BUSINESS THEORY – THOUGHT EXPERIMENT USING UTIL

Nancy is a manager for XYZ Company, a firm that offers marketing services to companies worldwide. She attends a conference where she talks to Alice, the director of sales for one of XYZ’s competitors. Alice is intoxicated and discloses that she feels her company has discriminated repeatedly against her.. Alice says that her company keeps hiring men with lesser education, experience, and overall qualifications for jobs at a higher level than hers, and the men are paid more. She feels she is a token for a company dominated by men.

Alice gives Nancy her company’s Marketing Plan for the next fiscal year. (Nancy  (Alice) pretends that she lost the document but intended it to be given to Nancy. Alice took the document from her company and is giving away the document without permission of her company. Nancy leaves the table taking the plan but refrains from reading it.

Ethical Issue

What should Nancy do with the competitor’s plan she obtained from Alice at the conference? Should she use the information to her business advantage or should she not use the information?

Analysis

Utilitarianism states that when an ethical dilemma exists, the ethical choice is the choice that offers the greatest good for the greatest number of people.[i] According to this theory, the action Alice should take is the action that results in the greatest amount of good for the greatest amount of stakeholders.

Stakeholders

The stakeholders in Alice’s decision are Nancy herself, Nancy’s Company and its shareholders, Alice, XYZ Company and its stakeholders, and the general public, including customers of both companies.

Consequences to Stakeholders

If Nancy decided to use the information for the benefit of herself and XYZ Company, she could benefit, as the material would give her valuable insight into the competing company. Nancy’s ability to predict the actions of a competitor to XYZ Company could prompt promotions in reward for her market insight. She could be hurt if her possession of stolen materials became widely known or, in the worst case, she could be fired and face fines and/or jail time for the use of stolen material.

XYZ Company and its stakeholders could benefit if Nancy decided to use the information, as the company could win clients from Alice’s Company with Alice’s information. XYZ Company would benefit as the company could steal strategies from Alice’s Company. But,  XYZ Company could suffer negative coverage if the use of stolen materials became widely known. In the worst case, XYZ Company could lose clients or even face fines as a result of Nancy’s decision. 

If Nancy used the information to the benefit of XYZ Company, Alice could benefit from the satisfaction that she is punishing a company that she believes is disadvantaging women. But consequently, she could be fired, sued, and/or panelized by the government for breaking her responsibility to her company and could face possible theft charges for taking the material without permission.

Alice’s Company could benefit long term if Nancy used the information to the benefit of XYZ Company, the use of the material was discovered, and then XYZ Company was hurt in the resulting scandal. But in the short term, Alice’s Company’s stakeholders would likely be hurt as the XYZ Company could steal customers and strategies.  A probable consequence is that XYZ Company would be in a position to obtain clients from Alice’s Company with the information Nancy gained from Alice.

If Nancy used the information to her advantage, the general public, including customers of both companies, would be hurt, as an increase in the distrust of business would be by-product of the corporate scandal. The customers of the consulting firms would be hurt in the scandal, as the customers could have their image tarnished as a result of hiring a dishonest marketing firm. In addition, the customers of the both marketing consulting firms would suffer costs associated with switching marketing companies.

Evaluation of Consequences

If Nancy did use the document acquired from Alice, Nancy could benefit in the form of the promotion but the risk is high. If Nancy did get fired as a result of the use of the material she obtained from Alice, the possible benefits of a promotion or praise would be undermined. Legal action against Nancy would also undermine the possible benefits as  any promotion or praise would be meaningless if she was serving time for her crime.

XYZ Company could benefit in the improvement in market positions if Nancy used the material, but the risk is too high, as the negative consequences would undo any benefits for XYZ Company. The focus on short term importance of market position, acquiring competitor’s strategies, and gaining customers could have drawbacks that would hurt XYZ long term. The possibility of the use of the stolen material being discovered is high enough that the consequences of negative press, lost clients, and fines outweigh the possible benefits.

Alice would get the satisfaction of hurting her company which she believes is unfairly disadvantaging women, but her satisfaction might be less than she originally perceived if she was not intoxicated. The possibility of being fired and having legal repercussions, such as fines or jail time, are worse than her intoxicated satisfaction of attempting to harm her company.

While there is a chance Alice’s Company could benefit if XYZ found them in a legal/ethical scandal, the immediate harms could inflict substantial damage to the company. The immediate harm could be the loss of critical strategies and customers if XYZ Company discovered their marketing strategy as a result of Nancy using the information gained from Alice.

If Nancy uses the material, the general public would be hurt, including customers of both companies. There would be an increase in the distrust of business, customers could have their image tarnished(?), and customers of the marketing firms would lose time and money. Nothing beneficial could arise for the general public if Nancy uses the information she received from Alice.

As an alternative to using the information, Nancy could destroy and not use the document acquired from Alice. While Nancy would have to forgo the benefits of using the document to her advantage, she would forgo the risk of suffering consequences from using the documents. Given that the possible negative consequences of the results would undermined any possible benefits and be a net harm to practically all stakeholders, the principle of utilitarianism dictates that Nancy should not use the document acquired from Alice.

Conclusion/Recommendation

Using utilitarianism as the means to resolve the ethical dilemma, Nancy should destroy and not use the document acquired from Alice, as the negative consequences to the majority of all stakeholders involved are greater than the benefits.

[i] Business Ethics: A Real World Approach, Andrew Ghillyer, McGraw/Hill/Irvin, 2008, page 9.