Post 3: Corporate Personhood and Social Responsibility

Summary

The advent and advancement of technology in recent years has allowed companies to expand into new industries, create and supply more efficiently, and has also yielded many other beneficial byproducts. While these advances have their positive impacts on business ethics, the technology inevitably has been abused which has introduced many ethical issues in technology.

The first and probably most prevalent ethical issue that occurs in technology is that of privacy. With the application of technologies in business, companies are overwhelmed with the amount of data they are able to collect about their customers. As a user it is hard to understand what exactly we are giving these companies access to and how they are using that information. Many of these privacy issues come from companies selling and abusing the data they are able to collect from users. While some laws have been passed by the government, it is at the individual company’s discretion to decide what exactly they deem ethical or not. With these blurred lines many companies have recently been in the news for making unethical decisions regarding the privacy of their customers.

Another issue related to privacy has to do with companies unethically monitoring their employees. While this issue might have existed on a smaller scale in the past, the advent of technologies, and particularly the increasing popularity of social media, has heightened the issue. Now the ability for employers to monitor the online activity of their employees has become as easy as tracking down their social media page and searching for inappropriate posts. This is a problem because many people argue that it is unethical for employers to fire or reprimand their employees based on things that they post online, and usually, outside of work hours. Many companies have put policies into place that allow them to control the content their employees share only to the extent that their actions are disloyal to the company. These social media and content policies have to be carefully constructed in a way such that they do not interfere with the employees’ life outside of business. This fine line is a tough one for companies to navigate and is why the issue of employee monitoring through technology, ethical or not, is so commonplace.

A final outstanding issue in the ethical use of tech in business is that of cheating and piracy. With the use of technology it has become increasingly common for activities such as peer-to-peer file sharing and software sharing to occur. Online hosting websites such as GitHub have made it entirely too easy for people to have access to other people’s software and code, legally or not. Having access to these types of open source projects have made employees of tech companies lazy, causing them to behave in unethical ways when using other’s work. Anti-piracy laws and the use of things like licenses and service agreements have slightly diminished the issue, but businesses that are looking to cut costs and improve efficiency may still cut corners and unethically pirate other people’s work.

These ethical problems are only a few of the issues that have become questions in industry due to the increasing use of technology. Moving forward, many additional steps will need to be taken by the government and companies themselves to address these issues and implement reasonable solutions.

Critique

This critique will focus on the lawsuit between Waymo and Uber that reached a settlement in early 2018. Waymo is an autonomous vehicle company that spun off of Google in 2016. The suit was regarding lidar technology designs, which would allow an autonomous vehicle to “see”, and the software needed to implement it. Uber has stated that it needs to develop autonomous technology to survive, increasing the importance of this case. Additionally, the field of autonomous vehicles has the potential to become a trillion dollar industry as well that will change the state of transportation as we know it. Waymo sued Uber for stealing its autonomous vehicle technology, and after a year of litigation Uber finally settled for $245 million and agreed not to use Waymo’s hardware or software intellectual property. During the trial, Uber was accused of bugging hotels, deleting text messages, infiltrating sensitive WhatsApp groups, and obtaining trade secrets from its competitors by persuading Waymo employees to join an autonomous vehicle technology startup, Otto, which was eventually acquired by Uber. Even Uber’s CEO was accused of being in on the scandal and of encouraging the Waymo employee to steal from the company and bring the trade secrets to Otto. There was supposedly a plan from the beginning to acquire Otto, and while this is not confirmed, is quite likely given the outcome of the trial and the fact that it was acquired just 6 months after it was founded.

Uber’s action is quite problematic in the eyes of an Epicurean ethicist. First, this action constituted not properly crediting the contributions of others. Epicurus places a high value on friendship and loyalty, and this clearly infringes on that. Additionally, the main point of Epicurean ethics is to maximize future pleasure while minimizing pain. While stealing the technology initially could have lessened the short term pain of developing new technology from scratch, it is clearly evident that this caused Uber much more pain in the long-term, $245 million worth of pain to be exact. The lawsuit lasted for a year and used up many resources for both companies, but especially Waymo as they were a newer company and thus were not as well established. Uber’s actions definitely did not minimize Waymo’s current anxieties as the actions threatened Waymo’s existence as a company. Not only that, but Waymo was originally asking for at least a $1 billion settlement which would have put a major strain on Uber’s resources and growth, possibly leading to layoffs. For both companies’ employees, this lawsuit caused much anxiety surrounding the possible loss of their jobs. Along those lines, if an employee was willing to steal from another company and give to their company, the anxiety will always be present that they will steal from your company in the future and give to someone else. Bringing that employee into Uber only brought about future anxiety for everyone. Lastly, Epicurus would be opposed to pursuing the field of autonomous vehicles in general. The way the world works currently is sufficient and autonomous vehicles would be a luxury product and thus a natural and unnecessary desire, so trying to push improvements can only lead to future anxieties. This would take one further away from ataraxia, the ultimate goal in Epicurean ethics.

