Ethics and Business Hierarchy

Which incident has a greater negative impact on an organization: an unethical act performed by an hourly worker or the same act performed by a senior manager of the organization?

One could approach the issue from a consequentialist perspective.  To do so, one would first, like Bentham, argue that the goal would be to maximize net well-being and minimize net ill-being.  From there, one would try to understand which unethical act committed by different actors in a company might have the greatest impact on net well-being or net ill-being.

India’s Satyam scandal might be a good place to start for such an analysis.  Here, we can compare the possible effects of a single lie: overstating company assets by about $1 billion.

At the time of the scandal, Satyam employed roughly 50,000 people.  By advancing this lie, the senior manager stood to keep many people employed and possibly improve the overall well-being of those people.  However, he was also essentially gambling with those people’s lives without their consent.  If his lie were to be uncovered, those 50,000 people (and their familes) might face layoffs and subsequent financial hardships that would likely have severe negative effects on their well-being.

If, on the other hand, a secretary were to tell the same lie, not only would no one likely listen, but the person could easily be reprimanded with negative impacts only on that person’s well-being and perhaps a few others.

The consequences of the unethical behavior clearly vary starkly.  If one were to maintain a consistent consequentialist position when meting out punishment, one could easily conclude that the two people should be punished differently and with respect to the potential or actual impact of their unethical behavior.

Collard, D. (2006). Research on well-being: Some advice from Jeremy Bentham. Philosophy of the Social Sciences, 36(3), 330-354. Retrieved from: http://www.utilitarianism.net/bentham/about/200609–.pdf
Winkler, D. (2010). India’s Satyam accounting scandal. University of Iowa College of Law Center for International Finance and Development. Retrieved from: http://blogs.law.uiowa.edu/ebook/sites/default/files/India-%20Briefing%20paper_0.pdf