Transformation from the Ethics of Care - MyAssignmenthelp.com

Question: Discuss about the transformation from the Ethics of Care. Answer: Introduction Corporate governance refers to the set of policies and conducts which are used by an organization to direct and control the entire work process. The way in which authority and accountability flow between the stakeholders, Shareholders, CEOs and the various managers in the company is known as corporate governance (Tricker Tricker, 2015). The managers and shareholders have a common interest in respect to the companys growth (Beery Wilcox, 2015). However, the problem occurs when these interests diverge in their intentions and take a personal turn rather than the shared common goals. An organization must have one interest group that follows the common interest of companys growth so that in return they are served with better incentives for their hard work in taking the company to the dream position. The situation worsens when the interest groups are more than one and people are enriching themselves rather than the company. The managers or the moral agents of the company are far more exp ert and fluent with the aspects of management than the shareholders (Glinkowska, 2017). This can lead to them taking decisions that are meant for personal benefits rather than long-term benefits of the company. The report aims to shed light on the various issues of corporate governance together with the ethics that are to be maintained by the moral agents of the company. WorldCom and Bernard L. Madoff Investment Securities faced decline due to their misconduct towards the ethics of corporate governance. The moral agents, namely Bernard Ebbers and Bernard Madoff of the respective companies will be taken into consideration for the report. The success of a company in the market and the extent of trust it garners among its shareholder depends on the various values that are to be maintained by the company agents to ensure stability in the market. The moral agents have the immense duty to abide by the ethics and to understand that they are responsible towards the all those who are associa ted with the company (Harris, 2013). The discussion will lead to a better understanding of the practical implementation of these ethics and guidelines that are to be followed by the morals agents of a company. Ethical Theories According to Goldman, ethical theories cover the field that systemizes, defends and randomizes the ideas of right or wrong behavior pattern A person who works as the agent of a company dealing with the moral aspects of the working process must have the capacity and ability to perform in a moral way and make proper moral judgments. The company executives who works as the moral agents are the ones who need to have a rational thinking base and the individual must always resort to ethical and virtuous practices. According to Melden, the ethical theories can be divided into two further segments- Consequentialist theories Non- consequentialist theories Consequentialism set of normative ethics believe that an action is judged as right or wrong by the result it creates after implementation. This set of theorists believes that it cannot be decided that a decision taken up by a moral agent was wrong unless we find the results from the decision taken (Carlson, 2013). It is often found that at times the moral agents take some harsh decisions that are not abiding by the ethical code but they end up adding positively to the company. Hence, only the outcome decides if the step taken was right or wrong. The consequential theories are- Egoism Utilitarianism Egoism theory is a consequential business theory that pursues self-interest as the primary target (Broad, 2014). The theory is an opposite of altruism, as the latter believes in the benefit of others rather than the benefit of self in the ethical egoism theory (Salmieri, 2015). The individual gain is the biggest motive that fuels the egoist moral agents and this leads to realization of the fact that an egoist is not selfish. However, the words egoist and selfish are relatively similar but it is not necessary for an egoist to be selfish. The egoists pursue individual advantage and if this can be done by helping others than that is what they will do so that the ultimate benefit is associated to them. It does not necessarily mean that egoists behave maliciously and treacherously with others. There are two kinds of egoists: Personal egoist who only care for their own interests, and the impersonal egoists, who are those individuals that claim that the chasing ones interest will motivate t he entire the group (MacDonald, 2015). Utilitarian theory of business ethics refer to the theory that suggests that the selection of a decision depends on the extent of benefit it will incur to the maximum number of people. A decision will be taken for the maximum benefit and whatever is decided will be regarded as the ethical decision if it results in incurring the maximum benefit for the people associated with it (Neher Sandin, 2015). The short-term benefits are targeted or the long-term ones remains a foremost concern of utilitarian theory being in practice. As it is, something that is targeted for the maximum benefit hence the duration of the benefit ripped from the decision is something that the executives must be concerned with while using this theory in their work process. The non-consequential theories of refer to the set of business theories that fall under the set of normative theory. This set of theory belives that a decision should be taken keeping in mind the goodness and morality