Ethical dilemmas in business: legal, moral, and long-term perspectives

Ethical Dilemma

In the first scenario, the vice president of a beer company has been asked to organize a lobbying effort to reduce the drinking age to 18. From a strictly legal perspective, there is nothing wrong with this request. The company has the legal right to lobby government for legislative changes that it wants to see. Indeed, the Citizens United ruling expands the privilege of free speech in elections to all bodies, individual or corporate. From a legal perspective the company can organize such an effort and if it is successful will have achieved its objectives through legal channels.

The ethics of the issue are a little fuzzier. There are different ethical perspectives that can be used to analyze this issue. One perspective is the consequentialist perspective. A consequentialist looks to the outcomes of one's actions to determine the moral worth of those actions. The different outcomes here can be wide-ranging, and are largely uncertain. The company's efforts will have the following outcomes whether the lobbying is successful for not -- it will be a PR disaster. There are enough anti-alcohol groups and watchdogs that there is basically no way for the company to lobby in secret. These groups will waste no opportunity to vilify the company for undertaking this lobbying effort. Whether this demonization would have an effect on the revenues or profits of the company is not known, since many anti-alcohol groups consist of non-drinkers anyway.

The utilitarian perspective is a consequentialist point-of-view that holds that the ideal solution is the one that produces the greatest good for the greatest number. In this case, while the shareholders of the company would certainly get a short-term boost from a lower drinking age, this must be weighed against the effects on society at large. What those outcomes might be depends on who you ask -- certaintly the anti-alcohol groups will predict nothing short of apocalyptic mayhem. The real answer can actually be found by looking to other areas that have a dirnking age of 18 -- Louisiana, Quebec, South Africa and most of Europe. With a range of different cultures and societal approaches to alcohol to draw on, these regions will tell the story of what the outcome is most likely to be. With the possible exception of New Orleans, these areas are not generally subject to apocalyptic mayhem.

The deontological perspective holds that the ethics of an issue can be guided by a "categorical imperative," meanining that some choices cannot be justified by their effects, only by the rightness of the action. What defines a categorical imperative in this situation is open to interpretation. Certainly a Muslim would say that there is such an imperative and that it originates with God. Others would reject such an imperative. There is, in our society, no particular categorical imperative that would guide actions in this case, because of the separation of religion and state.

Morally, however, the laws in place for a reason. It is the prevailing view -- rightly or wrongly -- that people under the age of 21 are not capable of making responsible decisions concerning alcohol. Thus, the government has taken away that choice for them. This view tends to be guided more by religious sentiment than any empirical evidence, and indeed there is a wealth of evidence to support the idea that young adults respond better to legal access to alcohol than they do to clandestine consumption. There are more opportunities for supervision, for example, when youth are allowed to drink in public.

The most reasonable way to look at this issue is through the consequentialist lens, because governments are typicaly concerned with managing outcomes and the current drinking laws are dictated largely by the desire to manage outcomes. From the company's perspective, the shareholdres are only going to be served if the lobbying effort succeeds, and only for the short run. If the effort does not succeed, then the company is likely to be subject to backlash thar harms it..

Society at large is not likely to see any particular adverse outcomes. Evidence from places with a drinking age of 18 shows that there is no reason why young adults of that age cannot be allowed to consume beer. Indeed, in Eureop the countries with the biggest binge drinkning problems tend to be those with nanny-state policies like those in the United States . By making alcohol a forbidden fruit, its consumption is encouraged and worse yet this consumption must be clandestine. This is not a positive development, so lowering the drinking age to 18 might actually help to deal with the problems associated with binge drinking, contrary to what the anti-alcohol lobby has to say on the matter.

In areas where there is a strong moral sense -- places that are very religious, for example -- it could be argued that the actions of the brewery would be immoral, to the extent that those morals span the entire society. However, it is worth noting that the separation of church and state results in having those morals outside of the legal system. Society can wring its hands all it wants -- the laws should be based on facts and reason. Therefore, fi the likelihood of success is high, the greatest good for the greatest number of served by engaging in this lobbying effort.

Part II. In this scenario, the legal implications cannot be more clear. This is an illegal act that the boss is asking for. If this accounting practice that is being requested was part of GAAP, it would not be controversial. Any accounting practice in the preparation of financial statements that is not GAAP is not allowed by the SEC. That the real income will be reported to the IRS is not relevant, because it is fraud to report a false income to the SEC.