ETHICAL PHILOSOPHIES COMPLY WITH INSTAGRAMS FAILURE Academic Essay

Ethical philosophies systematically critic, defend and recommend a conduct, whether it is right or wrong. This paper discusses the non-compliance of Instagram with the basic ethical philosophies. In particular, it scrutinizes the action of Instagram, with the lens of the ethical philosophies, in changing its terms and conditions which led to an uproar among its users. Instagram has changed its terms of policy twice. In 2012, it made the provision that a company could be able to pay Instagram to display the photos and other details of its users. This was to be done without any compensation to the user. Especially affected were those users who were connected sponsored advertisements and promotions. Interestingly, these terms never made any provisions for the users to opt out. As expected, the revision of the terms and conditions elicited a furious reaction from the users, especially the celebrities whose photos were part of their businesses and brand images. After the backlash, Kevin Systrom, a co-founder of Instagram, explained that the intention of Instagram was not to sell the photos of the users but rather to help Instagram experiment with innovative ways of advertising. The terms and conditions were again revised in 2013. In the new legal arrangement fronted by Instagram, the user was to grant Instagram the right of use of the content he or she posted. The user was never to be compensated in this arrangement. Moreover, Instagram reserved the right to share the users information with other third parties. Instagrams goal was to earn royalties. Initially, Instagram had been offering free service to its customers. However, for it to remain a viable company, it had to look for a way of generating revenue. To this end, advertisement remained the most viable option. This is the theory of morality which derives moral duty from what is desirable to be achieved. Under the teleological theory the paper will focus on utilitarianism, agency theory and shareholder value. According to this theory, utility or welfare is the basic human good. Welfare refers to the wellbeing of individuals. It deals with the rightness of actions. The theory states that from a range of possible actions, the right action is that which most promotes the welfare of human beings in general. In the case of Instagram, therefore, utility would refer to that which would be good for the users and everyone involved in the company. According to this theory, the action of Instagram could only be right if it was for the benefit of a majority which includes the users. (New World Encyclopedia, 2015). The action of changing the terms and conditions by Instagram was, solely, aimed at earning revenue for the company but did not consider the well being of the users. The fact that the users expressed their unhappiness clearly demonstrates Instagram fell short of this ethical tenet of utilitarianism. According to agency theory, in the management of the modern corporations like Instagram, managerial actions often deviate from the required ones in order to maximise returns for the shareholders (Donaldson & Davis, 1991). In this context, there are two entities: Facebook which is the principal and Kevin Systrom and the entire management who are the agents. The main work of the agents is to employ any means to increase the wealth of the shareholders (Kleiman, n.d.). Clearly, the complexity and ambiguity of agency relationships carries with it many ethical issues concerning both the agents and the principals. First of all, there are no specific things which are stipulated for the agents to carry out on behalf of their principals, it is assumed that the agents should always act in the best interest of the owners. This has one implication: either the interests of the principals are always morally acceptable or the agents should act in unethical manner to fulfill their contract (Donaldson & Davis, 1991). In this case, the principal, Facebook, were interested in seeing Instagram becoming a viable company. Kevin Systrom, on the other hand, had the sole responsibility of ensuring that Instagram remained a viable company. Even though the interest of Facebook is morally right, the manner in which Kevin Systrom and the other managers acted to fulfill their contractual obligations of making Instagram a profitable entity is no doubt unethical as it violates the basic rights of the users (Kleiman, n.d.). The shareholder value theory states that the ultimate measure of a company is the extent to which it enriches its owners. The primary goal of Instagram management is, therefore, to increase the wealth of its Facebook by growing the earnings, share price and dividends (Straub, 2012 ). All these improvements depend upon the strategic decisions made by the management. In this case, change of terms and conditions lies at the core of the strategic decisions that the managers of Instagram are exploiting in order to earn revenue for Facebook (Saint & Tripathi, n.d.). This is a theory based on duty which evaluates moral actions on the basis of whether they right or wrong rather than whether they are good. Under the deontological theory, the paper will discuss Kantianism, shareholder theory and stakeholder theory. According to this theory, every duty should be performed according to some underlying principle, unique to that duty, with which its moral worth can be judged. Firstly, in this context, the theory assumes that Instagram managers and shareholders are rational beings who should act rationally. This theory amounts