Ethical Business Scenario Essay
Ethical Business Scenario
Chief Executive Officers (CEOs) in the U. S earn a hefty salary compared to CEO’s in Europe. They earn on a daily basis what an average worker would earn in a whole year. To some this is justified by the fact that they are talented and that the forces of demand and supply dictate they earn more. To others this is unfair as the employees who also contributed massively to the success of the company get very little in return. Again, European CEO’s earn three times lesser what the CEO’s in U. S earn despite their having similar qualification.
According to pay analysts the high salaries could have rose due imperfections in the market place. CEO salaries are determined by Board Committees, which fail to link performance with the salary awarded. This allows for great variance in the salary scales of workers. Consultancy firms that advice such committees on how much to pay the CEO are also a factor contributing to hefty CEO salaries. Hefty CEO salaries do not translate to better performance. The company shares could be declining due to customer dissatisfaction despite them spending so much money on CEO’s pay.
Workers pay remain very low even after the federal increment of the minimum wage however this is like a drop in the sea as when adjusted for inflation it is still 7% below where it was 10 years ago. On the contrary CEO’s pay has rose by 45% after being adjusted for inflation. The CEO’s also gain from many benefits from the companies they work for. Different philosophers have different views on ethical and justice issues. Aristotle was dissatisfied with unjust gain. He insisted on the importance of ethical behavior and shows that people with virtues have performance in whatever they partake.
Happiness is the spice of life and all human beings work to attain it. All actions are for a purpose or an end and people enhance tools needed to attain the goals they want in life. For instance a knife’s work is to cut and to cut better knives should be sharp. Peoples action should aim at making them better people and building their character. The essence of being human is the ability to reason. Virtues are classified into moral and intellectual moral virtues entail gentleness, liberty, truthfulness, wit and pride.
To him, a mean is appropriate, too much or a deficient should be discouraged. Barnes, 500) Justice is an important virtue to him and he classifies it into two; particular and general. Particular justice complements the general justice by not earning unjust gains from an act while general justice is being observant to virtues relating to people. Intellectual virtues include knowledge, wisdom, prudence and art and they distinguish people’s capabilities as people behave according to them. Gaining at the expense of others is unjust. Injustice is said to occur when someone gets too little of a good thing or too much of a bad thing. (Michael, 59)
Kant’s moral theory entails the ‘supreme principle of categorical imperative’ that entails the formula of universal law and of the end in itself. He says that man should “act in such a way that you always treat humanity in your own person or in the person of any other never simply as a means but always at …. the same time as an end”. All people act for a reason, which he calls ‘maxim’. (Alan, 66) To him maxims are more important and they should be pursued despite the harm or misery they cause on the process. People should just be cautious not to use others as mere means to an end but as ends in themselves.
Using someone as a mere means implies that the person’s consent is not sought. (Onora, 219) People can be used as mere means by deceiving them; using false pretenses or giving misleading account at their expense. Coercion can also be used in using people as means to an end. Justice, to Kant entails not acting on maxims that use others as mere means to an end. Duties performed should be beneficial even to the people used in attaining the goals. Kantian approach does not focus a lot on the outcomes of an act but on the intentions. Sometimes good intentions could result to bad results.
Human beings are rational beings with the ability to choose and plan and consequently should not be used as mere means in attaining happiness or goals in life. Kant emphasizes on cosmopolitan justice where justice is felt at a global level. His approach allows respect for human rights and also encourages cultural diversity. (Onora, 218) Sartre explains how we live in a society full of oppression and exploitation. He tries to create a responsible nation. People have different egos and should be controlled by their consciousness in doing their actions Sartre was an atheist who believed that God doesn’t exist.
He devotes concerns to emotion as a spontaneous activity of consciousness that is projected onto the real world. To him people use their free will in partaking their actions and this poses the danger of people not being ready to take responsibility for their deeds. Freedom should entail responsibility as only then can people’s living conditions be improved. Human dignity would be retained freedom. Freedom is therefore corporate social responsibility. The society is full of hostility of man towards his fellow men. Sartre coins Marxist theory and states that ‘man is nothing else but that which he makes of himself’.
The ultimate responsibilities of man are to first form himself then have social responsibility to help society. “Man can will nothing unless he has first understood that he must count no one but himself; that he is alone, abandoned on earth in the midst of his infinite responsibilities, without help, with no other aim than the one he sets himself, with no other destiny than the one he forges for himself on this earth” (Being Nothing 1943). Aristotle would see the high salaries of CEO as justified. This is because the CEO’s have established what they want in life and have worked hard to achieve it.
