Ethical Dilemmas: A Self Reflection Essay Sample



Ethical dilemmas are an integral part of every aspect of human life today. Apparently ethical dilemmas are among the principal factors that make the process of decision making more complicated. The major reason why ethical dilemmas make decision making complicated is because they pose two possible answers to a situation, both appearing to be correct. In an ethical dilemma, either side has a strong argument behind its decision. Worth noting is the fact that ethical dilemmas exist in all fields of life, ranging from the world of medicine to the world of business. Arguably, business is among the widestfields of human economic activity. As such, it calls for careful decision making as it impacts on many parties. The stake holders to a business concern are considerably many and have varied ideas and interests. This explains why a decision may appear morally wrong for a particular group and legally right for the same group (Weiss, 2009). Another reason as to why many corporations face ethical dilemmas is the effect of globalization. Globalization has enabled the organizations to venture into new countries where the legal structures may contravene company policy. This paper seeks to explain the nature of ethical dilemmas faced by corporations and the controversy they trigger. This is done, in light of a case involving Starbucks Corporation and the UK government.

The Actual Ethical Dilemma

When the UK Prime Minister David Cameron recently made remarks likely to suggest that the US coffee company Starbuck corporation was not complying to the tax policy of the united kingdom, there was considerable tension between the U.S giant and the tax authorities of the united kingdom. As expected by many, the United States Corporation threatened to pull out of the United Kingdom, consequently putting their planned investment worth 158 million U.S dollars to a sudden halt. Apparently, this would impact negatively on the economy of the United States considering that the organization pumps an equivalent of 300 million U.S dollars into the economy of the United Kingdom. On the company’s side, the corporation would not suffer much considering that it has ready markets in china, Africa, the United States and the Middle East where it will gain even more considering that the tax rates in these regions are much lower.
Analysis as well shows that the company will not lose much since its profits for the last quarter are indicating a positive change. Looking at the idea from the side of the United Kingdom, the economy will lose much since such things as the Gross Domestic product may drop considerably. Additionally, it is worth noting that 300 million US dollars is a substantial amount. The other way through which the economy will lose is through reducing the chances and opportunities of employment in the economy. Apparently, according to the Starbucks spokesman, the organization offers employment to 9000 people within the economy of the United Kingdom. Worth noting is the fact that offering employment is part of the concept of corporate social responsibility. Corporate social responsibility is an ethical obligation of all organizations operating within any community.
Still the United Kingdom government maintains, using extreme tax avoidance tactics is quite unethical. While tax avoidance is not a crime, excessive avoidance is unethical. Apparently, all businesses seek to avoid tax, since evasion is an unlawful practice. Additionally, avoidance may help an organization achieve higher profits. The major reason why the united kingdom government feels that such corporations as Starbuck Corporation should pay more taxes is because, by paying little taxes, they deprive the government of the much required tax revenue especially during times when the government is handling a deficit budget. Additionally, by avoiding hefty taxes, Starbuck Corporation poses unfair competition to the small less established corporations. Similarly, the corporation limits economic growth buy paying little taxes.

