Ethics in SA and JBS

The Wall Street Journal article "Business Partners Back Away from JBS Amid Bribery Scandal" goes into detail on the fallout from the Brazilian bribery scandal that affected the meat industry behemoth JBS ( Magalhaes, 2017). In the most recent development, the business's partners—including its clients, investors, and contractors—are ceasing to support it. According to reports, in the wake of the firm's corruption scandal, supermarkets and restaurants no longer buy products from the company or are considering doing so. Organizations like banks have resorted to tightening financing criteria for JBS, while affiliate firms like Petroleo Brasileiro SA canceling their contract with the company.
The woes that have rocked the company in the recent days is as a result of their engagement in corruption to boost its sales and stretch its financial muscles across the Brazil and the globe. Apparently, Joesley Batista, the former head of the company admitted to paying millions to the current President of Brazil, Michel Temer, and two of his predecessors Dilma Reussedd and Luiz da Silva, to receive favors such as loans from state development banks and subsidized financing. In addition to that, the company met and bribed nearly 2,000 politicians over the last ten years to receive political and financial support. These included receiving subversion in meat inspection and plants, and overlooking sanitary practices: They thus processed rotten meat and ran plants tainted with traces of salmonella. Through these illegal dealings, the company transformed itself into one of the largest meat packers in the world.
On March 22, 2017, an investor of the company filed a Securities Class Lawsuit accusing the company of failing to comply with the food safety and participating in unethical business practices (Moussako, 2017). Moreover, the complaint alleged that the company failed to disclose the illegal dealing in the company and the unethical practices to the stakeholders. In Brazil, the company will have violated the Clean Companies Act – an anti-corruption act – if found guilty of the charges.
Moral Theories and Ethical Principles
When one is faced with a particular ethical problem or dilemma, he/she engages in ethical reasoning. That is, he/she goes through a reasoning process in which he/she links his/her moral views to the situation he/she is facing. In business, as well as day-to-day life, individuals are forced into making a decision by deciding what is right and what is wrong in a particular circumstance. In relation to that, there are two basic ethical approaches, the duty based and the outcomes based ethical standards of reasoning (they can be classified as either deontological or teleological point of view). The Deontological ethical system is based on the notion that how and why one does something is more important that the results of the action. If the action was made with good intentions, then the outcome of the action if ethically sound. On the other hand, the teleological ethical system is based on the belief that the consequence of an action or behavior is all that matter. If an action produces a good result, then it is ethically sound regardless of the action (whether it was good or bad).
There are four ethical theories; the rights theory, the utilitarianism, justice theory, and the principle of profit maximization (Mallor, Barnes, Bowers, & Langvardt, 2013).
Rights Theory
The rights theory comprises of a number of ethical principles that hold the human rights as the fundamental right that must be respected by every human being. In that, every human being has “a moral compulsion not to harm the fundamental rights of others” (Mallor, Barnes, Bowers, & Langvardt, 2013, p. 96). One of the principles of the rights theory is the Kantianism.
Kantianism: Immanuel Kant, the founder of the principle view humans as moral actors that act on free will. He believed that any human being is able to make judgments on the morality of an action by applying what he called the categorical imperative. One categorical imperative formation is that one ought to act in a rational way that would be rational to all people in the world. Second, one is to act and treat others in a way as a means and not an end.
Justice Theory
The justice theory, coined by John Rawls in his 1971 publication A Theory of Justice, is the philosophy that underpins the bureaucratic welfare of a state. Under the theory, Rawls reasoned that it would be fair for the government of a given state to redistribute wealth so as to help the needy and the poor in the society. This action would result in a better sociological benefit to the society as a whole. In application to the business environment, the Justice Theory requires that the decisions made by the business would be guided by impartiality and fairness. When making the decision, the business executives need to decide on the people or entity that is most in need of the allocation of a certain resource.
Utilitarianism
Utilitarianism acts on the principle that any decision made should be based on maximizing utility for the society as a whole. That is, “achieving the highest level of satisfaction over dissatisfaction” ((Mallor, Barnes, Bowers, & Langvardt, 2013, p. 96, p. 98). In utilitarianism, common sense is determined by a cost-benefit analysis. For a decision to be morally right to a utilitarian, it must cause happiness to the greatest number of people, or satisfy more people than it dissatisfies. In business, a decision by the management or the entity must ensure that it brings about satisfaction or happiness to the greatest number of people.
