacy.

Applying a Traditional Theory of Normative Ethics: Virtue Ethics

Virtue ethics, a traditional normative ethical theory, can be applied to justify RP’s social responsibility in this scenario. Virtue ethics focuses on cultivating virtuous character traits and ethical behavior (Hursthouse & Pettigrove, 2022). RP can exhibit these virtues by maintaining integrity, respecting privacy, and valuing stakeholders’ interests. By upholding the virtue of integrity and not sharing customer data with the government, RP demonstrates a commitment to honesty and trustworthiness. Virtue ethics emphasizes loyalty and respect, as evidenced by prioritizing customer privacy over potential national security benefits. This approach reflects RP’s recognition of the importance of protecting personal information and maintaining a trustworthy relationship with its customers. The company’s consideration of the impact on customers, shareholders, and its public image shows a commitment to stakeholders’ well-being.

Gaps or Deficiencies of Utilitarianism

Utilitarianism, a consequentialist theory, evaluates actions based on their overall consequences and the maximization of happiness or well-being. Despite its merits, utilitarianism has relevant gaps and deficiencies in this scenario. Schefczyk (n.d.) notes that utilitarianism focuses on the consequences of actions without considering rights or ethical sentiments, potentially overlooking individual rights, including privacy. In this case, the potential benefits to national security might justify violating customer privacy rights. Utilitarianism also emphasizes maximizing well-being without addressing how happiness is distributed among individuals. While sharing consumer data could aid national security and benefit many, it comes at the expense of those whose privacy and trust are compromised. Utilitarianism may prioritize immediate gains without fully considering the long-term effects on RP’s public image and market share, which could be detrimental to the company.

Conclusion

Analyzing the ethical components and stakeholders’ interests is crucial for understanding the company’s social responsibility. While RP’s primary goal is to generate profit for shareholders, it must also consider the interests of other stakeholders, including customers, the government, and society. By prioritizing customer privacy and refraining from sharing data without legal obligation, RP demonstrates a commitment to honesty, trustworthiness, and protecting individual rights. Upholding virtues such as integrity, respect, and care for stakeholders, RP fulfills its social responsibilities. Utilitarianism’s focus on overall happiness, without adequately addressing individual privacy rights and long-term consequences, presents ethical challenges. Applying virtue ethics helps justify RP’s social responsibility by emphasizing customer privacy, integrity, and stakeholder interests.

References

Hursthouse, R., & Pettigrove, G. (2022, October 11). Virtue ethics. Stanford Encyclopedia of Philosophy. https://plato.stanford.edu/entries/ethics-virtue/

Moriarty, J. (2021). Business, ethics, and Business Ethics. Business Ethics, 1–19. https://doi.org/10.4324/9781351016872-1