rather than always thinking of the possible outcome that may profit or loss. The theories are based on the moral goodness and badness of a decision that will be taken by the company moral agents. The Non-consequentialist theories that are applicable in business are as follows- Virtue theory Kants ethics Ethic of care Virtue theory is a non-consequential business ethic that deals with making decisions based on certain virtues that ensure the desired result. The virtue in virtue theory lies in selecting the trait that is required to select between the extreme points of decision making that involves either courage or cowardice in the managers part (Bell, Dyck Neubert, 2017). The agent is continuously involved in finding a way to get a balance between the two extremes. The various virtues that guide the decision making process are courage, integrity, wisdom and fairness. Virtue ethics pursues morally approved excellence to achieve flourishing. According to Vaughn, the virtues taken into consideration can be divided into two categories: self-regarding and other-regarding. The main feature of this practice lies in its core concept of development being a fundamentally moral process. Kants theory of business ethics deals with the need of the human being to respond to the moral needs firstly without any second thought. If there is a need to do something that is moral an immediate moral requirement then the individual should look no further and do the duty. Kant believed that human beings are blessed to have a rational thought system and they should use it to the greater extent because no other being in the world has that ability (Bowie, 2017). Kants idea of categorical imperative is something that he refers to as universal law. For all human beings the categorical imperative has to be the same so that people respond morally to the requirements that arise in their immediate surroundings (Kant, 2014). The decision making process of the managers must be inclined towards the idea of categorical imperative. People should not be treated as resources that will help in meeting the ultimate goal, a morally healthy bond and thinking has to be kept so that people do not lose their trust on the organization and they do not further feel being only used for the advantage of the company. The critics have argued that whether the categorical imperative will always lead to the betterment of the company is a huge question that can never be answered with any surety. A person being used as means is a concept that is under the scanner to get a better idea that what Kant actually meant by this use that he refers to. Ethics of care is an approach that is distinctive to moral theory that gives importance to responsibility, relationship and concern unlike the utilitarianism or the deontologism (Barnes, Conradi Vosman, 2015). This concept is relevant for people who care for other individuals and are so much eager to be of help that they can even break rules and ethics just to be morally correct. The ethics of care theory questions that whether the justice is being conveyed correctly to the person along with ensuring equality. This thought and ethical practice has emotions attached to it, as the person thinks himself in place of the sufferer and takes the decision based on the emotional impulse that comes in the mind (Muhtadie et al., 2014). The suffering of any person is not to be withstood by those who follow this theory in their business practice. However, the critics have rightly pointed that such a thought will restrict an individual from thinking rationally in situations that may be extremely emotional in nature. Individuals with emotional mindset may indulge in taking regular wrong decisions due to the constant emotional pressure put on them. It can be the a weak point that will be regularly used by people to get their task done by the person. Proper application and understanding the actual need to use the theory ultimately depends on the person who will take the decision. Application of ethical theories Corporate governance and the ethics that are related to it are the most important part of organizations sustainability in the market. A breach in these ethics can lead to serious consequences on part of the organizations overall image and position in the market. Below listed are two recent case studies that prove the above statement. Bernard Madoff Bernerd Madoff was the CEO of Bernard L. Madoff Investment Securities. The company was popular among people at a time for providing high returns on the investments that would be made in it. The rates of return were very consistent and high. People started realizing that this entire money making scheme may be part of Madoffs greater plan of running a Ponzi scheme amidst the people (Ponzi, 2015). The level of assurance for the unrealistic returns that the investments were paying was something that raised many eye brows and lead to many investigations by the Securities and Exchange Commission (SEC). The competitors in the market were alarmed by such rates of return that were nowhere close to what was being prevalent in the regular market scenario. It was furthermore discovered that fake trading was being practiced on Madoffs name to generate money to refund to the people who were investing in the scheme. The trading was doubted to be taking place through an independent third party and n ot directly on Madoffs name (West, 2017). As the investigations progressed, SEC could not find sufficient evidence to show that Madoff was running a ponzi fraud and this lead Madoff to using this clean image to popularize his investment schemes