Profit Maximization
As an ethical theory, profit maximization requires that any decision made in a business be based on maximizing a business’s long-run profit within the limits of the law. The sole objective for the decision makers is maximizing the profits of the businesses so long as the business does not break any law. Since the theory focusses on results, it lies under the teleological principle, and decision makers thence should focus on maximizing profits both personally or for the organization they are working under.
Application of Utilitarianism to the JBS Situation
Ethical Issue
Corruption and Bribery rarely pass the utilitarian examination of the social welfare and the perspective of welfare-base ethics. Utilitarianism perceives that an action is morally permissible if the results of the action create more benefit that cost, more happiness than sadness, and more pleasure than pain. When examining corruption and bribery in a utilitarian perspective, we question whether these actions produce the ultimate good when they happen. That is, whether the acts of corruption and bribery result to a greater pleasure to a greater number of people.
It is evident that by bribing officials and involving themselves in corrupt activities spurred JBS into a business empire in the country. By aligning themselves with influential politicians as well as the president, the Joesley Batista and other executives of the company got favors in return. In addition to that, they were given free passes as well as illegally subsidized loans. These flavors and influences propelled their profits and the company into a giant in no time. While the company grew, the investors enjoyed profits, and the executives of the company maximized the profits of the company, the end result of their action was illegally dominating the market through unethical competition.
Acts of corruption and bribery can barely result in a greater good to a greater number of people. They represent an equilibrium without paret0 efficacy. That is, their actions cannot reach a point where there is a greatest possible overall good for the greater number of people. As seen, only a small group of people benefited from such acts; the executives, and JBS. Moreover, corrupt dealing erodes the trust between an individual and another. In this case, the investor filed a Securities Class Lawsuit accusing the company of failing to comply with the food safety and participating in unethical business practices. This acts is an example of lost trust.
Solution
To maximize welfare and to develop a situation that can bring about the greatest good to the greatest number of people, the company could employ various means under the utilitarian ethical perspectives. The solutions to such ethical means will ensure that the company is not caught up in such scandals and allegations in the future, and thus, built a trust with the people involved with the company. First and foremost, the bribing is unethical because it does not cause the greatest pleasure to the greatest number of people, and so is corruption.
Since the Batista, the leader of the company that started all the mess, is no longer in the company, then the company needs to change its code of conduct. In that, it should abide by the law and let the legal system conduct the investigation and implicate whoever is caught in the web of the allegations. Through this, the greater good would be cooperation and expulsion of a corrupt member of the company. The executives of the company should also produce the evidence that will implicate these people.
In addition to these solutions, the company should show good will by making sure that their products are clean and nothing shady goes on in the plants. While the company aims at maximizing profits, it should do so under the confines of the law. When they reform their moral codes of conduct and follow the laws of the country, the company will act in an ethical manner, and with time people will follow suit.
Conclusion
It is unfortunate that through these acts that company managed to build itself and develop into a giant in the meat packing industry. Through the utilitarian perspective, their actions are deemed unethical. Corruption and bribery results to pain to a greater number of people, in this case, the consumers, the investors, and the meat industry as a whole. Using the acts of reforms, the company can reclaim its image and use ethical means to establish itself and gain back its reputation.






















Works Cited
Mallor, J., Barnes, A., Bowers, T., & Langvardt A., (2013). Business Law: The Ethical, Global, and E-Commerce Environment (15th ed., pp. 92-120). New York, NY: McGraw-Hill/Irwin.
Magalhaes, P. (2017). Business Partners Back Away From JBS Amid Bribery Scandal. WSJ. Retrieved 11 June 2017, from https://www.wsj.com/articles/business-partners-back-away-from-jbs-amid-bribery-scandal-1496952292
Moussako, A. (2017). Investors Hit Meat Processing Co. Over Bribery Concealment - Law360. Law360.com. Retrieved 7 June 2017, from https://www.law360.com/articles/905191/investors-hit-meat-processing-co-over-bribery-concealment