Business Ethics Flashcards
CSR
Idea that businesses have responsibilities to community and environment not purely profit driven
Stakeholder
Anyone with involvement with the business
ESG
Measure of how businesses are judged on their responsibility
Whistleblowing
An employee discloses unethical or illegal business practices to the employer or public
What is the cost of whistleblowing
May lose job, friends, poor treatment from managers
Who champions Shareholder Theory
Friedman
How does Friedman argue that CSR is wrong
CSR leads to socialism instead of capitalism, they cant have responsibilities and CSR districts businesses from their main purpose of profit, also implying pursuing profit is immoral
How does Friedman argue that pursuing profit leads to benefits for all stakeholders
When businesses are successful in making money that benefits employers in wages, when people have more money society in general becomes better as people become more charitable
What everyday business practices is effectively Act Utilitarian
Cost Benefit analysis holds many similarities to the hedonic calculus in mathematically weighing up the good and the bad of an action
Advantages of Utilitarianism in Business Ethics
- Businesses are results driven so a teleological theory makes sense
- Act utilitarianism gives flexibility to different situations which is vital in business
- Advertisement plays on ideas of customers pain and pleasure
- Enforces and objective approach to business which is important, competent judge and impartial observer
Disadvantages of Utilitarianism in Business Ethics
- Act requires prediction of all consequences which takes a lot of time which is detrimental in the business world
- Bentham and utility has no right and wrong so could result in unethical business practices
- Good and bad can be very subjective in different circumstances
- Difficult to compare goods that would be measured in different ways, envirinemtal or wages
How would Kantian value of duty work in business ethics
Employer has duty to pay a fair wage, whilst employee has a duty to work hard and not take excessive breaks or expenses
How does Kant display the importance of motive with the shopkeeper example
A shopkeeper treats customers well as it is good for business, this isnt purely good act as his motive for treating customers well is wrong, treating them as a means
Universalisability applied in business ethics
Good business practices must be universalisable, employees must always be payed a fair wage, taxes must be paid by businesses, environmental concerns cant be universalised.
People as ends applied in business ethics
Companies must treat customers well treating them as ends, not means to an end of profit, branding with fair-trade and greenwashing and false advertisement both take advantage of customers good will
Kingdom of ends applied in business ethics
Kant would favour stakeholder theory as this treats all people involved in a business as they should creating a kingdom of ends
Kant view on globalisation
Main effect of globalisation which is transnational companies are normally exploitative to governments and employees in less developed countries, not treating as ends
Rawls veil of ignorance in Business Ethics
If we didn’t know whether we were gonna be rich or poor then we would all agree larger taxes for the rich, businesses are ethically inclined to pay their taxes to create a fair society
strengths of Kant in business ethics
- universal law ensures consistent decision making that builds trust and equality
- Ensures customers and employees aren’t treated like numbers
- Focus on good motives ensures CSR is genuine and not a marketing ploy
Weaknesses of Kant in business ethics
- Very abstract and unrealistic as no business would prioiritse ethics over profit to the extent Kant suggests
- Universal law isnt helpful in business as situations are so unique
- Motive is empirically unverifiable
- Duties will conflict very often in businesses due to the large number of stakeholders, but Kant doesnt provide judgement on this, such as whistleblowing
Globalisation
Integration and connection of world economies
What is the main impact of globalisation
Business and social interaction isnt restricted to one area, decisions have larger worldwide impacts
Technological and political impacts of gloablisation
Technological - communication and travel technology allows businesses to conduct business instantly online, allows for larger companies
Political - Countries are no longer self sufficient with large reliance on trade increasing the interconnected nature of economies
MNC
Multinational corporations 2/3 world trade
What are the three areas where globalisation is relevant in business ethics
Cultural issues
legal issues
Accountability issues
Cultural Issues created by globalisation
Different cultures have different views on business ethics, matter like child labour, gender equality. another concern is that gloabalisation and branding is creating a loss of local identity and cultures