Background

Luke is an employee of the company ABC and is working on the plans of an entertainment

retail store in a certain neighborhood, which is the same one that Luke’s brother Owen lives

in. Owen wants to sell his plot in this neighborhood and is currently being offered a mediocre

price for it. He has approached Luke for advisement as to whether he should sell the plot now

or hold it off till later to get a better price. However, the company ABC has planned the

public announcement for the store a month later, which makes the plans confidential. Luke is

now in an ethical dilemma whether to tell Owen regarding the drop in prices subsequent to

the construction of the store and to advise him to sell it immediately, or whether to refrain

from disclosing this information lest it should create problems for the organization.

The Ethical Dilemma

Ethical issues in business occur when a decision, activity or scenario conflicts with the

organization’s or society's ethical standards. The ethical issue faced by Luke is caused by a

conflict between the two guiding principles of honesty (owed to his brother) and loyalty

(owed to his company). On the one hand Luke is restricted by nondisclosure; disclosing the

plans of the organization to build a store in Owen’s neighborhood might cause a violation of

information-sharing ethics on Luke’s part. As part of the organization, Luke has to be careful

about his ethical obligations to ABC as to not disclose information that could hurt the

organization.

This might also be reinforced through the company’s code of ethics or a nondisclosure

act, which further restricts Luks’s ethical boundaries. The disclosure of the plans might also

mean that Owen would likely share the information with his neighbors as well, and most

people in the neighborhood would start selling, which would cause a surge in prices and ruin

the company’s plans. Conversely, some or all of the residents could also hold strikes and
protest against the plans, both of which are damaging for ABC. It is also likely that

competitors will catch onto the news and could rival the plans of the company, thereby

decreasing their profits.

Hence, Luke is in a tough position with the company, since ABC has planned the

public announcement for the plans a month later, and Luke’s brother, being a part of the

public and likely to share it with the rest of the public, is not in a position to know the plans.

The information regarding the opening of the store is confidential, especially since its

disclosure might be useful to competitors or harmful to the company/customers. If the

company finds out that Luke made the disclosure, it could also jeopardize his reputation and

position at the company and might cause him to lose his job.

On the other hand, Owen has asked Luke for advice and by a canon of honesty, Luke

is in a position where he is ethically obliged to debrief Owen regarding the plan for the store

and how it would affect the prices. If he does not tell Owen regarding the drop in prices, he

would hold onto the plot and thereby would be less better off by selling it in the future. This

might aggravate the relationship between the brothers as well, as Owen is relying on Luke for

advice. Luke’s moral obligation is both not to lie to his brother and at the same time follow

the secret keeping regulations of the organization.

Analysis – The Four Ethics Theories

Utilitarianism:

This issue can be pragmatically approached form a utilitarianism viewpoint. The principles of

utilitarianism dictate that the ethical action is the one that maximizes utility. According to

classical utilitarianism, in any given situation, the action that produces the greater good for

the largest number of people should be chosen. Thereby, Luke should look for a solution that

promises a greater good or an increase in overall utility of society. To this end, Luke has to
weigh the utility derived from the different options of decision, and then choose the option

that creates the maximum utility for the largest number of people.

According to utilitarian principles, if Luke discloses the organization’s plan to Owen,

it will relatively increase Owen’s utility as he will be able to sell the plot at the better price, as

compared to selling at a lower price later on when the store is built. However, giving

complete information to Owen regarding the store can create an ethical dilemma as Luke

cannot ethically disclose this information. This is because in the slight chance that Owen can

disclose this information further to someone else brings in the chance of disclosure to some

party that could hurt the total utility that would be drawn from the project. Owen could share

the information with other residents of the neighborhood, which could lead to strikes or mass

selling, reducing the utility of ABC. In a way Luke has to weigh the utility of the firm ABC

against the utility of his brother, which makes complete nondisclosure the best plan of action.

Golden Rule:

The Golden Rule suggests treating other the same way one would want to be treated if they

were in a similar situation. Applying this to Luke and Owen’s scenario, if Luke leaked the

plans to him and helped him gain advantage from that, Owen would do the same for him in

the future. On the other hand, if Luke beholds the information and protects his loyalty to the

company, that will reciprocate on the company part by staying loyal to him. Loyalty could be

translated as a promotion or bonuses and many other potential advantages in Luke’s career.

As such, Luke will receive much more reciprocity as per the Golden Rule if he stay loyal to

ABC and not advise Owen to sell rather than if he were to share the plans with Luke.

