Buisness Ethics Flashcards
What four points from the spec do I need to know?
• Corporate social responsibility
• Good ethics is good buisness
• Whistleblowing
• Globalisation
What is CSR and what does it apply to?
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
What is good ethics is good buisness and what does it apply to?
That good buisness decisions ae good ethical decisions
Applies to shareholders and profit-making
What is whistleblowing and what does it apply too?
Where an employee discloses wrongdoing to the employer or the public
Applies to the contract between the employee and the employer
What is globalisation and what does it impact?
Around the world economics, industries, markets, cultures and policy-making are intergrated
Impacts stakeholders
What do utilitarians argue the heart of this issue is?
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?
What do Kantians argue the heart of this issue is?
Can buisness’ universalise their behaviours? Can they act in a way that is not treating people as a means to an end?
What is a Transnational Corporation (TNCs)?
large buisnesses that operate in a number of countries e.g. Apple
What is a stakeholder?
anyone who is harmed by, or benefits from, the corporation e.g. customers
What is a shareholder?
A person who has invested money in a buisness in return for a share of the profits
What is consumerism?
A set of social beliefs that put high value on owning material things
What is the free market economy?
An economy in which prices, wages and so on are determined by the laws of supply and demand, with minimal government interference
What is Capitalism?
An economic system based on private ownership and free trade. Buisnesses compete freely with eachother to make profits, rather than governement intervention
What is socialism?
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
Who is Milton Friedman and what does he discuss? (3)
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
Whos is Adam Smith and what does he discuss? (2)
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
Case Study: Edward Snowden (American NSA worker) 2013
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
Case Study: Rana Plaza Clothes Factory (2013)
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
Case Study: Ford Pinto Case (1970)
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
What might CSR involve? (3)
• investing in local youth sport teams
• choosing not to test on animals
• choosing not to use sweatshops
What issue do many coporations face? (5)
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
TNC perspective (2)
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
What is meant by ‘window-dressing’?
refers to the arrangement of an attractive display in a shop window, aimed to ‘hook’ customers
what is ‘hypocritical window-dressing’?
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
Does it matter if CSR is not genuine? Kantian view point (3)
• deontological, so intention matters
• CSR should not be hypocritical window-dressing
• Kantians argue duty shpuld be the sole motivation, not self-interest
Does it matter is CSR is not genuine? Utilitarian view point
Consequentialist perspective, so hypocritical window-dressing may be morally permissible, as the greatest balance of good over evil is the desired goal
Does it matter if CSR is not genuine? Friedmans perspective
corporations dont have social responsibilities, their only aim is to make a profit
According to Milton Friedman is ‘good ethics good buisness?’ (2)
• Good ethics may or may not be good buisness
• Buisnesses have no obligation to do ethically good actions
According to Adam Smith is ‘good ethics good buisness?’
• Yes (utilitarian approach), buisnesses have a symbiotic (interdependent) relationship with both their stakeholders and employees
Its good buisness if its your ‘hook’ - Discuss
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
What did the ‘Freedom to Speak Out’ report show?
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
What effects has globalisation produces? (6)
• 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