There are a few ways that Uber could have acted ethically in this situation. While there was never a direct admission of guilt, it is strongly suggested by the trial that Uber convinced one or more employees to take their trade secrets from Waymo to Otto where Uber then acquired Otto. As examined above, this action caused much future anxiety and should not have been taken in the first place. Even if Uber did not convince these employees to steal and the individuals brought the stolen technology themselves, Uber should have refused to use it and alerted Waymo to the situation. Again, stealing the intellectual property only led to more anxiety in the future, even though it created a small amount of current pleasure. Additionally, individual employees of Uber could have resisted their instructions to bug hotels and other nefarious actions. It was implied in the trial that even Uber’s CEO was part of the plot to steal the technology and gave instructions to his employees to aid the process. A corporation is made up of individuals, and each of those individuals should have acted to minimize their future anxiety by not participating in this theft. One ethically correct decision that Uber did take regarding this incident was to force the CEO to step down and to sell his shares in the company. In addition, several employees were fired for the role they played in the incident. Epicurean ethics would tell us that this was the best way to maximize future pleasure and minimize pain, although it did cause a smaller amount of current pain for the fired individuals.

Comparison

Both of the approaches that will be discussed below have been cited and discussed in the following article published by the Harvard Business Review.

Approach 1: Legal Compliance Program

The first approach to combating unethical behavior by corporations that we will discuss is an increased legal compliance program. This means that a company will dedicate additional resources to the detection and prevention of violations of the law by a company. The main reason for a company to focus on this is because of the risk of the severe penalties that breaking the law can have on a company. These penalties include the financial burden of litigation fees and fines of legal hearings, as well as the damage to a company’s reputation among the business partners, employees, potential applicants to the company, and the view of the company by the general public.

The main focus of legal compliance programs are on the prevention of unlawful conduct. This includes clearly establishing standards for legal and ethical compliance, assigning people to oversee the compliance of these standards among employees throughout the company, creating a system in order to report ethical and legal non-compliance, and consistently enforce cases of non-compliance. Essentially, with a legal compliance program, the main incentive in order to act legally and ethically is the threat of being detected and being punished.

Approach 2: Integrity-Based Program

The other approach that was discussed in the Harvard Business Review article was to implement an “integrity-based” program in order to manage, oversee, and enforce ethical behavior. The integrity-based approach is much more broad than the legal compliance program discussed earlier. This allows each company to tailor it specifically to their own company to make it work the best for them. The main goal of the integrity-based approach to ethical behavior in corporations is to clearly define the values, goals, and basic guidelines of the company in terms of ethical thought and behavior.

This system relies on management to set the standard for what is considered ethical behavior in the workplace, and to set reasonable standards for employees to understand and follow. Also, possibly most importantly, it relies on the management to create a culture within the company that inspires ethical behavior. If a company puts a large amount of pressure on its employees to meet certain quotas, it creates a culture where meeting that quota may be deemed more important than acting ethically by the employees. In an incentive-based approach, everything about a company’s code of conduct, decision-making process, and all other functions across the company are centered around a core set of ethics.

Comparison

Both the legal compliance program and the integrity-based program provide a clear guideline for what constitutes ethical behavior within the company. For the legal compliance program, whether or not something is considered ethical is pretty much determined by whether or not it is legal. For the integrity-based program, whether or not something is ethical would be made clear in the company’s code of conduct and core framework of ethics. Both the legal compliance program and the integrity-based program give employees incentive in order to act ethically as well. The legal compliance program incentives ethical action by emphasizing the risk and/or punishment of unethical/illegal behavior. The integrity-based program uses ethical behavior as a driving force for the company, so the company’s success is an incentive for employees to act ethically.

The main distinction between the two is that legal compliance program focuses mostly on the punishment for unethical behavior, while the integrity-based program promotes ethical behavior before anything unethical even happens in the first place. The legal compliance program is more of a scare tactic than anything else. It does not emphasize why acting ethically is actually important to the company, other than it cost the company money and you can lose you job and/or go to jail if you do not act ethically. the integrity-based program, however, puts ethics at the forefront of the company’s goals and emphasizes why it is important and beneficial to the company that its employees act ethically.

