BUSINESS ETHICS Flashcards
Friedman’s shareholder theory
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.
Friedman quote
“Only people can have responsibilities, not artificial businesses”
Freeman’s stakeholder theory
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?
Freeman’s separation fallacy
To say you can separate business from ethics is a lie
Freeman’s responsibility principle
“Most people, most of the time, accept responsibilities for the effects of their actions on others”
Freeman quote
“Businesses do and should create value for shareholders”
What are the 4 parts of corporate social responsibility?
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.
What is the difference between the bottom line and the triple bottom line?
Bottom line - profit or loss
Triple bottom line - people planet and profit
Buffet quote on corporate social responsibility
“It takes 20 years to build a reputation and 5 minutes to ruin it”
Roddick quote on corporate social responsibility
“Public good not private greed”
How did corporate social responsibility change in the 1980s?
There was a rise in environmental awareness and a desire for a healthy market post stock crash
Adam Smith’s invisible hand theory
When business owners act in the interest of making the most profit, there are unintended outcomes which benefit society.
Baggini’s evaluation that good ethics is necessary for good business.
There are times when behaving badly has increased profit eg slavery
Baggini’s evaluation that a business wold be more successful if it were ethical
This leads to the assumption that any successful business is ethical which isn’t logical.
Baggini’s evaluation that good business generally correlated with good ethics
there are many examples of unethical businesses succeeding.
Whistleblowing complicity theory
if your work is directly causing wrongdoings you can publicly whistleblow.
Whistleblowing standard theory
If you aware of wrongdoings in the business you must proceed internally then public.
1998 Public Interest Disclosure at work Act
Protects by giving times in which whistleblowing where they can’t face detriment.
Whistleblowing
When an employee discloses wrongdoing to the public.
Globalisation
The integration of economies/industries/markets/cultues and policies across the world.
Benefits of globalisation
Cheaper consumer products
Employment opportunities in low economy countries
Can be beneficial if done ethically (eg fair trade)
Less environmental controls
Disadvantages of globalisation
Poor working conditions
Low wages
Potential to ruin reputation
Mill’s harm principle (utilitarianism)
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.
Utilitarianism on animal welfare
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.
Utilitarianism - Bentham
For factory workers to be valued in the same way as stakeholders, they would need rights to protect them against exploitation.
Bentham quote (Utilitarianism)
“Every person to cont for one and no one to count for more than one”
Sidgwick’s axiom of justice (Utilitarianism)
An action right for me is right for those in similar situations.
Sidgwick’s axiom of prudence (Utilitarianism)
A small present good shouldn’t be preferred to a greater future good.
Sidgwick’s axiom of benevolence (Utilitarianism)
When making decisions, everyone is equally as important as me/my preferences.
Kingdom of ends (Kant)
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.
Ends not means (Kant)
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.
Universal law (Kant)
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.
Hepburn on Kant’s universal law
His awe and wonder of the natural world would reject using it in an instrumental way.
Emily Brady on Kant’s universal law
Saves Kant from the charge of anthropocentrism by highlighting the moral relationship between humans and the environment.
Kant quote on the environment
“Starry stars above and the moral law within”
Warns us against unsustainable views around nature.
Unethical businessman example (Kant)
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.
Grocer example (Kant)
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.
What is the Utilitarian view on CSR?
Classical Utilitarianism (Bentham) may justify social exploitation if it maximises happiness, while Rule Utilitarianism supports ethical rules that prevent exploitation.
How does Kantian ethics view CSR?
Kant argues that violating CSR (e.g., exploitation or environmental harm) is always wrong because it treats people as a means therefore violating the formula of the end in itself.
What is Milton Friedman’s view on CSR?
He believes businesses have no ethical responsibility beyond making profits within a fair market.
How does Marxism critique CSR?
Marxists argue that CSR is often hypocritical, making businesses appear ethical while they still exploit workers.
“Window dressing”
How do Utilitarians view globalisation?
They support free markets for economic growth but may oppose monopolisation and exploitation if it decreases overall happiness.
What is Kant’s view on globalisation?
Kant opposes it if it leads to exploitation, as it violates the principle of treating people as ends rather than means.
How does Marx view globalisation?
He argues it concentrates power in the hands of capitalists while exploiting workers.
What is Milton Friedman’s stance on globalisation?
He supports it as part of free-market capitalism, arguing businesses should focus on profit rather than social issues.
How does Utilitarianism view whistleblowing?
It supports whistleblowing if it prevents more harm than it causes, though predicting consequences is difficult.
What is Kant’s view on whistleblowing?
Kant always supports whistleblowing because telling the truth is a moral duty, and unethical business practices must be exposed.
How does Friedman view whistleblowing?
He may justify it only if a business breaks legal market rules but otherwise sees it as disruptive to competition.
What is the Marxist perspective on whistleblowing?
Marxists encourage whistleblowing as a way to expose capitalist exploitation.
How does Will MacAskill defend sweatshops?
He argues that sweatshops provide jobs that prevent starvation, making workers better off.
What is the Utilitarian view on sweatshops?
Act Utilitarianism may justify them if they increase overall happiness, while Rule Utilitarianism supports improving conditions over time.
What is Kant’s view on sweatshops?
He opposes them because they exploit workers as mere means.
How does Marx view sweatshops?
He sees them as a clear example of capitalist exploitation, where businesses profit while workers suffer.
What is the calculation issue in Utilitarianism?
It is difficult to predict the consequences of actions accurately, making Utilitarian decision-making unreliable.
How does Kant respond to the calculation problem?
He argues ethics should focus on moral duties rather than unpredictable consequences.
How does Mill’s Rule Utilitarianism solve the calculation problem?
By following moral rules that have been judged to maximise long-term happiness, rather than evaluating each situation individually.
What is Noam Chomsky’s argument against corporate power?
Allowing businesses to exploit workers gives them too much power, leading to further exploitation and loss of rights.
What is Adam Smith’s view on capitalism?
He argues that free markets drive innovation and prosperity through competition.
What is Karl Marx’s critique of capitalism?
He believes capitalism is inherently exploitative, dividing society between business owners and workers.
How do Utilitarians view capitalism?
They support it when it increases happiness but warn against monopolies that harm competition.
What is Kant’s stance on capitalism?
He accepts it but argues it must be restricted to prevent exploitation.
How does Marx view capitalism in relation to CSR and whistleblowing?
He believes capitalism is too exploitative for CSR or whistleblowing to make a real difference.
What is the main criticism of Marx’s view?
Communism has repeatedly failed in practice, and capitalism has significantly reduced poverty worldwide.
What is the economic problem with Friedman’s view?
Unchecked capitalism can lead to monopolies, which destroy competition and innovation.
How do Kant and Mill provide a middle-ground approach to capitalism?
They both support capitalism but argue for ethical restrictions to prevent exploitation and ensure fairness.
