To be Ethical, or not to be Ethical…..

What would you do in the following solution?

Knowing full well that there is scientific proof that there cigarettes are lethal AND nicotine is addictive, would you work for Philip Morris (one of the largest cigarette manufacturers in the U.S.)? Just to make things interesting let’s say that you beginning salary is six figured with a high potential for bonuses.

This question poses an ethical dilemma.  On one hand, how can you possibly work to increase the sales of a product that when used “kills” the consumer?  Yet, on the other hand, our government and we as a people have decided that cigarette smoking is a legal practice and therefore there is no reason to feel morally unjust in working to advance the widespread use and sales of cigarettes.

Ethical?

Ethical?

If everyone in our class reads this blog post (which I hope they do), I can be almost certain that not everyone would agree on what they would do if presented with the situation above.  I believe that our personal ethical and moral standards are formulated strongly on the environment in which we were brought up and currently live.  If you were brought up in a home with two smoking parents, you might have no problem working for PM.  Whereas, if your grandfather passed away after and long and difficult battle with lung cancer that resulted from years of smoking Marlboro unfiltered cigarettes, Phillip Morris might be the last place in the world you would ever work.

Ethical – defined by our friends at dictionary.com as “conforming to accepted standards of social or professional behavior.”  Much more simply stated I believe that to be ethical is to act in a morally correct way.  Today in class an extremely interesting argument was brought up focusing on the line between acting unethically and acting illegally.  Much of the financial trickery performed at Enron was perfectly legal, from the complexities of securitization, to the SPE’s created by the brilliant, but crooked Andy Fastow.  Yet, many students in our class automatically associated these practices as being “illegal” because they were done in an effort to deceive the shareholders.

Andy Fastow was LEGALLY deceiving the stakeholders of Enron and therefore acting unethically – right?  It depends on what you define as unethical behavior.  What Andy Fastow was doing was totally legal and was done in an effort to raise Enron’s stock price.  Not only would this increase his salary, but it also boded well for the stockholders who were receiving high returns on their Enron investments.  On top of that, can we really call shame to Andy Fastow and say he was being unethical, or can we blame the SEC and other oversight bodies who failed to see the potential of the structured finance happening at Enron.

Andy Fastow clearly wasn’t the only one acting on the border of the ethical behavior (and for that matter the law) at Enron.  This deceitful and questionably behavior seemed to transcend almost the entire corporation, from Ken Lay, to the trading floor, heck – I wouldn’t be surprised if the janitors weren’t the most honost people in the world.  But, what was it about Enron that created and harbored all of these “crooked” employees?  I believe the answer lies in the corporate environment/culture that was created around Enron.  The executives at Enron believed that they were the best of the best, running the best corporation in the world.  Jeff Skilling believed he could do no wrong and anything that he touched would turn to gold.  This attitude from the top-tier was clearly reflected everywhere else in the company, from Andy Fastow to the overly confident and cut-throat men and women on the trading floor.

The same way that our surrounding environment shapes whether or not we could morally justify working at Philip Morris, the environment at Enron allowed for people to partake in what outsiders would certainally look at as ethically questionable behavior to say the least.  Within the Enron bubble, the activities undertook by Andy Fastow and others may have seemed perfectly acceptable as long as they resulted in a profit.  From the beginning the win at all cost attitude established by Ken Lay and his chronies doomed Enron from the start.

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6 Responses

  1. In my marketing class last week, we actually reviewed a case almost exactly like the scenario you presented in this post with Phillip Morris. In our case, a woman had to choose whether or not to accept a job based on her comfort with working for a company who sold cigarettes. However, the woman making the employment decision would technically be working under the Kraft arm of Phillip Morris. Even so, she had an ethical dilemma with being associated with the parent company.

    Although I can’t say exactly what I’d personally do in this situation…I think it’s important to consider the current position that many Americans are in right with regard to employment-many people can’t afford to be picky when accepting an offer because it may be the only one they have received in a year. The main question I then have is, do desperate times lead to or justify unethical decisions?

  2. Part of the decision process of whether or not you’d work for Phillip Morris or any other cigarette company depends on your perspective and how you rationalize your actions. Yes, cigarettes kill people, in fact lots of them. But for all of those people it kills, how many do they add some type of value to life? I don’t smoke, but I have heard they can help you relax, be ‘cooler’ or fit in, maybe get over other drugs. I know one person who smokes because he can’t drink. Perhaps cigs are unhealthy, but you could make the arguement as a cigarette producer that you produce a product that can be beneficial to people (in one way or another). There is an incredibly enormous stigma against smoking here in the U.S. Travel to Europe or Asia and smoking is a much less taboo, much more accepted practice.

    My point is that similar to cigarette makers, Fastow could easily enough rationalize his actions. “I’m helping the company with all of this shady financial stuff! Maybe it isn’t ethical by some people’s standards, but at least if makes the bottom line.”

  3. It is always going to be a hard question…”if you were a lawyer. would you defend a convicted murderer??” On the other hand, if you don’t have a job and an opportunity presents itself at PM, wouldn’t you go for it??
    I think the motivation behind one’s actions speaks volumes, but that does not justify being unethical or immoral- even in a cut-throat work environment.
    But there will be always hard questions to be asked, and the world outside of the “bubble” will always challenge our morals and beliefs, it all depends on how we re-act to it.

  4. It is very important (and very difficult) to understand environmental variables that form the ethical and moral guidelines that people follow. The head-hunters who believe it to be absolutely justifiable to kill in order to help themselves recover from the loss of loved ones. In parts of Pakistan people are killed in ‘honor killings’ which are deemed moral in their tribal tradition.

    To the Taliban, smuggling was OK, but stealing would get your hands cut off.

    These are extreme examples, but they go some way in showing how subjective ethics and morals are.

  5. The comparison that Nadir brought up about the Taliban is very interesting and something that we don’t always think about or talk about for that matter. The issues that were raised in class with being illegal or legal is not only with Enron it can be looked at from any publicly traded company, they release the information that stakeholders what to know but may not necessarily release all the information; as long as the stakeholders are earning and are satisfied with the company that is sometimes all they are looking for and the ethical questions may never be asked. Anna said it perfectly about the world outside the bubble challenging your morals, sometimes you will be challenged to do things that you know are unethical or immoral and that is when you have to make the decision for yourself. It is probably a guarantee that there are people working for PM that are against smoking but at the end of the day it is a job and it is supporting their family which may be their main priority in life.

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