more. The stunt allowed him to add credibility to his investment ideas and he presented those in a way that everyone realized that the schemes were good and had nothing wrong about them because the SEC could not find anything. On part of the SEC it can be seen that they did not indulge into the deeper aspects of this case to find out the actual ponzy scheme that was being operated by Madoff to gain profit for the investments. Madoff was an egoist person to the core and only thought about achieving wealth and creating a huge image in the market as someone who could sense the financial trends in the market. His ideas are consequentialist in nature and follow the lines of egoism closely to achieve faith in the market and create an image of dependability. He was also held responsible for mishandling huge amounts of money of investors for personal benefit. For him nothing ever existed than his happiness and financial greed. Being an agent of the company and dealing with the moral and immoral practices in and out of the company, Bernard Madoff was completely immoral and had no wish to work for the betterment of the company (Monaghan OFlynn, 2017). Breaking the ethics lead to massive debacle in the company image and the company had to finally come down in front of the law. Dismissing the non-consequentialist idea that was propounded by the greatest minds like Kant leads to many levels of imbalance in the entire work process. The agency managers should learn and follow the non-consequential theories that enable a greater sustainability to the organization. The morality of the company should remain same in every situation and the requirements of others should be seen as the foremost concern when it comes to taking decisions. It is not always the case that taking a consequentialist decision or strategy leads to loss but when personal motives are imbibed then it leads to devastating outcomes such as the case of Bernard Madoff (Baron, Zhao Miao, 2015). Bernard Ebber (WorldCom fraud) The WorldCom fraud was one of the biggest public accounting fraud in the history of global corporate. There was found more than $11 billion of fraudulent entries in the accounts of WorldCom. The fraud amount was so huge that it made up about 29% of the annual revenue for the year 2002 (Wisner Brown, 2015). The fraud was a joint action by the top-level accountant and managers of the WorldCom and the person heading this fraud was Bernard Ebbers, the CEO of WorldCom. The organizational control was weak that allowed such fraud to happen inside the company and as because it was a top-level conspiracy, nobody from the organization even tried to whistle blow the entire thing out in public. The company started schemes that reversed allowances to the customers and this allowance was without any strong justification. The motive for such a huge fraud had two intentions Corporate and Personal. The company had a down and degrading economical situation, they were nowhere near meeting the Wall St reet expectation from them, and to hide these discrepancies they came up with the idea to fraud the financial reports that became their corporate motive. On the other hand, the personal motive included the enrichment of personal wealth and power with the use of corporate assets. According to Gottschalk, Bernard Ebbers pursued power and advancements in the professional career and for that purpose; he manipulated the numbers largely in the financial reports. Ebbers filled up the expenses of the company as its investments, which lead to inflated figures in the profit of WorldCom (Kashyap, 2017). The inflated figures allowed the company to gain a heightened status in the market and impressed everyone with such a huge growth in their economics. Bernard gimmicked the finances to prove that the company was speeding to victorious growth whereas the truth was something else and WorldCom was deteriorating every passing day in its financial aspects. The image of a company rests on the shoulder of those who are at the position of creating a better company profile in the market. The company has a face that earns trust from those in the market. It takes years to build the relationship that enables a company to work with profit and popularity in the industry it is catering. The public relations of the company maintains this image but the top level officials are the actual face representatives of the large companies that exist in the business. Bernard Ebbers was in such a position for the WorldCom and his extensive misuse of the power led to the complete abolition of the company from the market as people lost faith in it. Being egoist in nature, Ebbers only pursued his self-interest and the motive was extremely selfish in the decisions he took for the company. The consequences were not aligned to the needs of the people associated with the company and this immoral approach ultimately lead to the fall of WorldCom. The lack of transpar ency in the organizational structure leads to the prevalence of the misconduct inside the company. No one even raised a voice against the practice and the fact was that people were not even aware of the practice that was going on constantly in the company. Every member should be well communicated with the company in entirety; Ebbers intentionally weakened the internal communication so that people were mostly left in dark about the fraud in accounts. The lack of ethical constraints on the part of Ebbers was clear because he did not care what others will go through due to the steps he were taking in pursing his own goal and the greater good of the company was being led down. Conclusion