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BSB111 Case Study Assignment, Semester 2, 2018 Student name: Chen, Yifei Student number: 10038001 Case 1(a)

(10 marks)

Utilitarianism is a moral doctrine that resolves ethical dilemma by identifying the positive and negative outcomes of the proposed action – an action is ethical if it maximises happiness for the greatest number (James & Hales, 2017). In Zuckerberg’s case, sharing personal details of clients will affect a wide variety of stakeholder groups including Facebook as a corporate, its investors, employees and social media site users.

To calculate the net overall happiness ascending or descending, the pleasure and pain associated with Zuckerberg’s decision will be identified (James & Hales, 2017). For Facebook, monetisation of client files would create a deleterious impact on its integrity and reputation as a moral business. Although the act could possibly bring economic gain to Facebook and its investors, the publicised scandal of privacy protection could upset the ethical responsiveness and commercial interests of broader audience, eventually lead to decreased signup conversion rate, investments and returns.

Similarly, Facebook’s employees and its users will experience reduced pleasure as their consumer rights have been exploited by the social media sites. Facebook’s employees will probably be an active Facebook user and will not receive extra benefits even if the company shares client files to external party. To highlight, Facebook currently has 2.3 billion of active users – the leakage of confidential personal information stored in social media server such as date of birth, postal address, credit card information and online banking credentials could cause serious harm to users.

Sharing of these sensitive data without consent could put billion of affected social media users at risks – this can range from identity fraud, bank fraud, family violence and more. Besides, data leakage may potentially breach the data protection obligations under local or international personal privacy law. All of the above will prevent Facebook from maintaining a sustainable business in the long run. Page 1 of 6

The below table utilise Bentham’s approach to quantify the increases and decreases in pleasure.

Facebook Investors Employees Scandal Victims Net increase in happiness

30,000,000 5,000,000 1,000,000 87,000,000 123,000,000

Decrease Decrease Decrease Decrease Decrease

Through predicting and calculating the happiness points of all relevant stakeholders, there is a net decrease of happiness if Zuckerberg decided to share client files to external party. Thus, the utilitarian analysis indicates that the proposed act is an unethical choice.

Case 1(b)

(6 marks)

Kant’s theory is a deontological approach that judges morality of an action based on its adherence to a rule regardless of outcome (James & Hales, 2017). The analysis defines an action to be ethical if it does not violate the two formulations of the Categorical Imperative.

The first formulation is to “act only according to that maxim hereby you can at the same time will that it should become a universal law” (Kant, quoted in Sullivan, 1989). The maxim of the proposed action is “I will engage in a business deal to make profits out of client files”.

This maxim can be universalised as follow: “everyone will engage in a business deal to make profits out of clients’ files”. If this maxim is applied, then all businesses would be no longer trustworthy, and “client files sharing” would become meaningless. Indeed, every person would become a customer at some point of their lives and they would not wish to be exploited by the bad will of businesses, especially when user data leakage could lead to severe damage such as identity frauds and bank frauds. The universalised maxim is self-contradictory and therefore fails the first formulation of the Categorical Imperative.

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The second formulation forbids a company from treating their customers “simply as a means and not respecting them as persons, as ends in themselves” (Shaw & Barry, 2010, p. 72). The practice of monetising customer information is disrespectful to humanity and appears to contravene this imperative. Zuckerberg was treating their clients merely as a means to achieve commercial gain and this therefore fails the second formulation of Categorical Imperative.

In conclusion, Zuckerberg’s act of making profits out of clients’ files would be unethical as it fails both of the formulations of Categorical Imperative.

Case 2(a)

(10 marks)

The four aspects of Aristotle’s approach to virtue ethics could be examined to apply in Zuckerberg’s case – (1) function, goals and the good, (2) flourishing, (3) the Virtues (or excellences), and (4) developing the virtues (James & Hales, 2017).

In this case, Zuckerberg participated in a Senate hearing because of his possible involvement with the Cambridge Analytica data leak scandal. Zuckerberg, as the CEO of Facebook, oversees all operations and business activities to ensure that they achieve the desired goal. To become a good CEO, he would need certain intellectual excellences as well as character-based virtues, and he would only flourish as a CEO and as a human if he develops these virtues or excellences.

The virtues or excellences that Zuckerberg would need to possess to become a decent CEO includes the intellectual virtue of knowledge and wisdom to run a successful social media business and achieve affluent return; he would also need to have character-based virtues such as justice, ambition, wittiness and honesty in order to run a moral and trustworthy business. A good CEO may also require creativity and perseverance to assist the business to stay competitive in the marketplace in the long run.

The case describes Zuckerberg as a workaholic who is insecure but with a sense of humour. During the hearing, he was well-prepared, organised and answered all the questions sincerely and intelligently, which achieved a mean point for certain intellectual and character-based virtues. However, his inability to prevent user data leakage illustrates clear evidence of overPage 3 of 6

ambition and confidence that he would not be investigated. Moreover, he underreacted and lacked the practical wisdom to avoid foreseeable risks associated with his act.

Zuckerberg has developed some of the above virtues earlier in his career when he launched Facebook in his college dorm room. While the competitive business environment in America allows him to develop some virtues, it appears that his surroundings were not sufficient for him to develop the virtues required to be a good CEO.

In conclusion, the case of Zuckerberg provides a useful example of how virtue ethics can be applied to a controversial business scenario.

Case 2(b)

(6 marks)

Kohlberg’s moral reasoning describes a stage of moral development through which a person progress as they mature in their moral judgements (Dellaportas, 2005).

Although there is limited information in the case regarding Zuckerberg’s moral reasoning, it is clear that Facebook has involved in the Cambridge Analytica scandal in the belief that there is a significantly low risk of detection. This suggests that Zuckerberg has not acted ethically to prevent the leakage of clients’ information as he believed it likely that he would get caught. This reflects stage one of Kohlberg’s theory where a moral agent acts in order to prevent punishment.

However, the case also indicates that Facebook has potentially utilised its clients’ personal information to upset the US election. Zuckerberg has also apologised several times for the mistakes he made. This reflects stage two of Kohlberg’s theory where a moral agent acts in his own interests. Despite Zuckerberg did not reveal his political beliefs, he might assist CA in utilising clients’ sensitive information to upset the election for his own interests.

Appling to the case of Zuckerberg, he did not concern about the impact of his action on others but only himself. With no evidence of any reasoning regarding community and universal

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principles, it appears that his moral reasoning lies no higher than pre-conventional level of Kohlberg’s theory, and therefore is more likely to engage in unethical behaviour.

Word count: 1244

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Bibliography

Dellaportas, S. (2005). Ethics, governance and accountability; a professional perspective. U.S.: John Wiley & Sons. James, N & Hales, S. (2017). Business law and ethics (2nd ed.). Milton, Qld: John Wiley & Sons Australia. Shaw, W & Barry, V. (2010). Moral issues in business (11th ed.). Belmont, California.: Wadsworth Cengage Learning. Sullivan, R. J. (1989). Immanuel Kant's moral theory. U.K., Cambridge University Press.

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