Case Study: Ethical Implications of Corporate Downsizing using Kant

This case study examines the ethical implications of corporate downsizing through the lens of Immanuel Kant's categorical imperative. It argues that while a prima facie approach might justify downsizing based on financial imperatives, a deeper consideration of Kant's second formulation, which emphasizes treating humanity as an end and not merely as a means, reveals the ethical challenges. The analysis suggests that corporate downsizing, when used as an immediate response to business losses, often violates this principle by using employees as a means to save the company, rather than considering their welfare as an end in itself. The study concludes that such actions defy the fundamental essence of Kant's theories and can be considered unethical, advocating for a more equitable distribution of losses among all stakeholders.

Corporate Downsizing and the Kantian theory
Immanuel Kant is known as the pioneer of the critical philosophy, most of the authors in the
field of business ethics often refer to him because of the principle of the "categorical
imperative." This principle acts as a bridge between the gap caused by the harsh realities of
the business and utopian world of ethics. From a prima facie approach, the fundamentals of
the "categorical imperative" promote a justified downsizing based on the imperative driven
by the financial conditions and other factors associated with the business.
However, while deciding the fate of many employees that has the power to go for a collective
bargain, we should have a look at the second principle of Kant’s second formulation of the
“categorical imperative" theory. This formulation clearly states that humanity and the welfare
of humans should be treated as an end. They should not be treated as means merely.
In the case of corporate downsizing, companies try to save their own skin from the probable
losses. In order to cut down the losses, they go for the exercise of corporate downsizing. We
can clearly see that here companies are using humans as a means. They are not treating them
as the end part of the endeavor. The other formulations of the same theory support a category
based decision; it means just like the profit, the shock of the loss should be distributed
equally among all the stakeholders. Corporate downsizing as an immediate exercise after a
business debacle defies the fundamental essence of the Kant's theories and it can be
considered as unethical.