They may have acquired appropriate education and professional skills that is required in the demanding CEO Job. This can be seen as the sharpening of a knife used for cutting objects. The good pay rewards their hard work and they attain happiness, which is very vital in human beings life. CEO’s have moral virtues as they find pride in what they do using the liberal means. They do not unjustly gain as they have what it takes to be in the CEO’s position. Just like other human beings, the CEO’s can reason but can do it better no wonder they get such positions.
The workers should be challenged to improve on their skills to enable them become better people in society. However, Aristotle would consider CEO’s who earn hefty pay but fail to perform as being unjust. This could be attributed to the fact that the equilibrium or balance required between the good is not attained. Giving too much to the CEO’s and very little to the workers despite their hard work in itself a form of injustice. However, CEO’s can be justified with their hefty salaries because they have the appropriate knowledge and wisdom to lead companies to great heights in society.
To him virtue is about proper functioning of something and consequently things should work properly for that which they are meant to do. CEO’s should earn enough salary to justify what they are worth. To Kant, hefty salaries for CEO’s would be a normal scenario in the society. This is because in society people have different ‘maxims’ or purposes for which they intend to satisfy. The only point of concern to consider when satisfying this maxim is to make sure one does not use others as mere means to an end.
Although CEO’s have hefty wages they strive to attain what it takes to be in such positions. Again they do not use workers as mere means to an end but as ends to themselves. This is attributed to the fact that the workers gain in this arrangement. The CEO’s ensure good management of the organization or company, which translates to increased profits, and survival of the firm. Without these the companies would close down and the employees or workers too, would lose their jobs. Since the workers are aware of the situation then it is all right. (Lewis et al, 40)
In most cases, the CEO’s do not use false pretenses of what they are doing. They provide clear guidelines of the company’s or firms. Again they do not use any form of coercion or use misleading accounts at the expense of the workers. Their wages are therefore justified as the good intentions, which are of much importance that lead to bad results. Workers work harder at the ground but the pay does not match the hard work. To Kant, human beings are rational and have the free will to plan not be exploited by being used as mere means to an end.
Workers can choose and plan to develop their skills, which would see them in higher positions in society. Higher positions translate to better pay and a good life in general. Hefty salaries for CEO’s according to Sartre would be another form of exploitation, which is common in society. The society is full of individuals who are out to take advantage of their fellow individuals. CEO’s have an ego that shows they are very prominent and important in the society as well as in the companies they work for.
Consultation firms that work to ensure the salaries are high also share that feeling. This feeling that CEO’s deserve hefty pays ensures that the salaries remain high at the expense of the workers who work more. Sartre would see the lack of corporate social responsibility on CEO’s to their workers. Human beings are what they choose to be and they have the freedom at their disposal. CEO’s choose such positions and pursue all that entails being there but they should show some responsibility to society by ensuring that the workers salaries are increased.
Earning what someone else in the same company or firm would earn in a whole year is a high degree of oppression. On the contrary workers contribute to their oppression by not airing their grievances like demonstrating against the hefty CEO’s wages. Man is nothing without mutual responsibility and consequently responsibility should be instilled in the CEO’s minds. They can reduce their salaries and work to improve the workers welfare by increasing their salaries. Sartre is close in explaining my view that CEO’s should not be earning in a day what a worker earns in a whole year.
Workers perform most of the work and rewarding their efforts will be appropriate. It will act as an incentive to work. Motivated workers produce quality work, which would lead to increased profits. CEO’s should not be too selfish in feasting on the largest piece of cake. They should show some responsibility which is part of what makes a human being by ensuring reduced salaries on their part while increasing the workers pay (Thomas, 150) The role of the workers in an organization cannot be underestimated.
Despite good management from the CEO the workers should work under conducive environment. For firms to thrive, workers are involved at the grass root level in implementing of policies. Mere formulation without implementation is useless. Equality can be maintained by following the pay on performance approach where both CEO’s and workers are encouraged to work for the benefit of the whole firm or organization. Workers should unite in fighting for fair or justice in pay. CEO should not be paid hefty pay at the expense of workers.
Appropriate measures should be taken to ensure that workers are not exploited. Closing loopholes on taxes that allow companies to deduct, as much money as they please should be observed. Compensation should be done with relation to performance and increment in pay should be justified. Introducing progressive taxes can work to reduce the amount of money CEO’s take home as salaries. Limit should be made on the amount of money CEO’s can take as their retirement plans. This will reduce the hefty amount of money CEO’s take home on retirement.
Subject: Chief executive officer,
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 20 February 2017
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