Business Ethics Flashcards

Question

What are the ideas behind " good ethics is good business "?

Answer 1

① business decisions are not inherently unethical so business decisions are likely to be ethical and should align with ethical considerations ②business decisions are inherently unethical as they focus on profit but businesses perform better when they base decision on ethical principles ③business decisions do not involve ethics but when they do, ethical guidance ( such as company policies ) is beneficial

Answer 2

→a strategic choice rather than a given → integrate ethics ( reputational damage, legal risk, customer distrust) leads to sustaining business success in the long run → so many will take a proactive approach

Answer 3

• Customer loyalty results in greate revenue and sustained growth → honour agreements → treat suppliers fairly → courteous service

Answer 4

• Price - sensitive customer who prioritise cost over ethics •aggressive competitors who offer similar products or services at lower prices at the expense of ethics

Answer 5

• Capitalist economy focus on maximising products. → drives decision making • competitive pressures from: → shareholders → consumers → market conditions → businesses who compete for market share, talent and investment Pushes companies to make decisions to maximise short term gains, often at the cost of ethics

Answer 6

• When ethical practices increase costs, businesses may feel pressured to sacrifice ethics to stay competitive → pay fair wage → materials harming environment vice versa Competition inherently forces businesses to compromise on ethics even if harming long term success • unethical practices may offer subpar or unnecessary products or make it difficult for customers to leave contracts → field short term profit • consumers or regulators begin to punish unethical behaviour → shows balancing act business must play between short term profit and long - term reputation: complex nature

Answer 7

Consumers → demand low prices → fast delivery → constant innovation Shareholder → pressure for high return •conflict of interest where businesses may feel compelled to cut corners & adopt unethical practices to meet customer expectations and shareholder demands • ethical business strategies becoming branding strategy rather than core business principle

Answer 8

• A branding choice to attract customers who have integrity • marketing tool • " ethics washing " to appear ethical without fully integrating ethical practices

Answer 9

- suggests that ethical business practices lead to long-term success - Ethical companies build trust with consumers, attract loyal customers, and avoid legal issues - However, in highly competitive markets, businesses may prioritise profit over ethics, raising questions about whether ethical business practices always lead to financial success.

Answer 10

- Ethical businesses can prioritise fair wages, honest advertising, and sustainability while still being profitable. - However, critics argue that businesses are ultimately profit-driven, which can lead to unethical practices if they benefit the company financially.

Answer 11

- legal penalties, loss of customer trust, and reputational damage - Scandals or exploitative practices may generate short-term profits but often result in boycotts, lawsuits, or stricter regulations that harm long-term success.

Answer 12

- Financial institutions approved risky sub-prime mortgages, knowing that many borrowers would struggle to repay them. - These loans were then bundled into complex financial products and sold to investors. - While profitable in the short term, this unethical practice led to a global financial collapse - This demonstrates the catastrophic consequences of prioritising profit over ethics.

Answer 13

- may feel pressured to cut ethical corners to remain profitable. - Shareholders and investors often prioritise short-term financial gains encouraging companies to take risks or exploit loopholes. - weak regulations or lack of consumer awareness can allow unethical practices to continue unnoticed.

Answer 14

- Consumers have power through their purchasing choices. - If they prioritise ethical brands, businesses are incentivised to adopt ethical practices - However, if consumers prioritise low prices over fair wages or sustainability, businesses may feel justified in cutting ethical corners to meet demand.

Answer 15

- Ethical practices can increase costs, making it harder for businesses to compete with companies that cut corners. → For example, paying fair wages or using sustainable materials can reduce profit margins. - Many consumers still choose cheaper, less ethical options.

Answer 16

- Companies can create ethical policies, establish corporate social responsibility programs, and consult ethical experts when making important decisions. - Ethical training for employees and transparency in business operations can also help integrate ethics into company culture.

Answer 17

- Businesses have multiple stakeholders, including customers, employees, shareholders, and suppliers, all with different interests - Decisions that benefit one group may harm another, making ethical choices more complicated than individual moral decisions.

