Worldcom - Cynthia Cooper Article

Shelton Bass

Stu ID# 0939764

The University of Redlands, School of Business

2016W08 Business, Ethics and Society (MGMT-667)

September 19, 2016 (Case Study Assignment)

Case Study Analysis: "Consider the WorldCom/Cynthia Cooper article; were her actions "ethical" when she exceeded her authority on the internal audit? Remember, she kept 'digging' into the books when the losses became greater. It's the 'good soldier" versus 'good person' dilemma." Is fair to say her actions revealed serious corruption on the part of management resulting in one of the largest corporate bankruptcies on record and near life prison terms for some of those most beloved among the employees and the community?"

Please apply the utilitarian and deontological methods to her action(s). I am more interested in your reasoning and application of these theories than the conclusions reached. Don't be concerned if one method finds her "ethical" and another does not. Ethics, like any branch of philosophy, is an activity designed to challenge your assumptions about the world around you.

        Though there are several schools of thought regarding morality, I will be focusing on the moral theory of utilitarianism and deontology school of reasoning for the purpose of reviewing the case study of “Cynthia Cooper and WorldCom” by Emily Mead and Patricia H. Werhane in our text Ethical Issues in Business: a Philosophical Approach.  Utilitarianism and deontological reasoning have little in common; however, they are similar in that both are concerned with attempting to determine what human actions are right and wrong. Other than the previously stated similarity, utilitarianism and deontology are very different because of their different approaches to understanding what is right and wrong or good and bad.  In applying both of these theories to the case study of “Cynthia Cooper and WorldCom,” I will attempt to demonstrate how both utilitarianism and deontology can be applied to the “whistleblowing” of Cynthia Cooper uncovering $3.8 billion in accounting fraud at WorldCom. For this analysis, I will first provide a detailed understanding of both utilitarianism and deontological reasoning.  Then I will demonstrate how both theories can be applied to our case study.

        Utilitarianism is a form of consequentialism, founded on the basis that the consequences or the results of any action are the only standards of right and wrong.  Our text Ethical Issues in Business, “Utilitarian and Business Ethics” by Andrew Gustafson asserts utilitarian as being “the creed which accepts as the foundation of morals, Utility, or the Greatest Happiness Principle and the absence of pain; by unhappiness, pains, and the privation of pleasure.”(Donaldson, T., & Werhane, P. H. (1979). Ethical Issues in Business: A Philosophical Approach. Englewood Cliffs, NJ: Prentice-Hall; page 78) The utilitarian method of ethical reasoning is simply a measurement of quality and benefit for the many rather the few.  It is a theory that holds virtue as a moral good and that the best moral action is the action that maximizes utility, satisfaction or happiness. The founder of Utilitarianism, Jeremy Bentham goes on to define utility as being “the aggregate pleasure after deducting suffering of all involved in any action”(https://en.wikipedia.org/wiki/Utilitarianism). In class on Monday, September 12, 2016; we learned that “pleasure” is defined by using the seven characteristics of Hedonistic Calculus:

1.  Intensity: What is the intensity of the pleasure?
2. Duration:  How long will the pleasure last?
3. Certainty:  How likely will the pleasure occur?
4. Remoteness:  How far away is the pleasure?
5. Repeatability: How likely is it the pleasure will be repeated?
6. Purity:  How many people will be affected by pleasure?
7. Extent:  How many people will be affected by the pleasure?

Bentham good friend and English philosopher; John Stuart Mill, expanded the concept of utility to include the quality of “pleasure” while focusing on the greatest amount of good instead of individual moral actions. In Mill’s revised utilitarian principle, Mill asserts that there are two classes of pleasure that we must consider; higher and lower.  In our reading from our text, Mill states that lower levels of “pleasure” merely satisfy human basic needs and desires like food, sleep, breathing, and sensual pleasures; while there are four essential elements can characterize higher levels of “pleasures”:

1. Intellect:  Literacy, logic, emotional intelligence, etc.
2. Noble Feelings: Sympathy, heroism, empathy, humility, courage.
3. Imagination: Moral imagination, creativity, innovative thinking.
4. Moral Sentiments:  Justice, honesty, fairness.

(Donaldson, T., & Werhane, P. H. (1979). Ethical Issues in Business: A Philosophical Approach. Englewood Cliffs, NJ: Prentice-Hall; page 82)

Mill’s revised utilitarianism approach takes Bentham’s 19th Century quantitative approach to a qualitative approach that makes utilitarianism more widely acceptable in the 21st Century.  However, there remain critics of utilitarianism.  Thus, I turn to deontology reasoning of morality.

        Deontology ethics of thinking is a normative ethical approach that focuses on the right or wrong of actions themselves as opposed to the right or wrong of the consequences of actions like utilitarianism.  Deontology is described as “duty-based” or “obligation-based” ethics. The term “deontology” derives from the Greek word “deon” meaning obligation or duty (https://en.wikipedia.org/wiki/Deontological_ethics).  During class on Monday, September 12, 2016; we learned the deontological method is an ethical reasoning that says “enough is enough” because it sets the standards by being rule based.  Immanuel Kant was responsible for the most popular form of deontological ethics.  Kant’s moral theory is based on his view that human beings have the unique capacity for rationality. According to Kant, it is this ability that allows people to act by moral law or duty. Moreover, emotions and consequences play no role in moral action but acting according to a moral obligation or moral law.  Our text discusses Kant’s theory of deontological ethical reasoning to consist of a set of maxims that are categorical imperatives.  Our book focuses on the three formulations of Kant’s categorical imperatives as follows: