Business Ethics Flashcards
What Ethical theories do you use for Business ethics?
Kant + Utilitarianism
- Business = No God logical
3 Areas of Business ethics
- CSR - Cooperate social responsibility - Hypothetical Window dressing
- Whistleblowing
- Globalisation
What is the Lone ranger view
Milton Friedman
- Purpose of Business is to make person money, increase stock value - managers only ethical responsibility is to owner of the company
Stakeholder Vs. Shareholder
Stakeholder
- Anyone impacted by organisation’s activities, eg. shareholders, employees, customers, suppliers, community
Shareholder
- Someone who owns shares in company
CSR defintion? + example
also called Hypothetical Window dressing
- Organisation considering interests of society by taking responsibility for impact of activities on stakeholders / environment
- Voluntary implementation of social / environmental concerns
–> can be done due to duty, or to give business positive image and maximise profits
e.g.
- John Lewis + Waitrose
–> make employees partners, give them dividend + say in how company is run
Benefits of CSR to company
- ↑ Productivity of workforce
- ↑ Community relations
- ↑Profits could occur - Principle agent problem
- ↑Image with consumers –> more marketable
- ↑Recruitment of top-level staff
- ↑Shareprice
CSR Kant
- Hypothetical imperative if done to benefit business
- Cannot be universalised - business might make loss + shutdown
–> could be for large business e.g. John Lewis able to - Does Company have same responsibilities as a person
–> People running company still have responsibilities
Explain Trafigura Case Study
- Trafigura was TNC
- Instead of safety dumping toxic waste for high cost, spent 3% of original cost to dump of coast of Africa
- 15 people died, 100,000 had to seek medical help
–> cause miscarriages + chronic illness
Whistle Blowing definition
- disclosure of information to an employer, regulator police or media concerning malpractice and wrongdoing
–> can be internally (higher-up) or externally (police or media)
What was the study done on whistleblowers about
- Greenwich study of 1000 Whistleblowers
–> 74% involved harm to third parties
–> 82% internal
–> 40% got a response - most common was formal action e.g. demotion, suspension, or disciplinary action for whistleblower
Kant on Whistleblowing
- Duty to whistleblow
- Action meets all 3 formulations
- Should not be deterred by negative consequence
- If causes harm to 3rd party - Reason tells us to do it
Explain Enron Case study
- Whistle blowing
- Enron using assets to increase value of company when shouldn’t have
- Sharron Watkins notices + sent anonymous email to hirer up
–> some argue not whistleblowing as was internal - Continued to work at Enron until investigation caused her email to be public
Religion on Capitalism (5 points)
Capitalism = Adam Smith
–> distribution + equilibrium maintained by idea everyone driven by self- interest
Pope Francis
- Critical of inequalities caused by capitalism
- Condemended utility of money and criticised government for not interfering with businesses
Kate Pickett
- Inequalities from capitalism cause increase mental + physical health +social problems the more unequal a society
Parable of Sheep and the Goats
- Matthew - judges on concern for other
- sheep who gave food + water to hungry rewarded with eternal life
Bible
- Does suggest humans are inherently selfish
Globalisation defintion
Global Market where information + commercial trade occures
–> Global Labour market –> firms ↓AC leads to ↓Wages + ↓Safety standards + ↑Hours for workers in developing countries
–> Pope Francis condemned called ‘slave Labour’
Example for Globalisation bad
- Primark Factors collapse in 2013
–> In Bangladesh killing 1,200 people
