Business Ethics Flashcards
Who challenged the idea of social corporate responsibility?
Milton Friedman. Argued that as employees they must serve the corporation and that the company cannot have responsibilities - except making money for shareholders.
What does corporate social responsibility involve?
-Adam Smith - ‘good ethics is good business’. Pragmatic approach
-Kantian sense of duty
-religious sense of responsibility towards how we treat humans and the rest of creation.
Adam Smith
Father of Capitalism, ‘good ethics is good business’. Essentially utilitarian point of view.
He argues that treating our customers and staff badly will ultimately harm the , business, therefore it is in our best interest to treat others well.
Argues we always do it out of self-interest.
Kant
good ethics matters more than good business. Duty to do so. Gives example of a shopkeeper charging fair prices because it causes good business. Argues this is not morally good.
Whistleblowing
Private - can raise concerns internally within the company. Companies or corporations will have whistleblowing policies to deal with this.
Public - concerns outside the corporation e.g. by alerting the media.
Pros of whistleblowing
Kant argues that an employee has a duty to do so no matter what the negatives are.
Ensures that companies take their corporate social responsibilities seriously.
Encourages integrity from employees.
Cons of whistleblowing
Friedman argues we have a greater responsibility towards our company than we do to what is right and wrong. What matters is earning money.
A utilitarian would weigh up what produces the most pleasure. For example, if you are reporting paying people below minimum wage in order to maintain low clothing costs, this may cause more pleasure than pain so under Bentham, you shouldn’t report.
Example of Whistleblowing
Boeing engineer John Barnett reported years before accident happened that there was something wrong with the engineering of planes. Ignored and lost job. Accident of plane door flying off and other incident. FOUND DEAD - COMMITED SUICIDE.
Case study - Rana Plaza
Factory collapsed in Bangladesh due to three extra stories built without a permit. 1131 people died. Factory not planned for industrial use. This caused structure and foundations to collapse. CAUSE = GLOBALISATION.
Globalisation and its effects
Integration of economies, trading and political movements.
Caused increased competition, loss of jobs in some countries (such as UK and US) and an increase in others such as China due to lower production costs. Developing countries have a chance for economic growth.
