business ethics

Question 1

formula of humanity

Answer 1

not means to an end, but end in themselves
- The stakeholder theory argues that all those who are affected by the company’s operations should be taken into account

people are free and autonomous rational beings, “not merely tools of production, or income streams.” (Evan and Freeman, 1993)
- rooted in kantian ethics

Friedman (libertarian) claims that the only responsibility of a business is to “make as much money for their shareholders as possible”.

+ formula of nature
acting in a way that jeopardises, for example, the environment or local communities would not be able to be universalised and so this doesn’t follow the Formula of Nature
- companies should have a set of ethical principles that guide their decision-making and actions,

Question 2

corporate social responsibility

Answer 2

Corporate social responsibility: the idea that a business has responsibility to the environment and its community.
eg. body shop - brand that fights social and environmental injustice

• such initiatives limit shareholder wealth
• businessed are hindred by absolutist rules of kant
• Kant disregards the aim of businesses, which at its core are to make a profit in order to survive as a company. Decision-makers are only hindered by the unbending and absolute rules of Kant, and his inability to make compromises in impractical in the world of businesses today

but paradoxically - profits are often enhanced if not exclusively focused on

Data analysis - Ford Pinto cars were sold despite having a fuel tank fault
- cost/benefit analysis determined it would cost less to ignore
- by putting value on customers life and treating as means to an end - results in scandal and loss of profit

• good ethical policies naturally lead to reduced legal, and
  financial, risks - there is decreased risk of being sued by NGO’s such as The Environmental Defense Fund, who are known for lawsuits taking large businesses to court. As seen in the case of Walmart, companies employing sustainable policies may even end up gaining the favour of and having an alliance with funds

utilitarianism - policies increase customer loyalty and trust, in turn leading to good business
ethical policies such as fair wages, good working procedures and treatment leads to enhanced employee morale, loyalty and productivity. Keeping your employees happy, as they are the ones ultimately bringing you money, is key in making sure that your business stays running effectively and smoothly.

Question 3

issue of calculation

Answer 3

Utilitarianism faces the issue of calculation, but Kant does not.

Utilitarianism requires

• know the future consequences of all the possible actions we could take
• make complex calculations about the range of possible actions, sometimes under time-constraints.
• the objective measuring of subjective mental states like pleasure and pain.

(Benthams Hedonic Calculus is a list of seven criteria which each measure a different aspect of the pleasurable consequences of an action)

Bentham claims that an action is right regarding “the tendency which it appears to have” to maximise happiness. So, we actually only need to have a reasonable expectation of what the consequences will be based on how similar actions have tended to turn out in the past.
Mill - only moral obligation is to just do our best to follow the principles geared towards producing happiness of our society, which are themselves only the best current principle that our current stage of civilisation and culture has managed to develop

Question 4

value of consequences

Answer 4

An action is only good if it comes from agood will and not from anything else. Business should act responsibly because it is theirduty and should not be driven by anything else -

Kant and the issue of failing to appreciate the value of consequences

Kant makes this criticism himself when defending himself against the murderer at the door scenario - we cannot predict or control consequences and therefore cannot be responsible for them

Kant’s blanket ban on all actions which treat people as a mere means is a more useful approach than Utilitarianism’s seemingly futile suggestion that we try and calculate which cases will have good or bad consequences.

Question 5

human rights

Answer 5

Utilitarianism is incompatible with the basis for human rights which are deontological.

This is because a ‘right’ is something which must be respected regardless of the consequences
BUT Mill’s harm principle seems to solve this problem because it suggests that society will be happiest if the rule of not harming others is followed

• Kantian Ethics is too utopianand demands businesses abandon a hierarchical structure - A Kantian views an organization as a moral community + it is impractical to think humans can act without emotion
• COUNTER: teamwork is almost universally praised, and several corporations have endorsed varieties of the concept of participative management, including Singapore Airlines