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Introduction
Ethical decision-making in business is a matter of active debate nowadays, given the multiplicity of different scandals and crises that arise within the economic environment. Managers, especially those belonging to decision-making teams, have to thoroughly think about many elements of their organizations activity and surroundings, such as its reputation, commercial profits, and further development. It is almost impossible to do business in a way that would completely satisfy everyone, including the organizations owners, government officials, consumers, and those people who are affected by the companys activity in one way or another. Thus, companies managers often confront ethically controversial situations, and their chosen course of action may result in an unethical decision. This paper is a reflection based on observing an unethical decision made by Apple Inc. to avoid taxes. I learned from observing that situation that a simple desire for profit can force managers to make unethical decisions, and one of the primary purposes of business ethics is to ensure that ordinary people do not suffer from organizational business activities.
Apples Irish Subsidiary Case Analysis
The case of tax avoidance in Apple was related to the profits gained from its Irish subsidiary. According to Dine (2019), this branch of the company made 16 billion euros, yet the tax for that amount of money was only 50 million in Ireland. The corresponding financial scheme is relatively simple: a multinational organization can provide its foreign subsidiaries with legal instruments that enable tax avoidance, providing the company with lawful but unethical tax loopholes (Dine, 2019). Therefore, being an international firm, Apple is protected from external influence on its tax affairs on multiple levels, meaning that the government of any country where the organizations subsidiary is situated cannot actually control the companys tax flow.
There are various reasons a firm can choose to avoid paying necessary taxes and seek ways to reduce the amount of money that must be given to the government. Aksiana and Sujana (2019) argue that the factors that have the most substantial influence on the level of tax avoidance in companies are the level of risk preference, professional dominance, information current, and professional relations (p. 175). Those aspects may seem reasonable, but I believe that the primary goal of any commercial organization is making money, which means that all decisions made within that organization aim to increase incomes and decrease expenses. Moreover, if Apple were to pay their Irish taxes without exploiting any loopholes, the amount of money the company would give to the government would still be considerably low, meaning that the firm did not even have a substantial reason to avoid tax paying. Apple tried to save as much money as possible using all available tools, making me think that humans greed is endless.
Furthermore, Apples decision in the case under discussion is unethical as it may have made ordinary people suffer the consequences. Etzioni (2018) provides evidence that the company cares more about its business success than citizens: the firm refused the FBI request supported by the court to decrypt a known terrorists phone. Although tax avoidance probably cannot cause an equal amount of destruction compared to terrorism, paying them is still relevant to peoples well-being. Tax money is used to develop the country and maintain its well-being, meaning that tax evasion directly affects the citizens, which I find selfish and inappropriate.
Several ethical frameworks and concepts can be related to the case under discussion. The first of them is Rests model, which indicates that the primary starting point of working with an ethical decision-making issue is recognizing its existence (as cited in Valentine & Godkin, 2019, p. 279). However, Apple seemed to recognize the ethical problem while avoiding tax-paying, and I believe that the companys managers consciously chose to make an unethical decision. Nguyen and Crossan (2021) discuss another concept, namely a virtue-based orientation: researchers suggest that ethical decision-making can be enhanced through virtuous means. Nonetheless, based on the details of the Irish subsidiary case and other relevant information gathered during this research, I do not see Apple as a virtuous organization, meaning that this framework also cannot be applied to improve the ethical side of the decision-making process of this particular company.
Although business ethics is widely explored, it does not seem easy to identify an appropriate theoretical model that could improve Apples ethical decision-making process. Contreras et al. (2021) suggest that the importance of ethical practice is increasing nowadays. Klopotan et al. (2020) support that idea, emphasizing that business ethics has been under the spotlight of not only academics and scientists but also business practitioners and professionals for the last decades (p. 32). However, it seems that such a major organization as Apple can ignore basic ethical principles and act in its best interests.
Conclusion
Summing up, Apples Irish subsidiary case shows me that people can cross any borders chasing profit, and the subsequent unethical decisions can seriously harm ordinary people. Based on the case-related evidence, I think that business ethics is a highly controversial phenomenon, and there is no simple way to enhance a companys ethical decision-making. However, I feel that the main issue related to business ethics is not its inconsistency but humans infinite greed, which makes them put commercial profits over morality sooner or later.
References
Aksiana, I. B. W., & Sujana, I. K. (2019). Effect of risk preference, professional domination, information, and professional relationship on ethical decision making of tax consultants. International Research Journal of Management, IT and Social Sciences, 6(4), 174-179. Web.
Contreras, B. P., Hoffmann, A. N., & Slocum, T. A. (2021). Ethical behavior analysis: Evidence-based practice as a framework for ethical decision making. Behavior Analysis in Practice, 1-16. Web.
Dine, J. (2019). The three shades of tax avoidance of corporate groups: company law, ethics and the multiplicity of jurisdictions involved. European Business Law Review, 30(1), 149-181.
Etzioni, A. (2018). Apple: Good business, poor citizen?. Journal of Business Ethics, 151(1), 1-11. Web.
Klopotan, I., Aleksi, A., & Vinkovi, N. (2020). Do business ethics and ethical decision making still matter: Perspective of different generational cohorts. Business Systems Research: International journal of the Society for Advancing Innovation and Research in Economy, 11(1), 31-43. Web.
Nguyen, B., & Crossan, M. (2021). Character-infused ethical decision making. Journal of Business Ethics, 1-21. Web.
Valentine, S., & Godkin, L. (2019). Moral intensity, ethical decision making, and whistleblowing intention. Journal of Business Research, 98, 277-288. Web.
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