Business Ethics and Deontology Essay Example | Topics and Well Written Essays - 1000 words

Business Ethics and Deontology - Essay Example Business Ethics and Deontology Most businesses deal with problems and constraints instead of prime movers of ethical business. In this study, we are going to give a critical analysis of a business problem using deontological ethics as discussed below. Step 1, The three major ethical problems raised in the WorldCom case include, corporate strategy of growth through acquisition, use of loans to senior executives, threat to corporate governance created by chumminess and lack of arms length dealing. Step 2, Evaluating WorldCom’s ethical problems using the deontological framework. This framework entails undertaking of duties with the right motives. It is a philosophy developed by Immanuel Kant. His theory is considered deontological for reasons such as acting in the morally right way suggest that people act from duty and lastly Kant says that it is the motives of the person and not the consequences. Corporate strategy of growth through acquisition We have many models different kinds of governance in the world. T he difference comes due to the variety of capitalism in which they are formed. Liberal model tends to give priority to shareholders interest while the coordinated models recognizes other stakeholders interest such as workers, managers, customers, suppliers and community (Penrose, 2009.). Each model has an advantage. In view to WorldCom ethical, Bernie Ebbers who was considered to be colorful and likable had nothing to show after the collapse of WorldCom. Achieving position as a significant player in the telecommunication sector through the successful completion of 65 acquisitions was deontological. This is because only two of the acquired were significant. Total accumulated debt amounted to $41billion due to acquisitions. As Chief Executive Officer it was advisable to only make acquisitions of companies that were very significant at that particular time. This would have made the company free from the big debts the company has. As much as a business strategy was a success at that tim e with the continued rise in the stock market, the manager should not have used this as a driving tool for business to enable him purchase other companies. During this all process of mergers and acquisitions there was managerial challenges in two areas. That is management dealing with integrating new and old organizations. This evident when the British telecommunication corporation made a bid of $19 billion and there was a quick response of countering the offer by Ebber to $30. In addition to this, Ebber also agreed to assume $5billion in MCI debt making the deal $35. It is time consuming because of its involvement in planning and managerial attention. There is also a challenge in accounting for financial aspects in the acquisition e.g. accounting for assets, debts and goodwill. This process illustrates areas where management did not address well. For instance, Ebber was an indifferent executive who did not pay attention to operation details. A good example is the deterioration of c ustomer service and it was evident when a customer contacted customer service was discontinued incorrectly. The company was not up to the task of merging the different companies acquired. The effect of poor integration of acquired companies include little effort by management to develop a cooperative mindset among various units, closure of three important MCI services that helped in maintenance of network and opening twelve inefficient and duplicate centers.