Business Ethics When the Truth Takes a Stretching Class

Maria Bailey clearly and blatantly misrepresented the size of her start-up business, but shrugged it off saying she knew what she was "capable of doing" and just wanted to show potential clients "what we were going to be," rather than tell them the truth about how fledgling her business actually was at that time.

Was it immoral for Mary Bailey to misrepresent her company?

Looking at the "consequential" side of her decision to fudge the truth about her company, moral decisions are made based upon what the consequences of the action will be. The results of her action actually could have several consequences. The one first and pivotal consequence Maria hopes will happen, of course, is that the fact of her deciding to embellish the truth about the size of her company will bring potential customers into her business start-up Web site fold, and soon she'll actually need the staff she now says she has on hand. If it happens fast enough for her, she'll be able to seamlessly and quickly move from a small, one-woman start-up into a flourishing company with several staff members handling several departments, and no one will ever know she lied at the outset.

According to the consequential view of happiness, if Maria is aiming at happiness for herself alone, she is an "ethical egoist" because she is only thinking of herself, not of her customers and potential customers who may not receive the excellent service they expect from her - because she is under-staffed and self-centered.

Aristotle's view of happiness (Module 1 Case) comes into play for Maria, because actually she is looking down the road at the "final good" that will come for her company, if she can grow it quickly enough to avoid someone noticing that she used fake email addresses and dropped names of executives from the likes of Blockbuster and Alamo - when in fact, she did not have those legitimate associations at all.

Utilitarianism fits within the consequentialist theory, and in utilitarianism, one's actions are correct if that action "maximizes happiness for the greatest number of people." Making a moral choice for Maria meant maximizing the possibilities of her own happiness, but she rationalized that since she didn't promise anything she could not deliver, she was justified in the fudging of the truth. "I never put myself in a position of taking whatever I could get," she states. But isn't that in fact what she is doing? She is taking customer money based on their belief that she has more power to deliver the goods than she really has at hand.

Did Maria do a "cost-benefit analysis" of her business, and her phony marketing, to determine if human happiness would be achieved by all involved - Maria, her family, and her customers?

Meanwhile, the definition of "deontology" (www.thefreedictionary.com) is "The science which relates to duty or moral obligation." Note, the definition begins with "the science," which takes deontological or deontology past a mere set of theories, and well into the realm of science.

Some helpful background into deontology, and this moral dilemma - and any morally confusing situation - may be found in The Philosophical Forum (Harvey, 2004). "Following [Immanuel] Kant, I assume that any deontological theory of ethics contains three sub-theories: 1) a theory of right action wherein acts are right or wrong independently of the consequences; 2) a theory or moral worth wherein the only acceptable motivating ethical concern is the intrinsic value of rightness itself, and 3) theory of the metaphysics of moral personhood wherein each moral agent bears intrinsic value and as such must be treated at all times with respect."

While examining the values (in the above paragraph) found in the writings of Immanuel Kant, it would seem quite appropriate to focus on an article relating Kant's "The Moral Law" (www.philosophypages.com),in which Kant states that "A good will is intrinsically good; its value is wholly self-contained and utterly independent of its external relations." From this perspective, can it be said that Maria had "good will" in her...

So, does she have good will in all matters of her duty to her start-up? Surely, she thinks she does, but she really doesn't. Her motives are driven by her perceived duty to herself, but one has to cast doubt on her action because she is inclined to believe she is justified in lying rather than being virtuous in her false presentation. This is according to the deontology as per Kant, and may be subject to cross-examination by other persons, but it seems to be one piece of the puzzle, in any event.
Meantime, STEP #1: Create a "for" and "against" column to determine how each person involved in Maria's start-up will be affected - hurt, or helped. On the "for" side: 1) Maria, if she succeeds; 2) Maria's family members who are counting on her as a bread-winner, if she succeeds; 3) Maria's customers, if she can deliver promised services.

On the "against" side: 1) Maria, if she is found out to be falsifying her staff and her consultant contacts such as Blockbuster; 2) Maria's family, if the start-up fails for any reason, including a failure to be able to deliver services; 3) Maria's customers, who will not get the services they were promised; 4) future start-ups, when publicity hits the newspapers and other media outlets that a start-up launched by a person who faked her company's resume; there will be more intense scrutiny on future start-ups because of Maria, just as there is now greater scrutiny on the resumes of college coaches, following the revelations in 2003-2004 that several coaches claimed things on their resumes that just were not true; 5) and, women in the future will be hurt, women who have courage and entrepreneurial ambitions and want to put down the cliche that Internet start-ups are a "man's world."

STEP #2: What rights are to be respected in Maria's case? No "human rights" will be violated - or have been violated - in the case of Maria's start-up. And as to "civil rights," if Maria is found to have made false statements and is guilty of false advertising (perhaps "fraud" is too extreme a term here), her civil rights will need to be protected because she likely could be sued, or at least there may be an attempt to prosecute her under SEC regulations or local laws which would be enforced by the District Attorney's office. In the event that she cannot afford an attorney, her "civil rights" are positive, because the state must provide her with one. Also, she has a right "to remain silent" in the event she is arrested, and that is a negative right.

Contractual rights" may come into play here, as Maria will no doubt have an agreement (explicit or strongly implied) with her customers that she promises to deliver the services and goods that are clearly spelled out in the advertising. There are well-enforced laws on the books of many states and jurisdictions protecting consumers from false advertising, and Maria's inability to deliver what she promises could fall into that category. She failed to live up to her agreements with customers, the duty of a business which offers services, so her customers have a right to sue, a positive right.

Step #3: Put it all together. In this case, Maria has a right to start a company, and she has an opportunity to say whatever she needs to say to encourage potential customers into accepting her as a legitimate business. She had an "opportunity" - but not a "right."

According to Kant, moral actions are "precisely those in which an individual agent's determination to act in accordance with duty overcomes her evident self-interest and obvious desire to do otherwise." Looking at that last sentence, Maria was determined to act in "accordance with duty," but her concept of "duty" was corrupt.

If the common denominator is the utilitarian view that "everyone's happiness is of equal value," and every action is good if it "creates more happiness than unhappiness," Maria could easily rationalize that all she is trying to do is create more happiness than unhappiness. But her actions, and her corrupt sense of "duty"…