to a thought experiment where a principle is hypothetically applied to all people in the relevant circumstances. If the maxim or principle and its associated action are conceivable in such a world then it is termed as a rational maxim. Otherwise it becomes irrational and holding it becomes impossibility (Vleeschauwer, n.d.). For this reason, there are two things that could be examined to know whether Instagram violated this theory. Firstly, it is important to examine whether the principle upon which Instagram changed its they could wish to become a universal law. Secondly, it is important to check whether the manner in which they treated the customers was merely a means to an end or was an end itself (Vleeschauwer, n.d.). Were they rational in their decision, acting through principle and being conscious of their membership in the universal kingdom of ends? Clearly, it would be very chaotic to be in a world where the terms and conditions of a company are deemed oppressive to the customers. If every company had similar terms and conditions, it would be unbearable to the customers. Instagrams action therefore goes against the first principle: they it could wish for their action to become a universal law. Secondly, the manner in which Instagram treated the customers was simply a means of getting profit and not really satisfying the users. A steward is one who is responsible for caring for something on behalf of an individual or an entity. While they do not own what they are responsible for, stewards are required to act conscientiously since they have to render an account for all the transactions they engage in and their far reaching effects (Donaldson & Davis, 1991). According to the stewardship theory, while profit was the driving force for Instagram, it ought to see itself as part of something bigger. According to this theory, the ownership does not really own a company: it is merely holding the company in trust. This should be reflected in the manner in which the ownership does business: profit making takes a back seat and the companys vision of meeting the social standards takes precedence (Donaldson & Davis, 1991). Some of the concerns may be environmental, human or animal rights among others. The gist of the theory is social responsibility. Clearly, Instagram did not act in accordance with this theory. By changing the terms and conditions which completely excluded the voice of the users and was only pegged on the possibility of creating more revenue, Instagram proved that they were not driven by the urge to care for the welfare of the users. (Donaldson & Davis, 1991). A stakeholder is defined as any individual or entity that is affected by an organisation. The stakeholder theory states that the purpose of a business is to create as much value as possible for all the stakeholders (Gunay, 2008). For success to be guaranteed overtime, the interests of the employees, shareholders, communities, customers must be aligned and kept in the same direction. Any innovation made by the corporation should have the sole purpose of keeping the interests aligned. According to this theory, the interests of the stakeholders should not be traded against each other. For this reason, the executives have the responsibility of managing for the stakeholders while creating as much value as possible for the shareholder. (Saint & Tripathi, n.d.). The gist of the theory is a broader constituency for corporate responsibility. The theory is more concerned with the claims on the corporate conscience of a company than on its imperative to maximise financial return to the shareholders (Straub, 2012 ). Examining Instagrams action, it is clear that it only catered for the interests of the shareholders and, perhaps, the employees. However, the users interests were thrown out of the window. The urge to make more profits for Facebook took precedence and this made it impossible for the interests of the other stakeholders to be aligned. The Instagram management did not fulfill its responsibility of creating value for all the stakeholders; including the users (Saint & Tripathi, n.d.). In conclusion, the action of Instagram, in changing the terms and conditions in order to increase revenue, majorly, violated the theories of ethical philosophies. It is clear that while the management of Instagram was meant to increase the profits of the company and ensure its viability, it, completely, ignored the welfare of users. In this regard, the ethical philosophies comply with Instagrams failure. Bibliography Donaldson, L. & Davis, J. H., 1991. Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. AUSTRALIAN JOURNAL OF MANAGEMENT, 16(1). Gunay, S. G., 2008. Corporate Governance Theory: A Comparative Analysis of Stockholder and Stakeholder Governance Models. s.l.:iUniverse. Kleiman, R. T., n.d. AGENCY THEORY. [Online]Available at: http://www.referenceforbusiness.com/encyclopedia/A-Ar/Agency-Theory.html[Accessed 19 April 2016]. New World Encyclopedia, 2015. Utilitarianism. [Online]Available at: http://www.newworldencyclopedia.org/entry/Utilitarianism[Accessed 19 April 2016]. Saint, D. K. & Tripathi, A. N., n.d. The Shareholder and Stakeholder Theories of Corprate Purpose. s.l.:s.n. Straub, R., 2012 . Shareholder Value ?? a theory that changed the course of history ?? for the better or the worse?. [Online]Available at: http://www.druckerforum.org/blog/?p=139[Accessed 19 April 2016]. Vleeschauwer, H. J. d., n.d. Kantianism. [Online]Available at: http://www.britannica.com/topic/Kantianism[Accessed 19 April 2016].

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