Introduction
People engage in business activities, and some code of conduct usually bounds them. Different firms have codes of conduct enforced and developed by ethics teams. Businesses are required to operate in a way that they do not harm the stakeholders, the employees, or even society (Beauchamp, 2001). The purpose of this paper is to analyze the theory of virtue ethics and deontology. The paper will also explore some original philosophers' work. The comparison and contrast of the two theories will also be identified. The paper will also analyze the Galleon Group Insider Trading scandal, apply the theory of virtue ethics and deontology to the insider trading business issue, and compare and contrast how the theories apply to the ethical issue of Galleon Group. Virtue ethics will be discussed as the recommended theory to solve the moral problem of Galleon Group.
Deontology Theory
Deontology is an ethical theory that emphasizes the relationship between human actions and duty. According to deontology ethics, an action is said to be good morally because of its characteristics and not because the result of the action is good. The theory holds that actions are obligatory morally irrespective of their consequences. Deontology theory is associated with Immanuel Kant, and it uses the rules to distinguish wrong and right. The theory requires that an individual does what is right because it is right to do so and avoid doing the wrong simply because it is wrong. According to deontology, the good does not depend on the habits or character of the actor (Johnson & Cureton, 2004).
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The first moral philosophy work developed by Kant was the Groundwork of the Metaphysic of Morals which requires that individuals should act in such a way that their actions become a universal law, which can be applied to everyone who would be in a similar situation. In his work, Kant proposes that it is only goodwill which is good and he called the test for morality Category imperative. Kant identified that goodwill was the only rational thing that everyone would agree to be good.
Virtue Ethics
Virtue ethics is an ethical approach that emphasizes the characters of an individual as the critical element of thinking ethically, rather than the consequences of the rules of action. The theory was developed by Aristotle as well as other Greeks. It assumes that virtue is acquired through practice, such as being brave, honest, and generous among others. According to Aristotle, when individuals honour moral habits, they are likely to do the right thing whenever an ethical challenge occurs. The theory has three strands, eudaimonism, ethics of care, and the agent-based theories. Eudaimonism holds that a human's goal is a good life that can be achieved through virtues in everyday activities. Ethics of care which was developed by feminists and required that individuals should change how they view virtues and morality, shifting toward the attributes shown by women (Hursthouse & Crisp, 2013). Agent-based theory gives the account of characteristics based on common-sense intuition about the admirable character traits.
One of Aristotle's philosophical works is the Nicomachean ethics. Nicomachean ethics is an inquiry in philosophy into the nature of a human being's good life. In ethics, Aristotle proposes that human beings should seek a good living (Hursthouse & Crisp, 2013). In his work, Aristotle indicates that there exist ultimate good towards which the actions of an individual aim. Aristotle proposed some characteristics of being good, which include courage, patience, liberty, friendliness, wittiness, truthfulness, among others.
Comparison and Contrast between Deontology and Virtue Ethics
Deontology focuses more on the wrongness or rightness of the actions of an individual. Deontology focuses on the rules. In deontology, as long as a person has done something that is right at one moment, then the person is considered right even if it was only that moment that he was right. Virtue ethics, on the other hand, focuses on the character of the individual who does the actions and how the character will affect the actions of that individual. Virtue ethics does not consider a person to be good simply because he or she has done something right but instead focuses on the habits of that person (Chakrabarty & Bass, 2015). Both deontology and virtue ethics focus on the good life in which the actions and the characters of an individual should result in a good life.
Illustration
In a scenario where a child falls into a dam. Person X jumps into the dam to save the child despite the danger involved. Person Y does not jump into the dam to protect the child due to fear of dying but upon being promised a reward opts to save the child. According to deontology and the metaphysics of morals, person X does the right thing by jumping into the dam to save the child out of goodwill. Nicomachean ethicists would consider person X as courageous. Person Y would be regarded as wrong by deontology since he would let the child die. Nicomachean ethicists would find Y as a coward since his actions are not a result of good, but due to a reward. The actions of person Y would be enough to determine his virtue.
