ETH557 Week 1 Written Assignment Ethical Dilemma

Week 1 Written Assignment: Ethical Dilemma

Name:

Institution:

Tutor:

Course:

Date:

TO: Assistant Controller

FROM: Chief Financial Officer

DATE: October 14, 2017

SUBJECT: Hospital Financial Crisis

The hospital, a tax-exempt, non-profit organization, provides valuable services to the low-income community, and is therefore an asset on which this community highly depends. The inability of this hospital to generate sufficient finances to ensure the continuity of its operations, without necessarily making any profit poses a threat to the existence of the hospital and is therefore an urgent matter that requires a solution. There is need to ensure that human resource, which the institution highly depends on, is adequately catered for in terms of remuneration, in order to prevent employee turnover. From the hospital’s published commitment to the public good of ‘model citizen, concerned with maintaining a superior level of patient care, safe workplace for its employees, and a pristine environment for its citizens’, the hospital management is not in a position to close down and leave the local low income community in suffering.

Failure to come up with a solution to this crisis may lead to disastrous consequences such as closure of the hospital, and an ailing low-income community. The actions in response to the crisis, all aim at income generation, to place the hospital back on its feet. All these actions may eventually lead to income generation for the hospital. However, there is need to consider each of these responses in terms of ethics, and in terms of the hospital’s published commitment to the public good. Some of the actions in response to the crisis at the hospital may not be ethically correct, while others may not conform with the published commitment to the public good by the hospital. For instance, plan number one suggests that the hospital hire a top kidney transplant surgeon to perform kidney transplants, and prioritization for recipients of the kidneys be based not on the urgency or severity of illness but on the financial abilities of the recipients. This may not be ethically correct for a non-profit organization.

Ethical theories are valuable in aiding professional judgment, when the institution is in such a place where there is need to make crucial decisions that influence the existence and operation of the hospital. These include the ethical theories of egoism, utilitarianism, deontological ethics, the categorical imperative and virtue ethics. The ethical theory of egoism describes that individuals ought to pursue their own self-interest . It implies that one becomes selfish, and in the case of this ethical dilemma, it may guide a professional to do anything in their ability to ensure that the hospital gets out of the crisis without putting into consideration the harm this brings on the community or other institutions.

The ethical theory of utilitarianism describes that something is right or wrong depending on the outcomes. These theories depend on the ability to predict the consequences of actions. It implies that a choice that provides the greatest benefit to the most people is ethically correct. This theory may provide guidance and may aid professional judgment especially in instances when the professional faces an ethical dilemma. In the case of the ethical dilemma in the hospital crisis, the theory of utilitarianism may favor a decision that favors the community that depends on the hospital, which in this case is the largest population.

Deontological ethics describes that individuals should adhere to their duties and obligations during decision making where ethics are in play. It implies that executing one’s duty to the society or to an individual is what is ethically correct. This theory may guide a professional in their judgment in decision making, such that the professional makes the decision based on their duties or obligations. The categorical imperative provides means by which individuals evaluate moral actions and make moral judgments. As described by Immanuel Kant, the categorical imperative is the unconditional moral principle that requires that an individual behave in accordance with universal maxima which respects persons as ends in themselves, and the obligation to do one’s duty for the sake of the duty and not in pursuit of further ends. This ethical theory guides the professional during decision-making by demanding that the professionals do not work by their own biases, but by respecting the dignity and autonomy of every individual. Virtue ethics describe that the character of an individual is the key element of ethical thinking as opposed to rules about the acts themselves or the consequences of these actions. This means that this theory judges a person by their character rather than their actions. The theory of virtue ethics aids in professional judgment during critical moments in any business organization or institution.

The actions proposed to solve the crisis at the hospital, vary greatly with respect to the ethical theories described above. The first proposal according to plan number one, is in accordance with the theory of egoism, as it only puts into consideration the need for the hospital to generate income, without considering that the people who are severely ill and need the kidney more urgently as compared to the wealthy who may live longer without the kidney. This plan also fits into the deontological theory, as it proposes a practical way through which the hospital can generate income to solve the crisis. The management performs its duty as required by the deontological theory through this way. Plan number one does not conform to the theories of utilitarianism and categorical imperative. This plan does not work for the common good of the community which makes up most of the population affected by this crisis, and is therefore not in accordance with the utilitarianism theory. The plan towards ensuring that the hospital generates income to solve the crisisis created out of bias towards the low-income community and does not respect persons in the community who depend on the hospital. This is not in accordance with the requirements of the categorical imperative theory by Immanuel Kant.

The second proposal according to plan number two is in accordance with the theories of egoism, deontological theory and virtue ethics. This is because the plan to auction kidneys enables the hospital to generate income, enables the management to perform their duty of ensuring that the hospital generates income, and relies on the character of an individual in order to succeed. It however does not conform to the theories of utilitarianism, as it is not favorable to the low-income community, which forms majority of the population and is created with bias against this population, with selfish interests to create income for the hospital as the low-income community suffers.

The third proposal according to plan number three is in accordance with the theories of egoism, utilitarianism, categorical imperative and deontological ethics as it proposes ways through which the hospital can generate income for itself, enables management to perform their duty of generating income and works for the interests of both the hospital and the low-income community. This plan however, does not conform to the theory of virtue ethics as it prompts some individuals to act against their character, and what they believe in. not every individual wills to donate their organ. The fourth proposal according to plan number four fits in the theories of egoism and deontological ethics as it enables the hospital to generate income and enables management to execute their duties. It however fails to conform to the theories of utilitarianism, categorical imperative and virtue ethics as it acts against the will of the most people in the community, prioritizes the wealthy and prompts some individuals to act away from their character and beliefs.

The plan number one proposed fails to conform to the fundamental principle of objectivity required by the code of ethics for professional accountants as it promotes bias against individuals of low income who may not afford the kidney transplant services. It is a breach of the requirement of the professional accountant to act in public interest. The plan number two involves creation of a website to auction kidneys by donors and the hospital charging a service fee, then paying a nominal fee to the service provider. This action may not be consistent with the accountancy code of conduct, specifically, the fundamental principle of professional competence and due care. This is because, from a professional accountancy point of view, the plan may not lead to the achievement of the goal to generate income. The plan number three and plan number four are both inconsistent with the fundamental principle of integrity according to the accountancy code of conduct, which require the accountant to be straightforward, honest and truthful in all their dealings. The plan to coerce patients to donate their kidneys in exchange for emergency services and the plan to offer kidneys from deceased patients to wealthy donors are both neither straightforward or truthful.

References

Birsch, D. (2013). Introduction to Ethical Theories: A procedural Approach. Waveland Press.

ICAEW. (2017, October 14). Code of Ethics: A General Application of this Code. Retrieved from ICAEW Website: www.icaew.com/membership/regulations-standards-and-guidance/ethics/code-of-ethics-a

Melden, A. (2013). Ethical Theories. Read Books Limited.