buisness ethics

Question 1

what is corporate responsibility

Answer 1

• 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

Question 2

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

Answer 2

-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

Question 3

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

Answer 3

• 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.

Question 4

what is the invisible hand?

Answer 4

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

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

Question 5

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

Answer 5

-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

Question 6

what is trickle down economics

Answer 6

-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

Question 7

explain a stakeholder view

Answer 7

• 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

Question 8

Friedmans argument against a stakeholder view

Answer 8

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

Question 9

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

Answer 9

• 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

Question 10

what is a problem with globalisation?

Answer 10

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

Question 11

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

Answer 11

• he saw the relationship as being equal

- the employees need wages and the employer needs their labour

Question 12

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

Answer 12

• 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

Question 13

define globalisation

Answer 13

the integration of natural economies into an international economy

Question 14

3 problems with globalisation

Answer 14

• 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

Question 15

strength of globalisation

Answer 15

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

Question 16

define whistle blowing

Answer 16

when an employee discloses wrongdoing to the employer or the public

Question 17

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

Answer 17

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

Question 18

what does the public interest disclosure act protect

Answer 18

• whistle blowers

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

Question 19

when will a person not have protection from whistle blowing someone

Answer 19

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

Question 20

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

Answer 20

armed forces

Question 21

what does Norman Bowie claim about whistle blowing

Answer 21

• it is disloyal

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

Question 22

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

Answer 22

• 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

Question 23

apply kants categorical imperative to business ethics

Answer 23

• 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

Question 24

apply kant to corporate social responsibility

Answer 24

• 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

Question 25

example of the hypothetical imperative (Kant and business ethics)

Answer 25

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

Question 26

explain ends in themselves (Kant and business ethics)

Answer 26

- 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.

Question 27

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

Answer 27

- 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

Question 28

explain Kant and whistle blowing

Answer 28

- 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

Question 29

why does Kant approve of globalisation ?

Answer 29

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

Question 30

what is a weakness of applying utilitarianism to business ethics

Answer 30

- 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

Question 31

explain the hedonic calculus in terms of business ethics

Answer 31

- it is like a cost benefit analysis | - what are the costs of labour, materials, transport etc against the financial return

Question 32

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

Answer 32

because profits seem to benefit the majority

Question 33

outline benthams utilitarianism and business ethics

Answer 33

- 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

Question 34

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

Answer 34

-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

Question 35

define stakeholder

Answer 35

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

Question 36

define shareholder

Answer 36

an owner of shares in a company

Question 37

apply act and rule utilitarianism to whistle blowing

Answer 37

- 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

Question 38

explain why for a utilitarian good ethics can mean good business

Answer 38

- 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

Question 39

what may a rule utilitarian say about zero hour contracts

Answer 39

they cause more pain than pleasure

Question 40

explain utilitarianism and globalisation

Answer 40

- 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

Question 41

give an example of utilitarianism basing | business decisions on the principle of utility

Answer 41

-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

Question 42

what are shareholders

Answer 42

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

Question 43

apply utilitarianism to corporate social responsibility

Answer 43

- 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

Question 44

what does 'good ethics is good business mean '

Answer 44

- 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

Question 45

how can good ethics be difficult for businesses

Answer 45

- 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

Question 46

explain a kantian approach to good ethics is good business

Answer 46

- 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

Question 47

example of globalisation

Answer 47

- 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