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Meaghan Lynch Business Ethics Dr.

Barton Term Paper: An Ethical Dilemma November 27, 2012

Importance of Society Interests in Business-Government Relations Within the constraints of business and government relations, corporations must adhere to a large amount of social responsibility in order to prevent involvement in unethical decisions. In decisions to advance individual success, Costa and Dionisis act on self-interested decisions rather than the interest of society. Using the fundamental rights of rights-based ethics, a sense a reason and coherency in the dilemma can be achieved. Two main situations presented in Ethical Dilemma 11 are unethical on the basis of rightsbased ethics as the ownership of private property of society supersedes the ownership of private property of the business owners. Although Costa and Dionisis are unethical in two of their decisions, one harmless decision, similar to the practice of lobbying, is considered acceptable and used ethically under the Fundamental Rights. According to the rights-based theory an individual must, act only according to the maxim by which you can at the same time will that it should become a universal law (Crane and Matten, 2010, p.105). Similar to the golden rule, the theory examines whether a rule can be used universally. In the case with Costa and Dionisis, two ethical dilemmas are violations to society and therefore, if the situations were to be made universal, the entire community and economy would ultimately suffer. The act of discussing governmental insider information to a business owner and of participating in bribes that are a form of corruption is ethically wrong according to Kants right-based theory. In the close relationship between mayor, Dionisis, and business owner, Costa, governmental insider information is leaked to the business owner, therefore, giving him an advantage over other business owners. The main dilemma does not appear based on the gradual success of a business owner, but instead, of the government officials choice

to completely disregard society in an effort to help out a friend. Crane and Matten (2010, p.498) suggests that, government is entrusted with the responsibility to act in societys best interests. As Dionisis discusses with Costa information that will lead him in the right direction with his business, he is violating societies right to ownership of property. Even though the business owner has the right to ownership of property as well, he is making a decision based on governments insider information, which directly affects society. Therefore, the ownership of property of society supersedes the ownership of property of Costa. It is unethical for Dionisis and Costa to discuss business decisions because government actions must reflect the interests of society or the actions must be given consent by society. The society has the right to vote for government officials, therefore the elected officials are responsible to protect and act on the rights of society. In Dionisis and Costas relationship, Dionisis is unable to fulfill his obligation to society. In government regulations, there is also a question of legitimacy of business influence on government and the problem of accountability. If the business owner prevents the government official from carrying out his duty to society, than business is considered illegitimate. Following business legitimacy, the term accountability, that gives the public a right to be informed about governmental decisions with other constituencies, (Crane and Matten, 2010, p.499) is also never applied. For the scenario between Dionisis and Costa, society is ignored in the decisions directly affecting them; therefore, the question of legitimacy of business and aspect of accountability confirms that the work-related discussions between the business owner and mayor are unethical. Another major dilemma between Dionisis and Costa is the situation of Costa building a swimming pool for Dionisis. The purpose of building the swimming pool for

Dionisis is not to feel the satisfaction of lending a hand to a friend or giving an incredible birthday present. In Costas perception of the situation, the main purpose is to gain more contracts for his business with the help of Dionisis. Since there is a bribe in place, the act of Costa buying an influence on government rule is a form of corruption. Corruption is the abuse of entrusted power for private gain (Crane and Matten, 2010, p.509). As the act of corruption occurs between a business owner and government official, society ultimately suffers. If these government-business bribes were considered acceptable, the economy would consist of a wide gap between the rich and the poor. The only individuals surviving in the market would be large corporations who would be completely unproductive relying on others to give them insider information. Again, although there is the ownership of private property of the business owner in his decision to build the swimming pool, the ownership of property of society is more important in the hierarchy of rights considering it is so detrimental to the economy. Although the case study presents two unethical decisions, it also provides a situation similar to the act of lobbying which is considered ethical. It differs from a bribe because it is more regulated form. Lobbyists present their opinion and make an effort to convince politicians using votes and public opinion, as opposed to using a form of trade to bribe the politician. Lobbying is defined as, A direct, usually private, attempt by business actors to influence governmental decision-making through information provision and persuasion (Crane and Matten, 2010, p.504). Instead of individuals involved in bribery, they are simply presenting their viewpoints and expressing their right to freedom of speech. Some lobbyists resort to unethical actions such as bribery, when their actions involve the exchange of money or trade, but in this case, it is similar to the

heavily regulated form of lobbying. In the dilemma, Costa is taking over the entire catering for 200 people including drinks as a birthday present for his friend. Considering there is not compensation or trade existing from this birthday present, the act does not demand anything or provide any motives. The key distinguishing feature of lobbying is that it is essentially a persuasive attempt by business to influence legislators through providing information rather than explicit pressure (Crane and Matten, 2010, p.504). This quote explains that the persuasion and influence of the lobbyists are used in the information they provide rather than in the increasing pressure to act. The massive birthday present from Costa to Dionisis is simply a nice gesture, unrelated to any business deal and completely ethical. In addition to the similarity of the birthday present and the practice of lobbying, the situation can also be ethical in the fact that society is unharmed in the action. In the other unprincipled situations, society is at a disadvantage in decision-making because Dionisis and Costa planned ahead to make decisions in their own favors. But in this case, Costa is providing Dionisis with a favor that is not reciprocated. In the decision to cater for 200 people, society is unaffected. The ownership of private property of Costa is the only factor being affected which he has control over because he owns the money provided for the party. In the relation between business owners and government officials, certain regulations must be more closely examined. The relationship between the two parties does not have to be cut off completely, but if it interferes with the interests of society, it is violating the ownership of private property of the society. In these violations the ends do

not justify the means, and the action is unacceptable according to the fundamental rights of rights-based ethics and standard government regulations.

References Crane, A and Matten, D (2010). Business Ethics. 3rd ed. New York: Oxford Press University Press. p491-543.