Business Ethics Flashcards
What is corporate social responsibility?
The idea of business has responsibilities towards the community and environment (all stakeholders)
What is whistleblowing?
An employee discloses, unethical or illegal business practices to the employer or the public
What may a whistleblower draw attention to?
Tax avoidance within a business
Environmental issues that the company wishes to hide
Cheating on tests or exams
Discrimination or bias in recruitment or promotion procedures
Who argues against CSR?
Milton Friedman was an American economist. He believed that the social responsibility of businesses was to increase its profits.
Why did Friedman believe in this?
He believed if the business is successfully making money employees will obtain more money and can therefore be generous with that and businesses themselves should be profit driven. Also, money taken from shareholders to fund Social responsibility projects is the equivalent of stealing.
Defending a utilitarian view.
Businesses are results driven. As a theological ethical theory, utilitarianism ensures that the focus is on achieving the best outcome.
Act utilitarianism gives flexibility to different situations, situations business is face are likely to be unique so it is good having an ethical theory that isn’t rule-based
Benthams utilitarianism is hedonistic, suggesting humans are motivated by pain and pleasure. Advertisers use these principles to appeal to our desires, or playing on our fears in selling products, this suggests is not wrong
Utilitarianism, depersonalises issues, singer refers to the impartial observer as he believes in preferences and interests, and that we should be free from personal bias, and consider what each individual ones
Difficulties with a utilitarian view.
Act utilitarianism is time consuming in a fast, paced world, to consider every possible effect on utility, and consequence, is very complicated and lengthy
Bentham famously referred to belief in human rights as “nonsense on stilts “. Hence, a utilitarian approach, could allow things many of us would regard as an unethical in order to reach an end.
Ideas on pleasure and pain and our experiences are subjective. We may see a situation differently from someone else.
Difficult to compare different ‘goods’ and environmental benefit, a wage rise, and an improvement in working conditions would all be measured in different ways
According to Kant, what is most important?
Kant argues our moral duty is the most important as we are moral agents. We find this out using the categorical imperative based on what can be universalised. This would affect the employer who would have a duty to pay a fair wage and the employee who would have a duty not to take excessive breaks or over claim on expenses as this would violate universal law
Kant on acting good for business.
He gives the example of a shopkeeper who treats customers well, because it is good for business, thus acting in accordance with duty. This is not a purely good act as the motive is wrong, their motive to do, the right thing would be better.
Kant on corporate social responsibility.
Kant believes you should treat persons employees customers and competitors as an end rather than means to an end.
All stakeholders need to be considered, not just those who own the business.
Kant also values honesty (universalism) this would affect claims of business would make in advertising
Kantian ethics on whistleblowing.
In Kantian ethics, truth needs to be told, although employees have a duty to the company, they also have wider ethical responsibilities.
John Rawls on the veil of ignorance.
The idea that before we are born, we stand behind a veil of ignorance, not knowing what our situation in life will be: not knowing our gender, our race, whether we will be disabled, able-bodied, rich or poor. If this was the case, we would agree in two rules in order to ensure justice.
What are the two rules that ensure justice?
Each person to have equal access to basic rights and liberties
Social and economic inequalities to be arranged so that they: have the greatest benefit for the disadvantaged e.g. less tax for the poor . And give equal opportunity for the disadvantage to achieve high office and position on merit.
What did Rawls argue within taxes?
Rawls argues the wealthy, should expect to pay more tax to address the inequality in society
Defending a Kantian view.
The principle of universal law requires we are consistent in decision-making. This is important as it enables us to treat others equally, and build trust ensuring people know what to expect from us.
The principle of treating others, as ends not as means to an end, is important in ensuring that those who we deal with are not treated as data or numbers
Kants focus on importance of motives, insures that corporate social responsibility is genuine. I’m not just a marketing ploy to attract customers
Difficulties with a Kantian view.
Kantian ethics, is an abstract theory that does not translate to real world situations. For instance, it is unrealistic and naive to think a business should not consider profit business is cannot survive without it.
Universal law is not useful each situation encountered is unique and different so insisting an action to be applied Universally is not helpful.
Focusing on motive is difficult as motives can’t be proved for the shopkeeper acting out of duty or merely in accordance with duty is indistinguishable from outside and only known by the shopkeeper
A key difficulty of Kantian ethics is conflicting duties, we may not be able to satisfy everyone
Henry Ford quote
A business that makes nothing but money is a poor kind of business
Ford Pinto Case
Gas tank was designed that when it was involved in a rear end collision, the tank was likely to rupture causing a fire and explosion
By law they didn’t have to change it
Ford Pinto Costs
49.5 million deaths etc.
137.5 million car changes
Intrinsic reasons - Dame Roddick Body Shop
Good is good business
Extrinsic reasons - Lord Alan Sugar
Helps gain an audience
Strengths of Friedman’s view
Without profit, a business can’t survive
Promote social responsibility to society
Increase of profits, benefits economy, which benefits the citizens of that connor me
Issues with Friedmans view
Should not be forced by the government
Companies can still be successful pursuing different methods
E.g Responsibility to stakeholders can still be achieved while strengthening the community
Shareholders
Key priority would be to make a profit for shareholders
Stakeholders
Wider needs of consumers, employees and the community should be considered
Nike example
Nike improved working conditions and pay to improve ethics and eventually saw an increase in productivity
Employers vs employees
Employers want to plan for future, make profits and keep employees motivated
Employees want best working conditions, job security
If employee is unhappy = will result in less profit
Globalisation
Companies becoming worldwide
Justifications for globalisation
Gives jobs and income to poor communities
Trains local people with new skills
Consumers benefit cheaper
Consumers can always purchase
Issues with globalisation
Ruining domestic businesses
Keep poor communities poor and rich richer
Takes jobs away from those with better human rights
Deforestation and pollution
Child labour
Bangladesh sweatshop
24th April 2013
Factory collapsed, 1100 killed, 2500 injured
People threatened to go back to work
Upper factory floors built without permits
Outcomes of Bangladeshi incident
35 other factories closed down
30 million compensation
Kant on Globalisation
Using countries as a means to an end
Cannot universalise exploitation of nations and people
Utilitarianism on business
Weigh up the balance of good vs harm
Greatest happiness for the greatest number
Peter Singer pleasure is too subjective. Minimise pain> maximising pleasure
