Alison Lloyd Case, from the four different theoretical perspectives:
(In each case I give what I think a good answer looks like, and then add some explanation about common pitfalls to be avoided.)
Alison Lloyd Case
(adapted from John R. Boatright, “An Auditor’s Dilemma,” Ethics and the Conduct of
Business , 4 th
ed., Prentice-Hall, 2003: 68 – 69.)
Alison Lloyd was the new internal auditor for Gem Packing. As such, she was responsible for verifying all company expenditures. One day, she noticed an invoice from Ace Glass, which supplies the jars Gem uses to package its jams and jellies. The puzzling thing was that the invoice was for July and August deliveries that had not yet been made; today was June 10 th . She recalled seeing other misdated invoices recently, but since they had been for comparatively small amounts of money, she thought little of them. This one, however, was for $260,000.
So she questioned Greg Berg, the head of purchasing, about it. Greg explained that many employees in the jam and jelly division received substantial bonuses for meeting the division’s quota in pretax profits for the fiscal year ending on June 30. The quota is set by corporate headquarters, and meeting it is weighted heavily in annual evaluations. There’s no incentive, however, for exceeding the quota. In fact, exceeding the quota will likely result in a much higher quota for the following year. Greg explained that several years ago, after the year’s quota had been met, the jam and jelly division began prepaying expenses for the following year, so as to make the following year’s quota easier to meet. The sales team started helping out by sometimes delaying orders or falsifying delivery dates. Regular suppliers like Ace Glass understand the system; since
Gem is one of its most important customers, it is willing to play along. As a result, the jam and jelly division has an easier time making its quota every year. Greg says that he suspects other divisions are doing the same thing, and that headquarters doesn’t seem to have figured out what’s happening.
Alison now has a decision to make. If she refuses to go along and pay the invoice early, it seems certain that she will have the entire jam and jelly division mad at her. She will ruin their scheme and they’ll have a harder time earning their bonuses and promotions. “Who’s being hurt?,” she thinks to herself – “it’s only a little paper shuffling.” On the other hand, the code of ethics of the Institute of Internal Auditors requires members (such as herself) to exercise “honesty, objectivity, and diligence,” in their duties. It requires loyalty to the employer, but specifies that loyalty does not include being a part of “illegal or improper activity.” What should she do?
AU
From the Act Utilitarian perspective, Alison has an obligation to maximize net utility for all who are affected by her actions. In this circumstance, Lloyd would be wrong to go along and pay the invoices early. She has two possible options to consider: paying the invoices early or refusing to do so. Suppose she pays the invoices early. The sales staff

is obviously benefiting by continuing to meet their quotas, as well as their families, but it also costs the company money to pay these bonuses, which is money out of the shareholder’s profits. Alison may well have pangs of conscience at violating her professional code of ethics, which is a negative. But there are two further big negative consequences. By agreeing to the scheme and helping the sales folks out, she’s really hurting the company - the sales force presumably will not be doing their jobs as aggressively as they would were they not able to meet the quotas so easily. Further, there is the chance that the scheme is discovered. Even if the chances of this happening are not great, the consequences would be potentially disastrous for Alison’s career, the livelihood of those taking part in the fraud, and so forth. The impact on Ace Glass seems fairly small either way, though it can benefit some by getting paid early. Suppose, on the other hand, that she refuses to go along. Obviously this hurts the sales staff as far as their bonuses are concerned, but in the long run at least, it seems that being on the up and up with respect to yearly sales and expenditures would work to the company’s benefit. We could expect Alison to suffer some at the hands of those who are chagrined by her honesty, but she at least would have a clean conscience about the matter. Even if Greg
Berg or someone like that tries to make her life miserable, that seems to be a fairly small thing considering the larger impact on the company’s operations. It doesn't seem that her decision will have much of an impact on consumers and other businesses, but if it did, those consequences would be relevant too. At any rate, it seems the overall consequences of paying the invoices early are worse than the consequences of not doing so.
Explanation:
1) In reality, Alison has more than the two options considered. She could agree to go along this time, but tell people she will never do it again, she could refuse and promise to remain silent about it, she could refuse and promise to report the scheme to upper management, and so forth. We’ll stick to two here, because churning through the consequences of all the possible options is quite cumbersome.