Answer 18

- Some argue that stricter regulations are necessary to prevent unethical practices, as businesses may not self-regulate effectively. - Others believe that over-regulation stifles innovation - Businesses should have the freedom to make their own ethical choices.

Answer 19

• Businesses are accustomed to cost-benefit analysis, which mirrors utilitarian calculations. • Utilitarianism focuses on maximising overall happiness, which can be measured similarly to economic utility. • Quantifying utility allows for a structured, mathematical approach to ethical decision-making. • It provides a flexible framework where decisions are assessed based on their outcomes rather than fixed moral rules.

Answer 20

• Business environments are complex, making it difficult to calculate the full impact of decisions on all stakeholders. • Quantifying pleasure and pain is subjective, unlike financial costs, which businesses can easily measure. • Businesses may prioritise measurable financial gains over abstract ethical considerations. • In fast-paced industries, there may not be time for detailed utilitarian calculations.

Answer 21

• Act utilitarianism: Would justify zero-hours contracts if they increase overall happiness, e.g., benefiting many customers with lower prices despite harm to workers. • Mill’s utilitarianism: Would distinguish between higher and lower pleasures, potentially condemning the exploitation of workers. • Rule utilitarianism: Would oppose zero-hours contracts if they generally cause more harm than good, supporting long-term ethical business practices.

Answer 22

• It prioritises long-term benefits over short-term profit maximisation. • Ensures ethical consistency in business practices rather than case-by-case calculations. • Recognises that ethical rules benefit society as a whole, contributing to trust in businesses. • Supports corporate social responsibility by promoting policies that balance profit with ethical obligations.

Answer 23

• The categorical imperative establishes universal ethical principles, clarifying what actions are always permissible or impermissible. • Businesses following Kantian ethics would act with integrity, ensuring consistency in decision-making. • It aligns with the idea that businesses should not exploit people for profit but instead treat all stakeholders with respect.

Answer 24

• The third maxim (universal law) means businesses should act in ways acceptable to all, but competitors may take advantage of ethical companies. • The second maxim (treating people as ends) requires considering the needs of all stakeholders, which can be impractical in complex business settings. • The first maxim (universal truth-telling) could prevent businesses from engaging in strategic deception, potentially putting them at a competitive disadvantage.

Answer 25

• It demands businesses act in a way that could be universally applied, aligning with ethical corporate policies. • Encourages businesses to consider the impact of their actions on society, fitting with stakeholder theory. • Suggests businesses should avoid exploitative practices, even if competitors do not follow the same ethical standards.

Answer 26

• Ethical businesses may lose out to competitors willing to cut corners for profit. • Complex stakeholder interests make it difficult to always act with universal fairness. • Strict adherence to honesty and fairness can sometimes conflict with strategic business decisions.

Answer 27

• Globalisation is the increasing integration of economies, industries, markets, cultures, and policymaking worldwide. • TNCs have driven globalisation by using technological advancements to move capital, labour, and production between countries seamlessly. • They place different business functions in the most profitable locations, taking advantage of low wages, tax incentives, and less regulation. • Their influence spans a vast range of stakeholders, from governments to workers in developing nations.

Answer 28

• Globalisation has accelerated economic development and technological advancement. • TNCs moving production to low-wage economies has provided jobs with higher wages than traditional farming. • Jeffrey Sachs (The End of Poverty, 2005) states that globalisation has helped lift: • 200 million people out of extreme poverty in India. • 300 million people out of extreme poverty in China since 1990.

Answer 29

• Manufacturing jobs in the US and Europe have declined as production shifted to low-wage economies. • Consumers benefit from cheaper products, increasing consumption and fuelling a consumer culture. • However, former manufacturing workers often feel abandoned by corporations that prioritise cost-cutting over domestic job retention. • This economic shift has contributed to job insecurity and resentment towards globalisation.

