BUSINESS ETHICS

Question 1

Friedman’s shareholder theory

Answer 1

The social responsibility of a business is primarily to increase profits while not committing fraud and allowing a free market to function.

A CEO of a company shouldn’t have responsibility beyond an employees wishes as this means money would be spent differently.

CEO’s are only employed to raise profits.

Question 2

Friedman quote

Answer 2

“Only people can have responsibilities, not artificial businesses”

Question 3

Freeman’s stakeholder theory

Answer 3

There are several questions that are always open when making a business decision:

Who’s value is created/destroyed?
Who is harmed/benefitted?
Who’s rights are recognised/infringed?
How will I be perceived?

Question 4

Freeman’s separation fallacy

Answer 4

To say you can separate business from ethics is a lie

Question 5

Freeman’s responsibility principle

Answer 5

“Most people, most of the time, accept responsibilities for the effects of their actions on others”

Question 6

Freeman quote

Answer 6

“Businesses do and should create value for shareholders”

Question 7

What are the 4 parts of corporate social responsibility?

Answer 7

Economic - earning profit for others

Legal - complying with the law

Voluntary - Promoting human welfare and being a good citizen

Ethical - not acting for profit, but doing what is right/just/fair.

Question 8

What is the difference between the bottom line and the triple bottom line?

Answer 8

Bottom line - profit or loss

Triple bottom line - people planet and profit

Question 9

Buffet quote on corporate social responsibility

Answer 9

“It takes 20 years to build a reputation and 5 minutes to ruin it”

Question 10

Roddick quote on corporate social responsibility

Answer 10

“Public good not private greed”

Question 11

How did corporate social responsibility change in the 1980s?

Answer 11

There was a rise in environmental awareness and a desire for a healthy market post stock crash

Question 12

Adam Smith’s invisible hand theory

Answer 12

When business owners act in the interest of making the most profit, there are unintended outcomes which benefit society.

Question 13

Baggini’s evaluation that good ethics is necessary for good business.

Answer 13

There are times when behaving badly has increased profit eg slavery

Question 14

Baggini’s evaluation that a business wold be more successful if it were ethical

Answer 14

This leads to the assumption that any successful business is ethical which isn’t logical.

Question 15

Baggini’s evaluation that good business generally correlated with good ethics

Answer 15

there are many examples of unethical businesses succeeding.

Question 16

Whistleblowing complicity theory

Answer 16

if your work is directly causing wrongdoings you can publicly whistleblow.

Question 17

Whistleblowing standard theory

Answer 17

If you aware of wrongdoings in the business you must proceed internally then public.

Question 18

1998 Public Interest Disclosure at work Act

Answer 18

Protects by giving times in which whistleblowing where they can’t face detriment.

Question 19

Whistleblowing

Answer 19

When an employee discloses wrongdoing to the public.

Question 20

Globalisation

Answer 20

The integration of economies/industries/markets/cultues and policies across the world.

Question 21

Benefits of globalisation

Answer 21

Cheaper consumer products

Employment opportunities in low economy countries

Can be beneficial if done ethically (eg fair trade)

Less environmental controls

Question 22

Disadvantages of globalisation

Answer 22

Poor working conditions

Low wages

Potential to ruin reputation

Question 23

Mill’s harm principle (utilitarianism)

Answer 23

Rejects damaging the environment - businesses should protect the beauty of the planet as it generates pleasure.

Protects the rights of workers in unsafe or dangerous working environments.

Question 24

Utilitarianism on animal welfare

Answer 24

Animals can suffer in the same way that humans can - so they must be counted for in the greatest good of the masses. This goes against animal cruelty.

Question 25

Utilitarianism - Bentham

Answer 25

For factory workers to be valued in the same way as stakeholders, they would need rights to protect them against exploitation.

Question 26

Bentham quote (Utilitarianism)

Answer 26

“Every person to cont for one and no one to count for more than one”

Question 27

Sidgwick’s axiom of justice (Utilitarianism)

Answer 27

An action right for me is right for those in similar situations.

Question 28

Sidgwick’s axiom of prudence (Utilitarianism)

Answer 28

A small present good shouldn’t be preferred to a greater future good.

Question 29

Sidgwick’s axiom of benevolence (Utilitarianism)

Answer 29

When making decisions, everyone is equally as important as me/my preferences.

Question 30

Kingdom of ends (Kant)

Answer 30

Morality is rooted in the universal moral law and in our dignity - therefore principles matter and businesses have duty to wider society. Self-regulation beyond laws surrounding CSR would be applauded.

Question 31

Ends not means (Kant)

Answer 31

The exploitation of workers is using them as a means for more profit - Kant would reject this.

If a business sells substandard products it uses customers as a means to an end - Kant would reject this.

Question 32

Universal law (Kant)

Answer 32

Kant requires us to be consistent in decisions, which is beneficial to businesses as this generated trust.

This also requires us to consider our duty to future generations.

Question 33

Hepburn on Kant’s universal law

Answer 33

His awe and wonder of the natural world would reject using it in an instrumental way.

Question 34

Emily Brady on Kant’s universal law

Answer 34

Saves Kant from the charge of anthropocentrism by highlighting the moral relationship between humans and the environment.

Question 35

Kant quote on the environment

Answer 35

“Starry stars above and the moral law within”

Warns us against unsustainable views around nature.

Question 36

Unethical businessman example (Kant)

Answer 36

Contradiction of will.

A businessman wants a healthy environment as he recycles, composts and embraces nature for selfish reasons.
But this longing for a healthy environment isn’t genuine as his exploits low paid/skilled workers and deforests land as part of his business.

Question 37

Grocer example (Kant)

Answer 37

It is a shopkeepers duty not to overcharge customers, so a shopkeeper keeps fair prices.

But he is doing this out of self-interest to increase his customers\profit through a good reputation, he is not doing it to benefit his community and to act out of good will.