Business Ethics Flashcards
“To what extent is utilitarianism helpful in regards to business ethics?” Essay
A: Not helpful as can permit malpractice, sweatshops, Bentham regards human rights as ‘nonsense on stilts’. Rand: bad things to happen on a large scale. Kant better categorical imperative. Strong argument as aligns with the laws now
CA: Mill with the addition to util with the no harm principle. Strong rule util. Util not a problem. Good balance between act and rule - conflicting duties w Kantian ethics
E: Kant better as humans are the pinnacle of creation. Issues with subjectivity of util. Not just treated as data or numbers, important as Adam Smith said employees and boss and symbiotic.
A: consequentialist , hard to see the consequences of globalisation. Deontological better
CA: can predict consequences. Singer impartitial observer put personal bias aside. You have a rough idea. Kant can permit killing people - whistleblowing flexibility is good
E: Hard to use the hedonic calculus in a fast paced business world. Not applicable. Better to have a set of rules to follow.
Business Ethics scholars
Kant: Agrees with CSR, Good ethics is good business, conflicting duty for whistleblowing, disagrees/agrees with capitalism. Kant agreed with the individualism which could encompass capitalism soo ambiguous.
John Rawls: develops Kantian ethics in terms of business ethics. He defines justice as fairness. E.g. economically the wealthy should pay more taxes
Mill: no harm principle added on to util
Bentham: greatest good for the greatest number. Tyranny of the majority.
Freidman: “business is business is business” “CSR is hypocritical window shopping”
Julian Baggini: “no one can sufficiently argue that good ethics is sufficient for a good business”
Robert C Soloman: there is no contradiction between exhibit g good values in business behaviour and being successful. People tend to look at more ethical businesses - Good Ethics is good Business
Adam Smith: employees and the business and consumers and the business has a symbiotic relationship. Good ethics can be good business. Supply and demand good as can flourish from fair wages and stuff
Crane and Matten: globalisation - contribute to a decrease in cultural identity. Contributes to sweatshops
John Lock: argued against whistle blowing as he argues in favour of property rights.
Satre: to be completely free we cannot be confined by money and capitalism “the love of money is the root of all evil”
Karl Marx: Communist - criticised communism for the exploitation of workers
William MacAskill: if we remove sweatshops we are removing working oppurtunities for those in poorer countries
Pope John Paul II: for Kant
CSR
Utilitarianism:
- Mill & Bentham: believe that the free market was the best way to maximise happiness.
- They would probably reject philanthropy as a responsibility of business
- They would generally be against restrictions and responsibilities laid on business which would interfere with that.
Kantian ethics:
- The second formulation would require that market interactions do not involve the treatment of people as mere means
- Avoid exploitation of workers, provide safe working environment
CSR as hypocritical window dressing:
- A business which engages in CSR for public relations purposes might be doing so to distract from their unethical practices.
- may be just to give a good impression to society in order for increased profits
- could be way to disguise the fact that the business is actually part of economic problems such as inequality
- For example, Tim Cook the CEO of Apple made a speech where he talked about how his platform would be against white supremacy, yet Apple continues to exploit people in third world countries
Good ethics is good business
- _Adam Smith suggested that businesses have a symbiotic relationship with both their customers. For example, low wages would harm the businesses reputation leading to them ultimately making less money. This is because a business is built off of reputations.
- Utilitarians may support Adam Smith . A reputation can be ruined in seconds and it can take years for a business to recover
Good ethics is not always good business:
- Milton Friedman would reject any link between business and ethics. There may be occasions where being overly ethical could cause losses
- Kant may argue that good ethics is doing our duty. Kant uses the example of a shopkeep who always chargers fair prices. Even if he was losing money still must be doing duty
Globalisation
- The problem with globalisation is that it can cause the violation of corporate social responsibilities and even undermine the free market itself.