The corporate governance allows for a better functioning of the entire organization and it is further ensured by the use of ethics that are necessary to ensure a proper functioning of the system in a moral direction. Both the cases that were studied in the report give an idea that when the codes of ethics are broken, the corporate governance is pushed to negligence the entire organization suffers from losses, and a complete disruption in the work system occurs. Both the Bernards were found chasing their own accomplishments and this pursuance of self-interest led them to taking resort to many unethical practices that completely devastated the company image in the market. Bernard Madoff and Bernard Ebbers were both egoist in nature and they were personal egoist. While we see that Madoff was providing out successful returns to his investors that made him impersonal to certain extent but for the larger part he is found to be a personal egoist because he wanted to establish his image as s omeone who is blessed with the understanding of the investment market. Bernard Ebbers on the other hand is an absolute personal egoist and he only manipulated the figures in WorldCom reports to show that he was superior than others in the trade and people would consider him a successful CEO of the company because he attained such huge growth. The motive was to meet the expectation of the Wall Street but the way taken to meet the expectation was unethical inflation of the profit figures in the accounts of WorldCom. This was done without keeping in mind any future aspect of the practiced manipulation, Ebbers was blinded by the greed to increase wealth and gain more power in the industry. What ensued as a result was the fall of WorldCom from being one of the most successful telecom companies to being reputed as a company that lead recorded one of the biggest financial frauds in America and the entire corporate globe. To conclude it is evident that malpractice and ignorance towards main taining transparency in the corporate governance and misconduct of the business can lead to complete destruction of a companys image and position in the market. Pursuance of personal interest does lead to extensive loss to the company in totality and should be avoided at any cost. The egoism theory is something that should not be always regarded as negative; both the cases show an egoist approach of the agency manager towards the working style and target of the company being aligned to personal targets and fulfillments. It is to be noted that there are more people around the globe with a egoist approach and in those cases the personal interest is directly aligned to the betterment of the company in totality and hence leads to better consequences after their successful implications. Reference Barnes, M., Conradi, E., Vosman, F. (2015). Deliberation and Transformation from the Ethics of Care. Baron, R. A., Zhao, H., Miao, Q. (2015). Personal motives, moral disengagement, and unethical decisions by entrepreneurs: Cognitive mechanisms on the slippery slope.Journal of Business Ethics,128(1), 107-118. Bell, G. G., Dyck, B., Neubert, M. J. (2017). ETHICAL LEADERSHIP, VIRTUE THEORY, AND GENERIC STRATEGIES.Radical Thoughts on Ethical Leadership, 113. Berry, J. M., Wilcox, C. (2015).The interest group society. Routledge. Bowie, N. E. (2017).Business ethics: A Kantian perspective. Cambridge University Press. Broad, C. D. (2014).Five types of ethical theory(Vol. 2). Routledge. Carlson, E. (2013).Consequentialism reconsidered(Vol. 20). Springer Science Business Media. Glinkowska, B. (2017). Qualities of manager-leader of the near futureresults of the research.Management,21(1). Goldman, A. I. (2015).Theory of human action. Princeton University Press. Gottschalk, P. (2018). Sample of US Investigation Reports. InInvestigating White-Collar Crime(pp. 95-119). Springer, Cham. Harris, J. (2013). Ethics is for bad guys!Putting the moralinto moral enhancement.Bioethics,27(3), 169-173. Kant, I. (2014). The Good Will and the Categorical Imperative.The Ethical Life: Fundamental Readings in Ethics and Moral Problems, 87-99. Kashyap, R. (2017). How World-Com Pulled a World-Con? Finding Facts within Fiction!!!(Presentation Slides). MacDonald, J. B. (2015). Analyzing the Effects of Egoist and Utilitarian Evaluations on Subjects Responses to (Un) ethical Salesperson Behavior. InProceedings of the 2000 Academy of Marketing Science (AMS) Annual Conference(pp. 282-287). Springer, Cham. Melden, A. (2013).Ethical theories. Read Books Ltd. Monaghan, L. F., O'Flynn, M. (2017). The Madoffization of Irish society: from Ponzi finance to sociological critique.The British journal of sociology,68(4), 670-692. Muhtadie, L., Johnson, S. L., Carver, C. S., Gotlib, I. H., Ketter, T. A. (2014). A profile approach to impulsivity in bipolar disorder: the key role of strong emotions.Acta Psychiatrica Scandinavica,129(2), 100-108. Neher, W., Sandin, P. (2015).Communicating ethically. Routledge. Ponzi, A. G. M. S. (2015). Scheme in Eastern Europe. Salmieri, G. (2015). Egoism and Altruism.A Companion to Ayn Rand, 130. Tricker, R. B., Tricker, R. I. (2015).Corporate governance: Principles, policies, and practices. Oxford University Press, USA. Vaughn, L. (2015).Doing ethics: Moral reasoning and contemporary issues. WW Norton Company. West, J. (2017). The Dialogues of Bernie Madoff's Ponzi Fraud: An Exploration of the Discourses of Greed, Cliques, Peer Pressure, and Error.International Journal of Semiotics and Visual Rhetoric (IJSVR),1(1), 47-55. Wisner, D. L., Brown, B. A. (2015). Corporate Toxicity: The WorldCom/MCI Scandal.