The Controversy

The debate in this case is rooted in whether or not it is ethical to suspend the projects by the Starbucks Corporation. The controversy is fundamentally based on the fact that the management of the corporation is torn between meeting the business goal of maximizing the shareholders’ wealth or the social responsibility goal of staying in business, providing employment to more than 9000 people and contributing to the overall welfare of the economy. Apparently, the managers have the responsibility of maximizing the wealth of the shareholders. One of the major ways of achieving this goal is through cutting down on such things as the tax burden (Tittle, 2000). Conversely, the business has the responsibility to comply with the laws, including the tax policy of the society within which it operates. The obligation to pay taxes can be justified in many ways. Failure to pay taxes is not only illegal but also unethical and morally unjustifiable.
Apparently, there are three interest groups in this dilemma. It is the variance in the interests of such groups that the dilemma arises. The first interest group is the company. By the company, it means that all the shareholders, management as well as the financiers are affected. The interest of this group lies in the maximization of profits (Carroll, 2009). The fact that the interest group is interested in the minimization of cost makes the decision by the corporation to avoid taxes, through whichever method, justifiable. Apparently, this group will not mind suspending the planned investment in the UK market if this will create tax savings. Similarly, the group will not mind if the organization made a decision to completely pull out the UK market as there are 0other lucrative markets. In straightforward terms, the interest of this group is based on profit by whatever means.
The second interest group is the government. Typically, the government in any country is interested in the taxation aspect of business. The government is concerned with such things as tax compliance. Compliance refers to the decision by to abide by the laws of the land relating to taxation. Non compliance refers to the decision by the business or individual to evade taxation. In this case, Starbucks Corporation has not evaded taxation. On the contrary, they have used extreme means to avoid taxations. Worth noting is the fact that tax evasion is a matter of law, while tax avoidance is a matter of ethics (Jennings, 2009). In this case, the government is left with the duty to see to it that the corporation does not excessively evade tax. Instead, they should pay tax in accordance to the profits they make under the protection of the law. The interest of the government in this case represents the desires of the people and the entire UK society in general.
The third interest group is the general public. The general public is the actual society or UK community. The general public has so many interests in the smooth running of a business. Worth noting is the point that there is a very close connection between the ordinary people and the business. The relationship between the two interest groups is a mutual relationship in the sense that either gains in one way or another from the other (Lo, 2009). Worth noting is the fact that by suspending the intended investment and possibly pulling out of the UK market, the Starbucks Corporation will be denying the public quite a number of things., the most prominent thing that the corporation will make the general public forego is the product. As much there may be other firms dealing with coffee processing, the general public or simply the consumers need to access variety. As such, failure of the organization to operate in the UK market will limit the consumers’ choices.
Additionally, if the organization fails to commit the funds to the said investment projects, it will be limiting the number of employment opportunities in the economy. Considering that the organization already has 9000 employees, it is plain to see that establishing more branches will create more employment opportunities. Such employment opportunities will definitely help the people improve their quality of life by establishing a source of income. Additionally, this will indirectly contribute to the economy since such employed workforce will be in a position to pay tax to the government. The fact that the corporation pays hefty taxes to the government is a clear indication that by exiting the market, the organization will reduce the income that the government generates from business income. This way, it will not be in a position to serve the citizenry effectively.
While the international community is observing the on goings between the UK government and the corporation, people hold different positions in relation to the same. While others think the organization is right in suspending the said projects, others think the decision is sufficiently unethical in the sense that it violates the expectations of society. Those arguing that the business should exit the UK market hold that the sole important goal of a big business is to make the most out of the invested capital of the owners. They further argue that corporate social responsibility contravenes the main objective of business. Those holding contrary ideas argue that avoiding tax to unacceptable levels amounts to evasion, a concept that is morally wrong. Additionally, they argue that such conduct translate to extreme capitalism, which only creates imbalances in society. Such is the current controversy relating to the Starbucks case.

Possible Approaches to Solving the ethical dilemma

In solving this dilemma, various ethical theories may be employed. The first theory that can be applied by the management of the corporation in handling the dilemma is the categorical and imperative theory, a concept explained by Immanuel Kant. The in elaborating the theory, Kant explained that self interest is something that only works against the society. As such, Kant suggested that self interest should not be a big seller to anyone in solving ethical issues (Jennings, 2012). Instead, he said, the parties involved in the dilemma should be solved by all parties acting in a universally acceptable manner. In this case, self interest refers or can be equated to the interest of the company and the decision to suspend the planned employment. Considering that the decision contravenes the wishes and interests of many people, it is justified to say that suspending the projects is universally unacceptable. Universal acceptance refers to the wishes of the majority, who in this case are the UK government and UK society at large. Essentially, therefore, the organization should consider proceeding with the planned investments as they chat the way forward with the government.
The second theory that can be applied to solving the dilemma is the social contract theory. According to Jennings (2012) the social contract theory, which was developed, explained and advocated for by John Locke and John Rawls, borrows from both natural law and John Stuart Mill’s utilitarianism. As they explain this ethical perspective they pose the question: how would the world be without rules? They argue that in the absence of rules, there would be serious anarchy in which the poor and the weak would lose. As such, they argue that through natural law and situational ethics, human beings would, through some unseen mechanism, come up with some kind of social obligation (Pozgar, 2012). This way, people would be expected to act in a particular way, without being asked to, in a complex concept referred to as the social contract. According to the social contract theory, all ethical dilemmas should be solved by choosing that option that appears fairest and most equitable. In this case, the fairest option is that which is corresponding to the wishes of many. The corporation will therefore be required to invest in the market and to continue serving the populace while paying the required taxes.
The third theory that can be applied to solving this situation is moral relativism. According to Jennings (2012), moral relativism can be described simply as time and place ethics. In other words, that which is morally acceptable varies from situation to another or from time to another. According to Jennings, burning down a building to end drug business in the surrounding is morally justified, even if the drug dealers perished inside the building. In this light, the Starbucks Corporation can as well forego the large profits and sacrifice the huge profits for the good of the preponderance. According to moral relativism, much like the utilitarian ethicist theory, the highest good to the majority is the most justifiable thing. As such, the organization can suspend the wealth maximization goal to benefit the general public, and the entire UK economy at large.


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Pozgar, G. D. (2012). Legal and Ethical Issues for Health Professionals. Sudbury: Jones & Bartlett Learning.
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