Universal Ethics:
Another solution can be sought through Kant’s theory by applying universal ethics.

According to Kant, the ethicality of an action does not depend on its consequences rather on

its transcendent righteousness; one should take the action that can be willed to become a

universal law. This translates to a shared knowledge of what is right and wrong. Luke would

be stuck between the universal concept of honesty to Owen and loyalty to his company. By

this analysis, the conflict is highly unresolvable unless Luke figures out a way whereby, he

can maintain his company’s privacy and not lie to Owen. Luke can opt for disclosure, but

rather than lying about the situation, he can explain to Owen that as a part of a company that

has some interests in real estate opportunities, he is unable to advise his brother without

violating certain ethical boundaries.

Virtue Ethics:

Luke can use the way of Golden Mean and virtue ethics, which idealized virtue as the

midpoint of the extremes of excess and deficiency. By this logic, grounding his decision in

moral philosophy can be vary according to Luke’s cultural implications. On the one hand, it

is not moral to lie to Owen, but the larger moral principle incline towards nondisclosure, as

the plans are the company’s intellectual property and cannot be revealed. Thereby, the

solution by this logic would be similar to that through universal ethics: maintain the right of

nondisclosure owed to the company while not lying to Owen, rather explaining the principles

of nondisclosure to him.

Recommendations for Action

By utilitarian ethics, complete nondisclosure is the best plan of action for Luke. This is

because if Owen does not sell the plot, it would adversely affect just this utility or that of his

dependents (if any). Conversely, if the plans of ABC are negatively affected, it can create
negative repercussions for all of its stakeholders, customers and employees – which also

includes Luke. By this perspective, utilitarianism ethics hardly justify sharing the plans with

Owen in any way, as the greater good is most likely to lie with nondisclosure.

An important agent that Luke has to weigh the utility for is himself. Where does the

greater utility for Luke lie? On the one hand, his brother has asked him for advice on selling

and if he does not share ABC’s plans for the store with Owen, it could ruin their relationship

as brother when Owen eventually finds out about the plan a month later. He might also hold a

grudge against his brother for not telling him. However, the repercussions for Luke in case he

disrupts the company’s trust by telling Owen can be much worse – and Owen might as well

understand this and not hold a grudge after all. Luke could lose his job for the disclosure and

if nothing else might just get a bad name for sharing insider information, which can

significantly hurt his career. As such, even by standards of his own utility Luke is better off

not telling Owen anything.

Any adjustments that Luke can make around nondisclosure are line with high level of

risks. One particular way to go that can create an ultimately greater good for both Owen, the

company and Luke is that Luke can disclose the information to Owen on highly confidential

grounds with an agreement to further nondisclosure. This depends highly on the relationship

of the brothers and if Owen will actually hold up his end and not share the information that

Luke shares with him with anyone else. But this is risky, as Owen might not hold the

agreement or can even inadvertently end up sharing the news with someone else, or give an

indication to some other interested party that can affect the plans for the store adversely –

such an adjustment is too volatile to consider.

The other adjustment is that Luke can advise Owen not to sell the plot without

disclosing the plans for the store to him – but even this has its repercussions. In this way, he

will be able to make sure that the plans are not outed in any way and thereby behold his
loyalty to the company. He can also, in this way, ensure that his brother is better off, without

creating any ruckus within the local community or news of the store reaching the rivals.

Nevertheless, the notion that Luke is suggesting the selling option to Owen might create

implications that border on the line of disclosure of the plans, as Owen might be able to guess

that the company that Luke is working in is planning on a store. He can also still breach

confidentiality and share the information with others, who may also be able to infer that the

costs are likely to go down in the neighborhood. Such a situation is not so hard to infer, and

the utilitarian solution once again lies with nondisclosure.

As a utilitarian, Luke also has to consider the greater good, which includes the utility

of the buyer of Owen’s land. Even if Luke discloses the information to Owen in a

confidential way such that which ensures that he shares it with no-one else and safeguards a

secret for his brother, the person that would buy the land would be receiving a shorthand.

This is because she/he will be unaware that the prices are going to drop and are thus being

dealt lower utility at the expense of Owen’s improved utility. So even if Luke is somehow

able to ensure that the plans are safeguarded, he is not improving the overall utility as the

buyer of the land is being disadvantaged. Thereby, by utilitarian principles, there is hardly

any justification for Luke to share any information regarding the store with his brother.

Plan of Action:

 Luke should refrain from giving any advice to Owen and avoid nay disclosure

regarding the plans for the store.