Buisness Ethics

Question 1

What four points from the spec do I need to know?

Answer 1

• Corporate social responsibility
• Good ethics is good buisness
• Whistleblowing
• Globalisation

Question 2

What is CSR and what does it apply to?

Answer 2

CRS is the idea that a buisness has a responsibility towards the community and the environment.
Applies to stakeholders, such an employees, customers, the local community, the country as a whole and governments

Question 3

What is good ethics is good buisness and what does it apply to?

Answer 3

That good buisness decisions ae good ethical decisions
Applies to shareholders and profit-making

Question 4

What is whistleblowing and what does it apply too?

Answer 4

Where an employee discloses wrongdoing to the employer or the public
Applies to the contract between the employee and the employer

Question 5

What is globalisation and what does it impact?

Answer 5

Around the world economics, industries, markets, cultures and policy-making are intergrated
Impacts stakeholders

Question 6

What do utilitarians argue the heart of this issue is?

Answer 6

The question is not ‘should I lie?’, or ‘shpuld I exploit people?’, its ‘what happens if I lie?’, and ‘what happens if I exploit people?’. Every decision is made relative to consequences. Is this how a buisness ought to behave?

Question 7

What do Kantians argue the heart of this issue is?

Answer 7

Can buisness’ universalise their behaviours? Can they act in a way that is not treating people as a means to an end?

Question 8

What is a Transnational Corporation (TNCs)?

Answer 8

large buisnesses that operate in a number of countries e.g. Apple

Question 9

What is a stakeholder?

Answer 9

anyone who is harmed by, or benefits from, the corporation e.g. customers

Question 10

What is a shareholder?

Answer 10

A person who has invested money in a buisness in return for a share of the profits

Question 11

What is consumerism?

Answer 11

A set of social beliefs that put high value on owning material things

Question 12

What is the free market economy?

Answer 12

An economy in which prices, wages and so on are determined by the laws of supply and demand, with minimal government interference

Question 13

What is Capitalism?

Answer 13

An economic system based on private ownership and free trade. Buisnesses compete freely with eachother to make profits, rather than governement intervention

Question 14

What is socialism?

Answer 14

A political and economic theory which argues that the means of production should be owned or regulated by the community as a whole e.g. NHS is kostly paid for by taxes and is regulated by the government

Question 15

Who is Milton Friedman and what does he discuss? (3)

Answer 15

Economist - wrote an article in NYT magazine ‘The social responsibility of buisness is to increase its profits’
Discusses- ‘hypocritical window dressing’
Making profit and abiding by the law is most important, buisnesses dont have a CSR
Good ethics prohibits companies from making huge profits

Question 16

Whos is Adam Smith and what does he discuss? (2)

Answer 16

Economist, fathers of capitalism
Contrast to Friedman, argues good ethics is good buisness in the long-term. When we procide good service to customers, we do so knowing that we will benefit in the end

Question 17

Case Study: Edward Snowden (American NSA worker) 2013

Answer 17

worlds most famous whistleblower revelead to American and British Newspapers that the NSA was routinely monitoring the communications of millions of ordinary citizens in tbe US, UK and many other countries without their knowledge
Discuss in whistleblowing

Question 18

Case Study: Rana Plaza Clothes Factory (2013)

Answer 18

Rana Plaza building collapsed because of poor safety standards, killing over 1000 workers. Factory supplied companies with low cost clothing like primark
Discuss in globalisation

Question 19

Case Study: Ford Pinto Case (1970)

Answer 19

During crash tests of the Ford Pinto, a serious design flaw was discovered - the car was likely to catch fire and explode if involved in a rear collision at a speed of 20MPH.
Cost benefit analysis- it was cheaper to not amend the car and allow people to die
Discuss for deception-good for a means to an end

Question 20

What might CSR involve? (3)

Answer 20

• investing in local youth sport teams
• choosing not to test on animals
• choosing not to use sweatshops

Question 21

What issue do many coporations face? (5)

Answer 21

Stakeholder interests rarely overlap
For example:
• supermarkets compete intensley for customers and best way to compete is by offering extremely cheap prices on basics e.g. milk
• the dairy supliers are paid below the cost for them to produce the product yet, they cant do anything about it bcs their main customers are supermarkets
• customers are happy, supermarkets happy, suppliers unhappy
• may create knock-on-effect, suppliers may campaign to raise awareness of ethical supermarket purchasing practice, customers may be unhappy that ‘their’ supermarket is behaving unethically and move elsewhere
• Yet, if supermarkets increase their price, the customers may move to a competitor that is cheaper

Question 22

TNC perspective (2)

Answer 22

arguably much more complex as they have to balance local needs with global needs
They make decisions that benefit their company globally but at the same timehas a negative impact on the local community

Question 23

What is meant by ‘window-dressing’?

Answer 23

refers to the arrangement of an attractive display in a shop window, aimed to ‘hook’ customers

Question 24

what is ‘hypocritical window-dressing’?

Answer 24

Friedman uses it to say corporations market themselves to look attractive from the outside, but this is ‘hypocritical’ as its disingenuous marketing aimed solely to increase profit

Question 25

Does it matter if CSR is not genuine? Kantian view point (3)

Answer 25

• deontological, so intention matters
• CSR should not be hypocritical window-dressing
• Kantians argue duty shpuld be the sole motivation, not self-interest

Question 26

Does it matter is CSR is not genuine? Utilitarian view point

Answer 26

Consequentialist perspective, so hypocritical window-dressing may be morally permissible, as the greatest balance of good over evil is the desired goal

Question 27

Does it matter if CSR is not genuine? Friedmans perspective

Answer 27

corporations dont have social responsibilities, their only aim is to make a profit

Question 28

According to Milton Friedman is ‘good ethics good buisness?’ (2)

Answer 28

• Good ethics may or may not be good buisness
• Buisnesses have no obligation to do ethically good actions

Question 29

According to Adam Smith is ‘good ethics good buisness?’

Answer 29

• Yes (utilitarian approach), buisnesses have a symbiotic (interdependent) relationship with both their stakeholders and employees

Question 30

Its good buisness if its your ‘hook’ - Discuss

Answer 30

Lord Alan Sugar, good ethics may well be good for a buisness, but its mothing more than a branding decision e.g. Tonys Chocolonley
No, its not good buisness - being ethical includes increasing costs and reducing profits

Question 31

What did the ‘Freedom to Speak Out’ report show?

Answer 31

The ‘Freedom to speak out’ report i to NHS whistleblowing found that 30% of whistleblowers felt unsafe and some had contemplated suicide
In resorting to whistleblowing, an employee has to balance their loyalty to their company with any wider public issues and their need to live with their own conscience

Question 32

What effects has globalisation produces? (6)

Answer 32

• the rise of TNCs e.g. apple
• increased competition in manufacturing and services
• economic growth in developing countries
• a loss of culture or national identity
• impact on the environment
• lower wages or loss of jobs