Ethical Theories



MainIssues of the Case Study

Themain purpose of applying the ethical theories is to help individualsmake difficult decisions that involve more than one option. In thismemo, the universal ethics, utilitarianism, the golden rule, andvirtue ethics will be used to advise Mr. Luke on what he should doregarding the maintenance of confidentiality to the company andloyalty to a brother. From the case study, Luke is an employee of acompany known as ABC, and has been assigned a duty to oversee thedevelopment of a project for the construction of an entertainmentretail store for adults. The store will be developed at one corner ofthe neighborhood where his brother resides. Due to his role in thecompany, Luke is aware of the fact that the price of property in theaffected neighborhood will decrease once the retail store project isannounced. Owen, Luke’s brother, intends to sell his house at thepresent market value or wait for a better offer in the future.Therefore, the main issue is whether Luke should inform his brotherthat ABC Company intends to build a project that will result in asignificant decrease in the property prices in the neighborhood ormaintain confidentiality as required by the code of conduct.

Factsof the Case Study

Thedilemma that Luke is facing has two major facts that should beconsidered when finding the most appropriate option. The first factis that Luke is expected to behave in a confidential manner towardshis employer, ABC Company. The aspect of confidentiality is part ofthe code of conduct or ethic that all employees are supposed toobserve in order to protect the critical information about theiremployers’ investment plans. From this fact, Luke is expected toensure that the information about the development of a retail storewithin the next one month does not reach any outsider, includingOwen.

Thesecond fact is that Luke is expected to demonstrate a concern for hisbrother and protect him from any harm. From the case study, Luke issupposed to protect Owen from the harm of a financial lose that willonly occur if he is unable to access the information about thedevelopment of an entertainment retail store in his neighborhood.Owen will be able to sell his house at an offer that is fairconsidering the current market situation, if Luke informs him aboutthe impact of the retail project on the property price in theneighborhood. The two facts subject Luke to a dilemma of right versusright. The application of ethical theories will help Luke choose onealternative since both facts are right.



Utilitarianismrefers to a normative ethical perspective that emphasizes on thesignificance of taking actions that are most likely to maximize thewell-being of the majority of the stakeholders (Ng, 2014). A decisionmaker is supposed to measure the maximum utility of an action afterdeducting the suffering that the stakeholders will undergo. The firstcourse of action that is available for Luke as an employee of ABC isthe protection of the confidentiality. This decision will maximizethe well-being of the company’s management since it will confirmthat Luke is a trustworthy employee. It will also enhance thewell-being of Luke by helping him avoid the punishment (such as thetermination of employment) for leaking the company secrets. However,it will minimize the happiness of Owen, who will lose money afterwaiting for a better price for his house. Own will end up selling thehouse at a lower price once the retail store project is announced.

Thesecond course of action is to inform Own about the anticipatedproject. This decision might minimize the happiness of the managementof ABC and Luke. However, it will maximize Owens’ happiness sincehe will be able to accept the present offer, given the current marketsituation in the real estate sector. This course of action will hurtmore people and enhance the happiness of one person. Therefore, adecision to protect confidential information is the most appropriatecourse of action since it will maximize the well-being of themajority.

Universalethics: Categorical imperative

Thisperspective is founded on the assumption that the ethical basis ofactions can be determined by assessing whether they can be takenunder any circumstance (Agbude, Ogunwede, Agbude, Wogu &ampNchekwube, 2015). In other words, decision makers should not beinfluenced by emotions and subjective opinions when taking actions.In the case of Luke, it would be advisable to take a course of actionthat can be considered to be ethical irrespective of the underlyingcircumstances. In the first course of action, observingconfidentiality is an unconditional requirement that applies to allemployees in all circumstances. The second course of action,informing Owen about the anticipated project, is likely to beaffected by subjective opinions. For example, Luke is only likely toinform Owen about the project if he knows that he is likely to incura financial loss. Therefore, the second alternative is conditionaland subjective. These factors make the second option unethical underthe theory of the categorical imperative.

