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ethics > buisness ethics > Flashcards

buisness ethics Flashcards

1
Q

what is corporate responsibility

A
  • asks whether a business’ main concern should be economic responsibility or social responsibility
  • businesses should be accountable for their actions and the impacts they have
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2
Q

Milton Friedman argues that the purpose of business is profit. Why is this?

A

-as this ultimately benefits society as successful companies employ a large workforce, can pay employees high salaries which in turn means that people have money to spend which boosts the economy

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3
Q

Friedman was building on the ideas of Adam Smith who believed what?

A
  • that humans act only out of self interest

- if they appear to be acting for the sake of others it is essentially because it benefits themselves.

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4
Q

what is the invisible hand?

A
  • you don’t need laws telling businesses what to do.

- let the business look after people so they make a profit

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5
Q

Both Friedman and Smith argue for capitalism. What is this?

A

-an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state

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6
Q

what is trickle down economics

A

-if high income earners gain an increase in salary, then everyone in the economy will benefit as their increased income and wealth will filter through to all sections of society

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7
Q

explain a stakeholder view

A
  • businesses exist to fulfil the human need to work rather than for profit
  • we all need to be members of a productive society and contribute
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8
Q

Friedmans argument against a stakeholder view

A
  • these social issues are not the primary concern of businesses, but of government.
  • businesses are not designed to achieve social goals
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9
Q

Both shareholder and stakeholder businesses must comply with the laws. Explain this

A
  • you cannot do anything just to make a profit.

- e.g. you can’t make false claims through advertisement and you have to pay employees minimum wage

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10
Q

what is a problem with globalisation?

A

it makes it difficult to control the laws by which a business operates

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11
Q

What was Adam’s view on the relationship between employer and the employees

A
  • he saw the relationship as being equal

- the employees need wages and the employer needs their labour

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12
Q

what was Marks view on the relationship between an employer and the employees

A
  • argues that the bourgeoisie (middle class) employed anyone who would agree to their terms.
  • if the proletariat (workers) disagreed then they went without.
  • this isn’t a equal relationship as the employers have all the cards
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13
Q

define globalisation

A

the integration of natural economies into an international economy

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14
Q

3 problems with globalisation

A
  • workers in less economical developed countries earn a pittance in comparison to western counter parts
  • as poorer countries become more developed this has a greater impact on global warming and pollution - more people are working so they go out and buy things so more factories are being built
  • an economic crisis in one country can trigger a global depression
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15
Q

strength of globalisation

A

means we get cheaper goods and we have improved international relations and LEDC’s (less economically developed countries) benefit from globalisation

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16
Q

define whistle blowing

A

when an employee discloses wrongdoing to the employer or the public

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17
Q

whistle blowing is often seen as an individual’s moral choice but give an example of when employees have a legal responsibility if the behaviour might be criminal

A

e. g. a nurse who thinks her boss is smacking the children

e. g. if an accountant realised that her boss was illegally avoiding paying his taxes, she would have to report it

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18
Q

what does the public interest disclosure act protect

A
  • whistle blowers

- if your boss retaliates against you reporting him then he can be jailed up to 10 years

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19
Q

when will a person not have protection from whistle blowing someone

A

if they are simply making accusations because they have personal problems with the boss

20
Q

what type of work isn’t protected by the public interest disclosure act ?

A

armed forces

21
Q

what does Norman Bowie claim about whistle blowing

A
  • it is disloyal

- the employee should try to resolve the problem first in the business rather than reporting it to the media

22
Q

According to Adam’s Smiths ‘invisible hand’ Theory it follows that good ethics is good business. Explain this

A
  • if a company treats customers with respect then it will have more customers and make more money
  • but this isn’t always the case. Managers pay themselves huge salaries but employ their workers on 0 hour contracts. Sometimes bad ethics if good business.
  • Many argue that the purpose of a business is to make money
  • being ethical may just be a branding choice. If you are trying to sell goods to the customers you need a ‘brand’ which will attract a certain customer
23
Q

apply kants categorical imperative to business ethics

A
  • good ethics is essential regardless of whether it means good business
  • to act out of a desire to make profits is using the categorical imperative
24
Q

apply kant to corporate social responsibility

A
  • good business practices must be universalised. Bribery and corruption cannot be universalised but fair trade can
  • an act is only truly good if it comes from good will. So companies that sponsor charitable events in order to promote their own reputation would not be considered particular ethical
  • similarly, if the reason for them caring about pollution is primarily concerned for their own reputation so they make a profit is not good
  • a business should according to Kant act responsible solely because this is the right thing to do
25
Q

example of the hypothetical imperative (Kant and business ethics)

A
  • Kant recognises that a greengrocer is friendly and helpful because he wants the customer to return.
  • this is an example of the hypothetical imperative
26
Q

explain ends in themselves (Kant and business ethics)

A
  • everyone involved in business must be treated as ‘ends in themselves’
  • Kant recognises everybody’s abilities reason which gives each an intrinsic worth
  • companies which control and monitor employees excessively seem to be without respect for the dignity of humans
  • if they don’t use customers fairly then they are using those people as a means to an end.
27
Q

why could you argue that Kant prefers a stakeholder theory of ethics

A
  • as the customers and employees are more important than profit
  • however, a problem with stakeholder ethics is that it isn’t always their best interests to obey these principles
28
Q

explain Kant and whistle blowing

A
  • duty to tell the truth and to be fair in dealing with customers which supports whistle blowing
  • duty of loyalty and promise keeping to shareholders and to the company
  • would have to decide which duties outweighed which others
29
Q

why does Kant approve of globalisation ?