Another important distinction between the two is importance of the law to the two methods. One of the major shortcomings of the legal compliance program is that it essentially just uses the law as its moral framework. As noted by the article, a common phrase thrown around in the corporate world is “If its legal, its ethical”. This is prominent in the legal compliance program, since it is focused on detecting and avoiding illegal activity and enforcing the proper punishment for said illegal activity. In the integrity-based method, however, it is not the law, but rather the core ethical values put forth by the company, that really determine ethical behavior.

Conclusion

According to the Epicurean framework of ethics, we would say that the integrity-based program is a more favorable way to prevent unethical behavior in the workplace. Epicurean ethics focus much more on the outcome of an action and preventing negative outcomes of our actions on ourselves and on other people. We believe that the integrity-based system does a better job of preventing those unethical actions from occurring in the first place. Furthermore, Epicurean ethics have a heavy focus on friendship, loyalty, and proper collaboration with other employees. Not being friendly or loyal is not necessarily illegal, so the legal compliance program would not do a very good job of addressing those issues. the integrity-based system and its emphasis on the core values of the company would certainly do a better job of addressing those types of issues.

Proposal

Corporate Social Responsibility

First, in order to enforce corporate social responsibility, Epicurean ethicists would want to advocate for corporate personhood. Again, corporate personhood is the idea that corporations have “a legal identity separate from its shareholders” (theatlantic). When a corporation is unethical, the corporation itself should be held accountable. In doing so, those who are employed by the corporation will be directly affected with mental anxiety. However, such is necessary to rectify the company and steer it towards more ethical behavior. Although a potentially large group of people may be negatively affected by corporate personhood (the stakeholders), such is offset by the the greater positive effect of rectifying the corporation’s unethical actions and how it will affect the rest of society and the world.

As a result, potential legislative action or punishments include restrictions or fines on the company until it acts ethically. Such actions will never yield any physical pain, only collective mental anxiety for the stakeholders in the corporation. One measure that could be taken is limiting the sphere of influence the corporation has until it begins to act more ethically. For example, if a company operates in both the Americas and in Europe, it may be forced to only continue operations in the Americas until its behavior is rectified. Only then could they return to operate in Europe. Doing such will reduce unhappiness and anxiety. Then, perhaps the most extreme measure that could possibly be taken against a corporation would be to take away all profits from the corporation and force each employee or stakeholder to gain enough income to just live a simple, sustainable life. Doing so will not physically harm those in the corporation, and it will enable them to continue to live and work on making amends for their unethical actions.

Therefore, with corporate personhood, Epicurean ethicists would be able to evaluate a corporation’s actions in regards to how they affect the happiness and anxiety of people and their social responsibility to maximize the former while minimizing the latter. In turn, when a corporation is failing in their social responsibility to promote happiness and friendship, Epicurists will be able to better influence the corporation’s actions with legislative action or punishment.

Correcting Unethical Behavior

By proposing corporate personhood and regulations will enable Epicurists to better influence a corporation’s practices, beliefs, and profits with the goal of eliminating or reducing human physical pain and anxiety, one might wonder what Epicurean corporate social responsibility would look like. Let’s discuss this by evaluating Amazon, one of the biggest corporations with unethical behavior in the eyes of an Epicurist, and possible ways to correct its unethical behavior.

Amazon is an e-commerce site and also a platform for cloud services selling billions of dollars worth of goods and providing many computing services. Epicurists would abhor Amazon’s current state since it sells so many luxurious and unnecessary goods which simply cause anxiety unhappiness for people. The consumer mentality and promoting desire is against Epicurean beliefs. An Epicurist seeking a simple life would demand that Amazon provide only the basic necessities of food and simple clothing. Perhaps every once every three months, an order of cheese could be sent to the Epicurist’s home from Amazon’s pantry - but no more. For the good of everyone, Amazon should help enable people to live simpler lives with food and clothing sent to their doors as needed.

In addition, Epicurists would deem Amazon’s cloud services as too powerful and in need of regulation. Many tools provided on AWS are oriented at making a life luxurious or is sold and used by other companies to do so. For instance, EC2 and Lambda are used to provide online applications and services that make the lives of individuals more complex and luxurious. When using the proposal above, Amazon would begin facing restrictions and perhaps fines to make it focus on providing services and tools that enable themselves and other companies to provide applications and services that benefit people by reducing pain and anxiety. Amazon could also regulate which companies could go onto their platform and use their services. They could allow medical companies while denying social media companies from using their services. In conclusion, Amazon and many other companies would begin evaluating at how they promote happiness in the world.