2) Notice that the violation of Alison’s code of ethics is not itself a consequence of paying the invoices early, it’s part of what she does by paying the invoices early. But breaking the code may have consequences for her, such as her pangs of conscience, the chance she is caught and reprimanded, etc., and these consequences will matter for AU.
3) Notice also that the relevant consequences are not just those we can expect for
Alison and the sales staff - we must consider the impact on the company as a whole, family members, consumers and other businesses, even if it may be difficult to accurately assess the impact of a decision like this well down the line. It all matters for AU – that’s the point.
RU
From the Rule Utilitarian perspective, Alison would be wrong to go along and pay the invoices early. One possible rule to consider would be this: internal auditors should always follow honest accounting practices. Another is: internal auditors should do whatever they can to help the sales staff meet their quotas. Now compare the consequences of these two rules (by imagining that each was generally followed). In the world where everyone followed the first rule, there would be some bad consequences,

because sometimes fraudulent accounting practices can help people, at least in the short run, as it seems it would in this case. But the overall consequences of the first rule would be very positive, since honest accounting is crucial to the successful operation of businesses in many ways, e.g., recruiting investors, the ability of managers to know how to spend the company’s resources, and so forth. And all of these are relevant to how well the overall economy functions and the total balance of happiness vs. unhappiness. If the second rule - “internal auditors should do whatever they can to help the sales staff” - were generally followed, not only would the long- term health of companies be adversely affected, but it is doubtful even that sales staffs would benefit much. The whole practice of tying bonuses and the like to sales results would become suspect, without honest accounting to verify the legitimacy of the records on which such policies are based.
Without the possibility of bonuses, many people might become less productive, etc.
Explanation:
1) The crucial part here is coming up with some rules, imagining that everyone (or virtually everyone) follows the rules, and then comparing the consequences. For a successful Rule Utilitarian analysis, you must show why this or that rule is the one with the best consequences. Of course there are many possible moral rules that bear on
Alison’s situation - company policies, the law, rules in accounting codes of ethics, and others that we just make up. Rule Utilitarianism says one morally ought to follow whichever rules are such that if generally followed, they would have the best consequences overall. So you can’t simply show that an action breaks some rule or other and conclude that the action is wrong according to RU - you have to show that the rule you focus on is one that plausibly would have better consequences than the alternatives.
Since there are almost countless possible rules bearing on any situation, we need to simplify, and that’s why above I just compared the consequences of two different rules, one that would condone paying the invoices early and one that would not.
2) Along similar lines, people often get confused by the idea that you must conform to that set of rules the general acceptance of which would maximize the balance of pleasure over pain. People sometimes take “general acceptance” to mean that RU is saying you must conform to generally accepted rules. That’s not right. The problem is that you can’t just assume that the rules people generally follow are the rules that really would have the best consequences if generally followed. We stipulate that the rules we are imagining are generally followed, because rules that are widely ignored would have little impact either way.
3) Both AU and RU are concerned, ultimately, to maximize net good consequences - the difference comes in whether we consider the consequences of a particular action or the more general consequences of a certain kind of behavior (everyone following a rule).
For a successful RU analysis, you need to make it clear that you’re looking at the consequences of everyone’s following the rules, not just the effects in this particular case.
Formula of Humanity (Respect for Persons Principle)
From the perspective of Kant’s second formula of the Categorical Imperative, the formula of humanity as an end in itself, Alison would be wrong to pay the invoices early.
In doing so, she would be deceiving her superiors - those people who are tricked into

paying the bonuses by this scheme - and using them merely as a means to help the sales staff. She does not violate the humanity of the sales staff, because they know about the scheme and approve of it, nor does she wrong those at Ace Glass who are also willing participants. But as for the people who are being deceived, she is failing to treat them as ends in themselves by hiding the facts about what is going on from them.
Explanation:
1) FH is often the easiest to apply. You do need to make clear who (if anyone) is being used merely as a means, and why. Respecting people as rational beings usually means being honest with them, so that others can make rational decisions based on the truth, which is why paying the invoices early violates FH. Other cases, of course, may involve treating people as mere means in different ways, e.g., coercing them, manipulating them, harming them, and other ways of treating them that amount to ignoring their status as autonomous choosers, that is, their right to decide things for themselves.
