Business Ethics
James Stilton is the chief executive officer (CEO) of RightLiving, Inc., a company that buys life insurance policies at
a discount from terminally ill persons and sells the policies to investors. RightLiving pays the terminally ill patients
a percentage of the future death benefit (usually 65 percent) and then sells the policies to investors for 85 percent of
the value of the future benefit. The patients receive the cash to use for medical and other expenses. The investors are
“guaranteed” a positive return on their investment, and RightLiving profits on the difference between the purchase and
sale prices. Stilton is aware that some sick patients might obtain insurance policies through fraud (by not revealing the
illness on the insurance application). Insurance companies that discover this will cancel the policy and refuse to pay.
Continues Debate This . . . Executives in large corporations are ultimately rewarded if their companies do well, particularly as evidenced by rising stock prices. Consequently, should we let those who run corporations decide what
level of negative side effects of their goods or services is “acceptable”?
Stilton believes that most of the policies he has purchased are legitimate, but he knows that some probably are not.
Using the information presented in this chapter, answer the following questions.
1. Would a person who adheres to the principle of rights consider it ethical for Stilton not to disclose the potential risk of cancellation to investors? Why or why not?
2. Using Immanuel Kant’s categorical imperative, are the actions of RightLiving, Inc., ethical? Why or why not?
3. Under utilitarianism, are Stilton’s actions ethical? Why or why not? What difference does it make if most of the policies are legitimate?
4. Using the Business Process Pragmatism一 steps discussed in this chapter, discuss the decision process Stilton should
use in deciding whether to disclose the risk of fraudulent policies to potential invest