A

-it will lead to a more peaceful world and avoid war since we can continue to trade and make money

30
Q

what is a weakness of applying utilitarianism to business ethics

A
  • on must ask ‘consequences for whom’

- e.g. the sale of fast food makes enormous profits for businesses but also the cost of obesity on society

31
Q

explain the hedonic calculus in terms of business ethics

A
  • it is like a cost benefit analysis

- what are the costs of labour, materials, transport etc against the financial return

32
Q

why would it seem that Bentham would prefer a share holder argument

A

because profits seem to benefit the majority

33
Q

outline benthams utilitarianism and business ethics

A
  • the greatest happiness for the greatest number. The principle of utility
  • relativist system so either right or wrong
  • the ends justify the means
  • consequentialist and equalitarian
  • hedonic calculus
  • e.g. if it favours the economy that companies should be allowed to default on tax payments the this is acceptable
34
Q

explain why Mills qualitative utilitarianism could be used to defend the stakeholder business model

A

-if a company exists solely to make profit then it could be accused of putting the base happiness associated with profit before the higher pleasure of contributing positively to society

35
Q

define stakeholder

A

a group/ organisation/ individual who is impacted by the outcome of a project

36
Q

define shareholder

A

an owner of shares in a company

37
Q

apply act and rule utilitarianism to whistle blowing

A
  • an act utilitarian would consider each situation on its own
  • a rule utilitarian would think about whether whistle blowing in general, as a rule, was a good idea
  • the utilitarian would have to weigh up why her whistle blowing was likely to maximise pleasure or not
  • in long term for the large number of people, whistle blowing would be a good idea if the company needed a wake up call about its ethics
  • however, whistle blowing could bring about the end of the cosmonauts, causing job and financial loses
38
Q

explain why for a utilitarian good ethics can mean good business

A
  • if a company brands itself as ‘fairtrade’ and is consequently successful then the shareholders are happy because they have made money and the customers are happy as they know they have brought a fair trade product
  • if the cost of good ethical practice means the products are too expense then everyone loses
39
Q

what may a rule utilitarian say about zero hour contracts

A

they cause more pain than pleasure

40
Q

explain utilitarianism and globalisation

A
  • when countries try to avoid globalisation with barriers to international trade, a utilitarian might argue that this doesn’t lead to happiness
  • the people of that country don’t have access to cheap goods so the cost of living increases.
  • results in high unemployment as the country doesn’t sell goods abroad. The economy doesn’t grow
  • utilitarianism favours globalisation
41
Q

give an example of utilitarianism basing

business decisions on the principle of utility

A

-if an employing worker in developing countries is making them happy then it is irrelevant that they are in the opposite side of the world

42
Q

what are shareholders

A

people who invest in the business and trust the mangers of the business to use their money to make them a profit

43
Q

apply utilitarianism to corporate social responsibility

A
  • would need to weigh up the potential pleasure and pain that corporate social responsibility might generate
  • different people’s interest would need to be considered
  • would probably decided that it was in a business’ best interest to act responsibly, as in most cases it would me more likely to produce pleasure for the maximum number of people
  • however, if there were cases when acting irresponsible would provide a great amount of pleasure than pain, than the utilitarian should support acting irresponsibly
44
Q

what does ‘good ethics is good business mean ‘

A
  • doing the right thing will make a business more attractive and increase orders and customers will like it
  • also interpreted to mean that when businesses seem to be acting ethically, they are only doing it to increase their profits
45
Q

how can good ethics be difficult for businesses

A
  • because sometimes an action that is beneficial for one group of people can have the opposite effect on others
  • e.g. keeping milk prices low in shops in beneficial for the customers but not for the farmers
  • sometimes good ethics make it difficult for a business to succeed alongside its competitors
  • e.g. if it’s pays factory workers a good wage, it might have to charge more for its products but then customers may buy elsewhere
46
Q

explain a kantian approach to good ethics is good business

A
  • business should do the right ring just because it is the right thing to do
  • concerns about profit or competition are irrelevant
  • however, this is difficult if companies want to survive in a competitive, capitalist market.
  • trying not to treat people as a means to an end is difficult in business, because employees, suppliers and customers are all ‘used’ as part of the process of making a profit
47
Q

example of globalisation

A
  • the collapse of the Rana Plaza factory building in Bangladesh is an example of when globalisation caused harm to workers, but was also important in bringing about benefits once pressure was put on global companies

ethics (12 decks)

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