USAA and Shake Shack Ethical Issues

Introduction

To a large extent, the way businesses conduct their affairs is governed by a certain set of standards or principles. As commercial entities, businesses should not only be driven by the need to rake in profits. Instead, they should be aware of their responsibilities to a wide range of stakeholders including, but not limited to; employees, customers, suppliers, regulatory agencies, as well as competitors. This is more so the case given that in some scenarios, some actions could be perfectly legal, but unethical or injurious to the wellbeing of a certain stakeholder. This text concerns itself with a number of ethical issues relating to two entities, i.e. USAA and Shake Shack. In so doing, it will take into consideration the implications that the decisions made by the two entities had on stakeholders and how the said actions could be viewed from both a Kantian and Utilitarian perspective.

Ethical Issues

From the onset, it would be prudent to note that the COVID-19 pandemic has affected individuals and businesses in diverse ways. Due to the challenging times that most people have been going through as a consequence of loss of livelihood, the U.S. Congress deemed it fit to structure a stimulus package to cushion the most vulnerable. This was the intention of the funds that were deposited into the checking accounts of USAA members. However, USAA went ahead to offset the negative balances that some of the accounts belonging to members reflected. Thus, effectively, the conclusion that could be arrived at on this front is that some funds did not reach those in dire need of the same. As a matter of fact, USAA could be viewed as being insensitive to the plight of its members.

On the other hand, when it comes to Shake Shack, it should be noted that with a market capitalization of $2.06 billion and by virtue of being listed in the NYSE, the organization cannot be considered a small business. However, the enterprise still went ahead and used the provisions for accessing the PPP funds to its advantage. Further, it is likely that a significant chunk of the loan was used for executive compensation owing to the fact that the companys Chief Executive Officer had received total compensation of $2.3 million in 2019. In taking up the loan, Shake Shack effectively denied other more vulnerable and needful enterprises funds to cushion their employees from the harmful effects of the pandemic. This is more so the case given that PPP depleted its funds shortly after the company received a $10 million loan.

Stakeholders Implications

In essence, stakeholders could in this context be described as all those who were impacted upon, or had an interest in the decisions that the two organizations highlighted above made.

a) USAA

Some of the key stakeholders in the case of USAA were; USAA members (i.e. those who maintained checking accounts with the organization), employees of the organization, top officers of the firm (i.e. top decision makers), and the U.S. government. The implication for each stakeholder group identified above has been highlighted below;

1. USAA members (i.e. those who maintained checking accounts with the organization): While there are some who received the stimulus money (i.e. those without a negative balance in their checking accounts), some only received a share of the same, while other did not receive anything...…Utilitarian ideals were, thus, not deployed.

Recommended Actions

In both instances, the decision makers ought to have strived to be virtuous. My assertion is largely inclined towards virtue ethics. One of the paths towards being a virtuous person is exercising good judgment (CrashCourse, 2016). In both scenarios, good judgment would have revealed to the decision makers that their course of action was wrong. Generally, human beings have compassion and desire to help others in various problems. According to Brusseau (2014), there are no hard principles or rules to be followed or adhered to in virtue ethics. This is the right approach to embrace owing to the fact that life is largely uncertain and different situations will call for different ways of thinking. In both instances, the key players ought to have been overwhelmed by the desire to respond to the plight of those most hit by the pandemic. With regard to USAA for instance, the organization would have avoided making the deductions at this point and waited until members had adjusted to the adverse effects of the global pandemic. On the other hand, in the case of Shake Shack, the best course of action would have been to seek other avenues to access funds (i.e. by issuing bonds or slashing executive compensation). This would have made it possible for small businesses without such flexibility to benefit from the loan.

Conclusion

In the final analysis, it is clear that the two organizations described above acted in a manner that cannot be described as upright from a moral point of view. Businesses ought to be mindful of, and responsive to the needs of various stakeholders. The application of various ethical and moral…