Answer 30

• Many developing countries have weak labour laws, allowing corporations to exploit workers. • Low wages, long hours, and poor working conditions are common. • Factory owners face pressure to meet large orders at the lowest cost, sometimes leading to dangerous conditions. → Example: The Rana Plaza disaster (2013) in Bangladesh exposed the dangers of weak safety enforcement

Answer 31

• 24 April 2013: An eight-storey factory in Bangladesh collapsed, killing 1,100+ workers and injuring over 2,500. • The day before, cracks appeared in the building, prompting the closure of shops on the ground floor. • Factory workers were forced to return to work under threats of losing a month’s pay. • The building’s upper floors were illegally constructed and not reinforced to support heavy manufacturing equipment. • The disaster became a symbol of globalisation’s ethical failures, raising concerns over corporate responsibility.

Answer 32

• Public pressure forced companies to take corporate social responsibility (CSR) more seriously. • A compensation fund was created for victims and their families, with businesses urged to contribute. • It took three years for the fund to reach its $30 million target, showing corporate reluctance. • Increased scrutiny led to stricter health and safety inspections in Bangladesh, resulting in the closure of 35 unsafe factories.

Answer 33

• Some argue that globalisation exports unethical practices by allowing corporations to exploit weaker regulations in developing countries. • Others claim it can raise ethical standards through international scrutiny and corporate accountability. • High-profile disasters, such as Rana Plaza, increase pressure on businesses to improve working conditions and adopt CSR policies.

Answer 34

• Utilitarianism seeks to maximise the greatest good for the greatest number, making it a supportive framework for globalisation. • Globalisation has significantly increased economic prosperity, particularly in developing nations. → The World Bank estimates that since China opened its economy in 1978, 800 million people have been lifted out of poverty, largely due to globalisation. • Developed nations benefit through cheaper goods and services, expanding consumer choice and increasing affordability. • The widespread acceptance of globalisation supports the utilitarian claim that its benefits outweigh its disadvantages, as very few nations impose protectionist trade barriers to resist it.

Answer 35

• Critics argue that utilitarianism provides moral justification for economic exploitation by wealthier nations. • Rather than distributing benefits fairly, globalisation exacerbates global inequalities, disproportionately favouring wealthier nations that control global trade. • Western corporations outsource production to low-wage economies, ensuring their own economic dominance while exploiting the cheapest labour possible. • Critics claim this undermines local industries in developing nations, forcing them into dependence on multinational corporations rather than fostering true economic independence.

Answer 36

• Kant (1724–1804) argued that all individuals should have equal freedom, only restricted to ensure fairness for all. • Globalisation creates structural inequalities, allowing wealthier nations and corporations to dominate weaker economies. • Transnational corporations (TNCs), often wealthier than entire national governments, exert influence that prioritises profit over human dignity, violating Kant’s principle of treating people as ends in themselves. • Workers in sweatshops or exploitative labour conditions are treated as mere means to an end, rather than autonomous moral agents. • The Kantian universalisation principle implies that if exploitative business practices were universal, global economies would be built on injustice rather than mutual benefit.

Answer 37

• Bowie’s ‘Kantian Perspective’ provides a framework for ethical business conduct, focusing on meaningful work and fairness. • Meaningful work should: → Be freely chosen, allowing individuals autonomy over their roles. → Support rationality, meaning workers should not be forced into degrading or dehumanising conditions. → Provide a living wage that supports physical well-being and enables workers to achieve a reasonable standard of life. → Avoid corrupting moral development, ensuring work does not involve dishonesty, coercion, or manipulation. • A Kantian business should: → Consider all affected stakeholders, not just shareholders or executives. → Ensure no single stakeholder group dominates decision-making. → Prioritise justice over numerical outcomes, meaning workers’ rights cannot be sacrificed for efficiency. → Recognise that profit-making must involve beneficence, meaning businesses have a moral duty to contribute to social good rather than merely generating profit.

Answer 38

• Numerical, outcome-based ethics, which allow businesses to justify harmful actions if they maximise overall happiness. → Example: In a mass redundancy scenario, a utilitarian might justify firing thousands of workers if it leads to greater economic prosperity for consumers and shareholders. • A Kantian approach rejects this reasoning, arguing that each worker must be treated as an end in themselves, meaning their dignity and rights must not be sacrificed for corporate gain. • Kantian ethics provide a more rigid moral framework, ensuring that workers are not discarded as economic variables but respected as rational individuals deserving of fair treatment.

