Introduction
Companies often face challenging situations or moral dilemmas and make decisions that do not benefit everyone. Firms must consider the laws and refer to some ethical principles outlined by different theories. This paper reviews the components and stakeholders of a specific business scenario to apply the concepts of R. Edward Freeman’s stakeholder theory and the ethical teachings of consequentialism.
Scenario
Rmblppy, a social media company, was asked by the U.S. government to share user data for national security purposes, despite having no legal requirement to do so. The company must weigh the ethical implications of protecting customer privacy against the potential benefits of enhanced public safety, while also considering how the decision could affect public trust, reputation, and financial performance.
Relationships Between the Issue’s Elements
The moral concern identified in the business scenario contains several vital elements that require careful consideration. These components are interrelated, and the company needs to decide which is more critical and can be used primarily for decision-making. Firstly, as a social media firm, Rmblppy must provide complete privacy and security for the user data it collects and stores. It promises its users what they expect when they register, provides access to their private information, and then uses the company’s services. In other words, this data privacy provision is the basis of trust between Rmblppy and its customers.
The other component is the U.S. government’s request to access some personal information about Rmblppy’s customers to ensure greater national security in the future. The connection between these two components is that the trust and safety of customers and people worldwide can be undermined or strengthened. This concern is a primary aspect of consequentialism as an ethical theory(Wilkens, 2011). Therefore, when evaluating this relationship between the elements, one should focus on the general outcomes that are expected in the future.
The Primary Interests of Stakeholders
It is possible to identify four stakeholders in the scenario and analyze the relationships among their key interests. Firstly, the firm is a stakeholder in the ethical dilemma because it must make a decision and might suffer or benefit from the consequences, thereby affecting other stakeholders. Some primary purposes of Rmblppy are to maintain its good market share, image, and clients’ trust. However, it is also interested in ensuring the safety of others worldwide and in supporting the government of the country in which it operates.
The second stakeholder, Rmblppy’s customers, would probably be more satisfied if their data remained private and secure. Still, one might also state that most would be pleased to know that national security investigations have become more effective.
Thirdly, the U.S. government initiates the ethical dilemma, meaning another stakeholder is involved. The country’s authorities want to secure their operations, enhance efficiency, and ensure the safety of all citizens and others worldwide. Therefore, they require the data and highly depend on Rmblppy’s decision.
Eventually, individuals who are not the company’s customers can also be considered stakeholders as they are interested in the U.S. government’s productivity in national security investigations. These connections between the key players in the situation indicate that Rmblppy and its clients might positively or negatively impact one another. To be more precise, it depends on the firm’s decision and the general tendency among users as to whether the latter’s privacy matters more than the security of others.
Applying R. Edward Freeman’s Stakeholder Theory
To address the ethical scenario and ensure the final decision is as moral as possible, one can refer to R. Edward Freeman’s shareholder theory. According to researchers, this American business ethicist “says that firms should be managed to balance the interests of all stakeholders” (Moriarty, 2021, p. 184). Noticeably, this theory states that “on the wide definition, a stakeholder is anyone who can affect the corporation or who can be affected by the corporation” (Moriarty, 2021, p. 191). In most cases, it is more essential to consider how all these groups can benefit or suffer from a company’s decision, making the focus on profit less critical.
When applying this theory, one may argue that providing the government with the requested information maximizes the benefits for most stakeholders in the issue. If critics, society, and customers accept such a decision, everyone will be satisfied. However, users and communities may not appreciate this step. In that case, the company will be the only party to suffer, while customers and the public will be better protected.
Although stakeholders in the narrow sense, such as employees, suppliers, and others, will be negatively affected by the firm’s image and market share decreasing, all other parties in the dilemma will be positively impacted. Therefore, “these benefits may be enough to counterbalance the costs to shareholders” (Moriarty, 2021, p. 192). A gap in the theory concerns the poorly explained need to choose which stakeholders to consider in the first place, which might affect decision-making. However, since this theory does not focus on corporate social responsibility, one can say that any choice that benefits the majority is ethical.
Applying a Traditional Theory of Normative Ethics
Finally, ethical theories of consequentialism can also help solve the situation and ensure that most individuals are satisfied with the outcomes. As researchers have noticed, utilitarianism is one of the central theories in consequentialism. It states that “actions are right in proportion as they tend to promote overall human happiness” (Schefczyk, n.d., para. 1).
This theory has a specific disadvantage: it requires choosing between “focus on minimizing the number of bad lives or on maximizing the number of good lives.” This need means that overall human satisfaction cannot be achieved (Schefczyk, n.d., para. 11). However, if the goal is to maximize positive experiences, this theory recommends that Rmblppy provide the government with the requested data (Wilkens, 2011). This decision will make it easier and more effective for the authorities to conduct national security investigations and enhance the safety of many people’s private data. Consequently, even though some persons may be dissatisfied, the majority will benefit from the decision.
Conclusion
To conclude, Rmblppy is in a challenging situation, but it can be solved positively if a proper ethical theory is applied. Firstly, all components of the scenario are interconnected and affect each other. These elements are the need for the organization to protect its customers’ privacy and simultaneously care for other people, and the government’s responsibility to obtain information that leads to improved national security investigations. The scenario involves four stakeholders: Rmblppy, its customers, all other people, and the U.S. government, each with their own interests. Finally, both utilitarianism and R. Edward Freeman’s stakeholder theory hold that the firm must provide authorities with the data needed to benefit the majority.
References
Moriarty, J. (2021). Business ethics: A contemporary introduction. Taylor & Francis Group.
Schefczyk, M. (n.d.). John Stuart Mill: Ethics. Internet Encyclopedia of Philosophy.
Wilkens, S. (2011). Beyond bumper sticker ethics: An introduction to theories of right and wrong. InterVarsity Press.