Ethical Issues in the Case Study 13: Insider Trading at the Galleon Group
The moral issue presented in the Galleon Group scandal is insider trading. Insider trading refers to the purchase and sales of securities based on non-public information. According to the Supreme Court, insider trading involves stealing of information from the people to whom the wrongdoers owe a fiduciary duty. Insider trading is said to be unethical and illegal. The founder of Galleon Group, Raj Rajaratnam, was in 2009 a subject of investigation due to insider trading. Raj obtained information from people working in companies such as Google, Goldman Sachs, Akamai Technologies, Clearwire, Hilton, and Advanced Micro Devices. Raj was charged for 14 cases of securities conspiracy and fraud. Raj used insider information to trade stocks from the companies.
Raj cheated in his business deals since other than depending on reports on articles and newspapers. He used other employees to acquire information which he would use to determine when to buy and when to sell stocks. Raj used information that had not been put to the public, making it illegal and unethical.
The Galleon Group Insider Trading Scandal in Deontology Perspective
Deontology insists that lying is not right (Beauchamp, 2001). Raj lied to other investors by being the top trader while the information he used was illegally acquired. Raj can, therefore, be said to have engaged in a wrong act. Theft, fraud, and conspiracy are intrinsic wrong, according to deontology. Despite that Galleon Group did earn a lot of income for the economy and it provided employment, the action in which that was achieved was wrong.
Virtue Ethics Perspective on the Galleon Group Scandal
According to Aristotle, a virtuous person should be honest, humble, moral, respectful, and trustworthy, among other virtues. Good and evil in virtue ethics are determined by the characteristics of a person and not his actions (Beauchamp, 2001). From the perspective of Aristotle, Raj would be considered a non-virtuous person since he obtained information illegally to trade. He can be referred to as a cheater and dishonest person. During the trial, Raj's lawyers even defended him saying his success was due to his hard work and diligence while it was not true. Galleon avoided making losses by cheating, making him a wrong person.
Comparison and Contrast of How the Theories Can Be Applied In This Scenario
Deontology would consider the actions of Raj as wrong without considering the consequences or his characters. Virtue ethics would think Raj as a bad person, a person without virtues and not his actions or the results of those actions. Both Deontology and virtue ethics consider Raj wrong for using non-public information to trade and acquiring that information illegally since it is unethical.
Conclusion
Virtue ethics and deontology theories are aimed at a good life at the end. Virtue ethics focuses on the characters of a person to determine his or her goodness. Nicomachean ethics require that a virtuous person should be honest, courageous, trustworthy, humble, and friendly, among other virtues. Deontology focuses on the actions of a person and not the consequences of those actions or character of that person (Alfano, Loeb, & Plakias, 2014). From the case study on the Galleon Group Insider Trading scandal, Raj used insider information in his operations to make profits. According to deontology, the actions of Raj as the founder were wrong since cheating, lying, and fraud are considered wrongs. According to virtue ethics, raj is not virtuous since he lied, cheated, and even conspired with insiders in other companies to do business. Insider trading is considered unethical in business as long as the information used is not present to the public. Insider trading could be solved in this case study if deontology was applied to ensure that Raj followed the right procedure in acquiring information to operate his business. By minding his actions and doing what is right, Raj would not have led to the closing down of the company. Virtue theory would have helped if Raj became honest and valued integrity since he would not have used insiders in other companies to acquire information. Raj would only accept profits that were earned in a legit way as a virtuous person. I would recommend virtue ethics to resolve the problem in the Galleon Group. Virtue ethics focuses on the character of a person and not his actions. A virtuous person is always likely to be very selective on what actions to take in any particular situation. The actions of a righteous person are usually right and always ensure that the consequences are positive (Beauchamp, 2001). Virtue ethics requires virtues being used in everyday activities; hence the actions and results are still for a good life. By Raj being virtuous, he would only use strategies that would not harm other stakeholders in the securities market and would follow the set rules of business operations.
References
Alfano, M., Loeb, D., & Plakias, A. (2014). Experimental moral philosophy.
Beauchamp, T. L. (2001). Philosophical ethics: An introduction to moral philosophy.
Chakrabarty, S., & Bass, A. E. (2015). Comparing virtue, consequentialist, and deontological ethics-based corporate social responsibility: Mitigating microfinance risk in institutional voids. Journal of Business Ethics, 126(3), 487-512.
Hursthouse, R., & Crisp, R. (2013). Normative virtue ethics. Ethica, 645.
Johnson, R., & Cureton, A. (2004). Kant's moral philosophy.