- MNC’s may seek to seek out cheap labour in less developed companies
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Crane and Matten suggest there are three areas where globalisation is relevant to business ethics:
1. Cultural issues: can contribute to a loss of local identity
2. Legal issues: laws are geographically limited. A MNC could operate in a country to avoid laws
3. Accountability issues: laws and stuff
Globalisation is bad for ethics:
- Can be described as producing a race to the bottom in terms of wages, workers rights and environmental standards. E.g. Rana Plaza incident - people were killed
- The gap between rich and poor is growing.
- A Kantian may have concerns. Treating workers as a means to an end
Advantages:
- Apparently globalisation has reduced the number of extremely poor in India by 200 million. A Utilitarian may point to the benefits
- The increase in technological advantages in communication may make it more difficult for companies to hide unethical practice. TV news can informs millions about unethical behaviours.
Kantian ethics
- For Kant, our duty takes precedence over making money
- Employer has a duty to pay a fair wage
- Example of a shopkeeper who treats customers well because it is good for business
- All stakeholders need to be considered
- Puts value on honesty
- Whistleblowing could be supported where there are ethical concerns as the truth needs to be told
- John Rawls: he defines justice as fairness and argues equality should be understood as equality of opportunity rather than equality
Advantages:
- the principle of universal law requires that we are consistent in our ethical decisions
- The principle of not treating others as a means to an end makes sure that employees and consumers are not treated as just data or numbers.
- Kant’s focus on the importance of motives ensures that corporate social responsibility is genuine
Disadvantages:
- A very abstract theory that does not always work well in the real world. It is naïve to think that a business should not consider profit - a business cannot survive without profit
- The principle of universal law is not useful in business ethics as each situation is unique and different
- Focusing on motives is difficult as motives cannot be proved. Cannot tell if someone is actually acting out of duty
- conflicting duties - we may not be able to satisfy everyone
Utilitarianism
- Many businesses operate by a utilitarian approach, using something called a cost-benefit analysis
- Bentham’s utilitarianism - there is a danger that the focus on pleasure and pain could be quite narrow and lead to shallow decision-making
- Act utilitarianism allows some flexibility
Advantages:
- businesses are results driven as it is a teleological theory. Focused on achieving the best outcome
- Act Utilitarianism gives flexibility - handle business decisions individually so better than a theory that is rule based
- Bentham’s utilitarianism is hedonistic. Advertisers use this principle of appealing to our desires - Suggest that Bentham is not wrong about our motives
- Utilitarianism depersonalises issues. Mill refers to the competent judge. Singer refers to the impartial observer
Disadvantages:
- very time consuming in a fast paced world - especially with the hedonic calculus
- Has no concept of rights and does not value justice. Bentham famously referred to belief in human rights as ‘nonsense on stilts’
- Experience of pleasure and pain and our ideas of greater good are often subjective. May see a situation very differently from someone else.
- Difficult to compare the different ‘goods’ that m ay or may not be achieved by any given decision. E.g an improvement in working conditions could be measured subjectivity
“Is good ethics good business?” Essay
A: Adam Smith - argued that businesses and customers have a symbiotic relationship. If you were to overcharge consumers then this would likely harm the reputation of the business. A business is built on reputations and confidence. Moreover with employees it is also symbiotic
CA: Kant may argue that it doesn’t matter if it is good business, just matters about intention. Shopkeeper analogy. If he lost money would still be ethically good. Business should prioritise ethics over making business. So good ethics according to Kant would not be good business
E: Kant’s ideas are narrow minded as ignores how most businesses need profit to exist. Therefore cannot use Kantian ethics if business was to still survive. Good ethics is good business as it can serve as a
A: Good ethics can serve as a differentiator in the market. Can attract a loyal consumer base providing a competitive edge. E.g. util suggests that actions should be judged by consequences therefore ethical benefits can lead to large overall societal benefits e.g. the body shop
CA: Milton Friedman: In highly competitive markets, the added cos of ethical practices may make it difficult for companies to compete on price. Leading to a loss of market share. Especially in competitive market such as the clothing market. Globalisation has ensured that costs stay low due to different minimum wages in different countries.
E: Although competitive strategies might be constrained, good ethics may also attract talented employees which allows for innovation…