Answer 39

• Products: Market products as environmentally friendly or fair trade. • Donations: Donate small amounts to charity for every product sold or make large, public donations. → Example: Green energy companies or products with fair trade logos.

Answer 40

• Calculated Strategy: To build a positive brand image and attract customers. • Goal: To increase profits, rather than being deeply motivated by social concerns.

Answer 41

→ Example: Car manufacturers promoting environmentally friendly cars while cheating on emissions tests. • Consequence: Public backlash and a decrease in sales for companies caught cheating, while others who did not cheat gained market share.

Answer 42

• Stakeholder Pressure: External pressure from customers, investors, and other stakeholders forces businesses to act ethically. → Example: Businesses face repercussions if they do not meet ethical expectations, as demonstrated by the emissions test scandal.

Answer 43

• Friedman’s View: The social responsibility of business is solely to increase its profits. • Business vs. Individual: A business is not like an individual and cannot accept social responsibility beyond profit maximisation. • Criticism: Society’s expectations of businesses to be more ethical are hypocritical in Friedman’s view.

Answer 44

• Environmental Concerns: It’s no longer acceptable for businesses to ignore environmental impact. • Globalisation: Transnational businesses now impact communities and the global economy, leading to the demand for more corporate responsibility. • Privatisation: Many services previously provided by the government are now handled by profit-seeking businesses, requiring ethical considerations.

Answer 45

• Capitalism drives technological progress and allows individuals to express individuality through consumption. • Economic Growth: Consumers drive the economy by acquiring more goods, creating progress and wealth.

Answer 46

• Greed: Capitalism encourages greed, irresponsibility, and materialism. • Materialism: Human life becomes centered around accumulating possessions at the expense of relationships, morality, and spirituality. • Environmental Concerns: The capitalist focus on profit can lead to unsustainable exploitation of natural resources.

Answer 47

• Work Ethic: Capitalism rewards hard work, discipline, and frugality, linked to Protestant beliefs about salvation. • Incentivised Behavior: Capitalism incentivises individuals to work harder, benefiting both the individual and society.

Answer 48

• Ethical Foundations: Businesses with a strong ethical foundation are more successful, as customers prefer to support ethical companies. • Mission Statements: Transnational corporations emphasise ethical values in their mission statements, such as: → General Electric: “Build, move, power, and cure the world.” → Toyota: “Lead the way to the future of mobility.” → Microsoft: “Enable people to realise their full potential.”

Answer 49

• Exploitation: Globalisation has allowed businesses to exploit cheap labor in countries with fewer ethical protections, mirroring the unethical practices of the 19th century. • Weak Labor Protections: Transnational companies often move production to countries without the labor laws and protections present in the West.

Answer 50

• Poor Conditions: The industrial revolution was marked by low wages, poor working conditions, and dangerous practices. • Worker Struggles: Workers fought for protections such as minimum wage, legal working hours, and health and safety standards.

Answer 51

• Utilitarian Ethics: Like the industrial revolution, globalised business often justifies unethical practices in the pursuit of profit, ignoring human suffering. • Exploitation: Workers are often treated as commodities, with their well-being disregarded for economic gain.

Answer 52

• Charitable Efforts: Some corporations, like Microsoft and Google, have made sincere efforts to contribute to social good. • Microsoft: Donated over $1 billion to charity since 1983. • Google: Investing $1 billion in providing affordable internet to developing countries.

Answer 53

• Cultural Differences: Non-Western businesses bring their own ethical values, which may conflict with Western ethical standards. • Challenges: Companies must navigate these differences while adhering to the ethical expectations of the societies in which they operate.

Answer 54

• Ethical Demand: As societies push for more corporate social responsibility, businesses may increasingly adopt ethical practices. • Positive Impact: Good ethics could become a key component of successful global business, benefiting both the corporation and society.