Carson's Argument Essay

In his paper, Carson points out 4 main arguments that we can derive from the recent corporate scandals (e.g. Enron, WorldCom). The arguments pointed out revolve around the flaws and inadequacy in current business approaches such as the stakeholder theory, shareholder theory and incentives system in corporations currently. In my response paper, I will make use of ethical theories such as Kantian ethics, Utilitarianism, Rawl’s theory of justice etc. to analyse the arguments made in the paper and to evaluate if some of the corporate acts mentioned in the paper are ethical.

Weaknesses in Stakeholder Theory
Carson pointed out that one of the most evident flaws in the stakeholder theory is that it is not does not show that fraud and deception
According to Mill’s Greatest Happiness Principle, the act needs to be evaluated based on the overall happiness versus pain of the whole community which in this case would be the various stakeholders of WorldCom. Indeed, cooking the books might bring about short-term pleasure for the shareholders and employees as they not only get to stay in their jobs, they enjoy higher pay also. However, these pleasures are only short-lived, sanctions and adverse effects may flow from deviations of the Greatest Happiness Principle. This means that the act will bring about far greater pains when they still eventually lose their jobs and pay in the long run. The total amount of pain is exemplified by the remorse and attacks on the conscience of Bernie Ebbers investors who are deceived into investing in WorldCom losing their investments, the auditors involved who might possibly lose their jobs for not spotting the errors and also the whole business community in general as people begin to lose confidence in credibility of companies which might cause a slowdown in the economy. Therefore, under the Greatest Happiness Principle, this act brings about far greater and prolonged pains than happiness thus should be deemed