Thegolden rule ethics

Aneffective application of the golden rule ethics requires one to havethe knowledge and imagination. People are expected to imagine thatthe situation in which an individual is in at the moment wasreciprocated to them. Therefore, the main principle of the goldenrule ethics is that people are expected to treat others in the sameway that they would like to be handled in a similar situation(Tullberg, 2012). In the case of Luke, he is supposed to imagine howthe employer (ABC Company) and his brother (Owen) would expect to betreated in their present situations. The owners of ABC Company wouldwish to be treated in a way that demonstrates confidentiality. Owen,on the other hand, would wish that his brother treat him in anempathetic way.

Froma psychological perspective, the golden rule helps people empathizewith others. This suggests that the golden rule is founded on thecommonsense principles (Tullberg, 2012). In the present case,individuals have to imagine that they are put in the situation of acompany and Owen before making a decision on the alternative that ismost appropriate. It is common sense that everyone would wish to beprotected from economic loses that Owen is likely to suffer due toinformation asymmetry between him and his brother. By imagininghimself in the place of Owen, Luke should empathize with his brotherand inform him about the possibility of the property prices goingdown within the next one mother, following the announcement of theconstruction of the retail store. This decision is founded on theassumption that Luke would wish to be supplied with the informationthat will protect him from incurring losses in the future.


Virtueethics apply normative principles when addressing dilemmas. Thetheory emphasizes on the character of an individual as opposed toone’s duty to engage in certain activities or the consequences ofalternative courses of action (Grcic, 2013). The use of the term“character” implies that a single action cannot make someonevirtuous. A character trait should be well entrenched in the life ofan individual, which implies that it has to be part of one’s life.A virtuous decision maker should take certain actions because hebelieves that they are right. One should not be overwhelmed bypractical wisdom, attitudes, emotional reactions, perceptions,interests, and perceptions. Therefore, Luke should be more concernedabout the kind of person that he would like to be, instead offocusing more on what he should do.

Thereare three major virtues that should guide Luke in making the mostappropriate decision. First, a virtuous person is expected to betrustworthy. This virtue favors a decision that will result inprotection of the ABC’s confidential information since a virtuousemployee should be capable of being entrusted with the employer’ssecrets. Secondly, a virtuous employee should demonstrateprofessional honesty, which involves loyalty to the employer. Thisvirtue also favors an alternative that will result in the protectionof the confidential information about the anticipated retail storeproject. Third, the virtue of justice holds that a decision makershould treat all parties fairly, without personal bias, and with theintent of doing what would be considered to be right. This virtuerequires ethical decision makers to look at both parties via a veilof neutrality. Basing Luke’s scenario on the virtue of justice, itcan be argued that a decision to inform his brother is a personalbias because he would not tell a stranger in the same neighborhoodabout the anticipated project. Therefore, he is considering informinghim because he is his brother. Justice will only be done if Lukemaintains confidentiality.

Conclusionand Recommendations

Threeout of the four theories used to analyze Luke’s case support theidea that he should maintain confidentiality and avoid informing hisbrother about the project for the construction of the entertainmentretail store. By concealing the company secretes about the plan toconstruct a retail store in the Owens’ neighborhood, Luke will havemaximized the happiness of the majority of the stakeholders(including the ABC’s management), who are likely to be affected byhis actions. This decision is only likely to minimize the happinessof Owen, who will incur a financial loss. Under the theory ofcategorical imperative, every employee would be expected to protectconfidential information in all circumstances. This assumption leadsto a conclusion that Luke should conceal the information about theretail store project. Under the theory of virtue ethics, Luke issupposed to observe justice, professional honesty, and betrustworthy. These virtues lead to a conclusion that it would be moreethical to protect the company secrets than to inform Owen about theproject. However, the application of the golden rule would allow Luketo be emotional and take an action that will protect his brother.Therefore, Luke should avoid informing Owen about the project for theconstruction of an entertainment retail store.


Agbude,G., Ogunwede, J., Agbude, J., Wogu, I. &amp Nchekwube, E. (2015).Kant’s categorical imperative and the business of profitmaximization: The quest for service paradigm. Technologyand Investment,6, 1-11.

Grcic,J. (2013). Virtue theory, relativism and survival. InternationalJournal of Social and Humanity,3 (4), 416-419.

Ng,Y. (2014). Happiness,life satisfaction, or subjective well-being? A measure and moralphilosophical perspective.Nanyang: Nanyang Technological University.

Tullberg,J. (2012). The golden rule of benevolence versus the silver rule ofreciprocity. Journalof Religion and Business Ethics,3 (1), 1-21.