2) THERE’S NOTHING WRONG WITH TREATING PEOPLE AS A MEANS! You do it all the time - listening to me jabber as a means of passing the course, for example.
What’s wrong is treating people merely as a means, with no respect for what they are owed as persons. This is a very important distinction, and I’ll be looking for you to be aware of it.
3) Technically speaking, there's nothing wrong with treating a company merely as a means, because a company is not a person in Kant's sense (even though companies are considered "artificial persons" for legal purposes). That's why, above, I said that by paying the invoices early, Alison would be wronging her superiors, not wronging the company itself.
Ross
From the perspective of Ross's view, it would also be wrong to pay the invoices early.
Ross's list of prima facie duties (fidelity, reparation, gratitude, beneficence, non-injury, justice and self-improvement) suggests that prima facie, Alison has duties both to pay and not to pay the invoices early. First, the moral argument against paying the invoices early is that: 1) she has a duty of fidelity to abide by the Internal Auditors' code of ethics
(particularly if we think that membership in this organization involves something like a promise to obey the Association's code of ethics), and also a general duty of truthfulness
(fidelity) to follow honest accounting practices; 2) a duty of justice to her employer not to put the company "on the hook" for bonuses and promotions that are undeserved, 3) a duty of non-injury not to harm shareholders and others who may be harmed if the company has to pay for undeserved bonuses and promotions. (One could also make a case here that the duties of gratitude - gratitude to her employers - and beneficence are also relevant.) On the other side, she also has a moral reason to pay the invoices early, principally, a duty of beneficence (to help out those in the jam and jelly division who are helped by the scheme). (I suppose one could also argue that the duty of justice is relevant here - you could argue that it is unfair to employees in the jam and jelly division who had been expecting the bonuses from this scheme to refuse to play along. That seems a pretty weak argument, though. What they may expect and what they actually have a right to

may be quite different.) When we assess or "weigh out" the strength of these various prima facie duties in this case, it seems reasonable to say that the weight of reasons on both sides is against paying the invoices, and so Alison's actual duty in this case is to refuse to pay them.
Explanation:
1) In this case, it turned out (on my reckoning) that are were three prima facie duties that weighed in favor of not paying the invoices early, and only one against. But it is important to see that determining one's actual duty on Ross's scheme is not a matter of simply weighing up the number of reasons on each side and plopping for whichever side has the most prima facie duties going for it. There could well be "3 against 1 cases" (so to speak) where the actual duty falls on the "1 side". We have to look carefully at the present context and judge how important each of the prima facie duties is in it. But listing the relevant prima facie duties as I have done is a helpful way to get all the relevant moral considerations (from Ross's point of view) out on the table to assess them.
2) Notice that self-interested considerations, like "Alison may get a poor score on her annual evaluation if she doesn't go along," are not a factor for Ross. (The duty of selfimprovement refers to developing your talents and moral skills - it does not refer to improving your material well-being. So it is not relevant here, and it is very rarely relevant in business ethics. Shaw and Berry, unfortunately, do not say much about Ross means by the duty of self-improvement, and it is easy to misunderstand.) Self-interested considerations don't get factored in for Ross because he doesn’t think that they are genuinely moral considerations, and he thinks moral considerations trump self-interested considerations anyway. This is not to say that he thinks that self-interest is unimportant, but that it only becomes an issue when no prima facie duties apply.
Note: Even though here I conclude that all four theories would agree about what Alison should do, they won’t always agree, so don’t be thrown off if an action that seems right from one perspective is wrong from another. Also, sometimes people adhering to the same theoretical perspective will disagree as to whether a particular action is right or wrong. (For example, two Act Utilitarians might assess the expected consequences of an action a bit differently.) So more than looking for you to draw particular conclusions, what matters most to me is your ability to demonstrate that you can analyze cases in the way each theory recommends. Show me, in other words, that you can think like an Act
Utilitarian, a Rule Utilitarian, a Kantian, and a Rossian.