Ethical Analysis free essay sample

Ethical Issue Based on this case study, the ethically dubious behaviour exhibited by the NKF is that the fund-raising strategies and tactics were too aggressive and the organization is not fiscally responsible. These marketing practices distort and demean the aim of a charity organization and give the public the perception that it is all for the patients’ benefits while the top management actually made use of the public’s empathy and overspent the funds on administrative and marketing activities. The lack of transparency of how the raised funds are distributed in the organisation to help the patients and the lack of intervention of the government resulted in such perquisite taking actions. Ethical lapses undermine the trust the public holds in the entire organization. As such, the ethical issue present is that misuse of raised funds. To examine this issue in detail, the ethical principles of utilitarianism, deontological ethics and the conventional approach will be considered. Key Stakeholders In this case, the key stakeholders involved are CEO Durai, donors and patients. The CEO is concerned about raising more funds. By various ways of marketing and branding the non-profit organization aggressively, there is a significant increase in the number of donors, increasing the funds raised and accumulating more reserves. Under the leadership of Durai, there is no doubt empire building in the organization given that there are ’48 departments reporting to the CEO’. Donors want to make sure that their donations are spent on the right areas, especially those with low incomes. While donors make donations to the NKF organization, they may derive other benefits from their contributions such as tax-deductible donations, self-satisfaction, publications and enhance reputation. Patients are supposedly the sole benefiters in the situation since the NKF is set up to help them. Yet, they may not receive as much benefits as they are promised because the organization tends to focus on the administrative and marketing sectors as well as the fact that CEO is involved in perquisite taking. Theoretical Perspectives The principle of utilitarianism is a moral principle that holds that the morally right course of action in any situation is the one that produces the greatest balance of benefits over harms for everyone affected. In this context, when Durai markets the non-profit organization to the public, it is easier to persuade the public to make their donations, leading to higher funds raised and generating positive utility. However, kidney patients who need more subsidies for the kidney treatment benefit less since more money was channelled to other areas and thus they suffered negative utility. When considering total utility in this situation, personal target of CEO is not as important as the treatment for kidney patients as health is one of the greatest assets. Hence, negative utility outweighs positive utility generated, thus from the utilitarian perspective, such actions are unethical. Deontological Ethics states that a decision or action is only deemed ethical if it conforms to moral principles. In this context, the CEO is morally unethical since he worked based on his self-interest instead of that of the kidney patients. He was involved in perquisite taking as shown by the golden toilet and financial discrepancies in the account. It morally wrong to gain advantages from a non-profit organization that started with the aim of helping kidney patients. The conventional approach holds that individuals should compare their decisions or actions against the norms of acceptability in his society before reaching a decision. In this case, the degree of marketing NKF as a product to earn highest possible revenue should be compare to that of the other non-profit organizations in Singapore. However, the extent of such actions is uncertain. If it is a norm for charity organization to publicise through TV shows and dramas aggressively, their actions would be ethical from the perspective of the conventional approach. If not, it would be deemed unethical. Uncertainties There are three major uncertainties in this situation. Firstly, there is a the question of whether donors should completely rely on the series of mass media initiatives ranging from its popular live TV variety shows, television dramas and community outreach programmes. Although these initiatives enabled the NKF brand to spread deep into the suburban heartlands of Singapore, ultimately the donors should make sure they fully understand how the funds are distributed to help the kidney patients before making their donations. If they are unsure of the distribution due to the low level of transparency in the budget process of NKF organization or cannot verify the information given by the NKF management, it is their responsibility not to make their donations. Secondly, it is uncertain to what extent it is a common practice across most of the major non-profit organizations in Singapore to market their organization aggressively though media and all the possible channels. If most of the organizations do so, this action would be ethical from the perspective of the conventional approach. Conversely, if a minority of the charities do so, the conventional approach would deem the action unethical. Lastly, there is uncertainty based on the theory of distributive justice. It assumes that individuals form judgments about the propriety of rewards allocations based upon social comparisons across individuals. In this context, different individuals in the organization has different responsibilities, but since there is no basis of comparison, money and reward are not meted out properly and thus issues of distributive justice arise. Conclusion From the perspective of utilitarianism and deontological ethics, the act of aggressive marketing to benefit CEO’s self interest and ambitions is deemed to be largely unethical while analysis using the conventional approach explained that there are uncertainties involved. Not only should the fundraising materials and solicitations be honest  but the organization should use the funds for the purpose specified before the donation was made. Government should also be blamed for poor judgment and dereliction of duty as a watchdog of NKF organization that handles so much public money. Before making a donation, the donors should have the basic knowledge of the distribution of the funds within the organization and not rely on all the media publicity and attractive prizes. Hence, it should be concluded that aggressive marketing practices are unethical since these has transformed the non-profit organization into one that earns revenue from the public’s empathy.