Business Ethics Flashcards
what is a business?
a business is an organisation where together to make and sell products or services with the aim to earn profit
what is business ethics?
business ethics is the balancing of rights and responsibilities of different groups, while at the same time, making a profit
what are issues in business ethics to consider?
- corporate social responsibility (if a business just has responsibility towards profit or the community)
- whistleblowing (if an employee should disclose the wrongdoings of their business to an employee or the public)
- Good ethics is good business (if good business decisions are always good ethically)
- Globalisation (if having a globalised market for business encourages the pursuit of good ethics)
what is corporate social responsibility (CSR)?
CSR is the idea that a company works to maintain a balance between profit and working to provide better opportunities for people
what are arguments against corporate social responsibility (CSR)?
MILTON FRIEDMAN:
- businesses only have the responsibility to make profit
- if businesses try to act morally responsible, they become less effective, so will make less money
- if a business focuses making more profit, then they will eventually improve everyone’s life
Is it ethical for a business to take on CSR in hopes of increasing profit?
YES:
BENTHAM [The Trolley Problem]
- only the consequence matters, so the corporation must act according to the principle of utility
FRIEDMAN
- a corporation’s only responsibility is to maximise profits for shareholders
NO:
KANT [The Honest Shopkeeper]
- the corporation must act according to duty’s sake
MILL [The sadistic Guard]
- the corporation must work for the general utility of society
what is whistleblowing?
whistleblowing is when someone with an insider status shares non public info about illegal activity that’s happening with hopes to stop it
what are contemporary examples of whistleblowing?
SPORTS DIRECT:
- info was received from sports direct and hermes were underpaying their couriers
- Hermes drivers received a higher rate for the heavier parcel but they were often paid for packets (so lower rates)
why does Norman Bowie disagree with whistleblowing?
- ## Norman Bowie argues that whistleblowing violates a “prima facie duty of loyalty to one’s employer”
What is the duty of loyalty?
Duty of loyalty is the disclosure of inside info which might actively harm the company’s interests
what is a case study for whistleblowing?
EDWARD SNOWDEN:
- he was an employee of the NSA
- In 2013, he told newspapers that the US and UK were monitoring the communications of citizens around the world, without consent
- this was seen as a serious breach of loyalty
- in 2020, US federal court ruled his actions as illegal and unconstitutional
what is good ethics= good business?
good ethics = good business is the idea that making the right ethical choices as a business will always benefit you as a business
what are the three approaches to the idea that good ethics = good business?
- good ethics is good business
- good ethics is bad business
- good ethics has nothing to do with business
what is a case study to show that good ethics is good business?
PRET A MANGER:
- they claim to create a healthier fast food option
- they aim to maintain sustainability, employee welfare and Fair Trade standards
- they have created a pret foundation since 1966 which looks to support homeless charities
THIS WOULD CREATE GOOD BUSINESS AS:
- it would appeal to more customers due to better image
- there will be a smoother hiring process
- there would be employee loyalty
why is good ethics bad business?
- being ethical risks increasing costs and reducing profit
- MILTON FRIEDMAN [ there is no good ethics in business ]
- customers have very little loyalty to a business so they may go to another store that appeals to them more, or is cheaper
why does good ethics have nothing to do with business?
- MILTON FRIEDMAN
- KANT
what is globalisation?
globalisation is the integration of marketplaces and cultures across the world
what are transnational corporations?
transnational corporations are organisations which own or control the production of goods in other countries
how has globalisation impacted businesses?
- businesses can now make more profit by trading products globally to more customers
- they have increased influence/power
what are the positives of globalisation?
- given people jobs as it has reduced the extreme poor in india and china
- creates cheaper products, which fuels consumerism
what are the negatives of globalisation?
- because of weak regulation, these new jobs can often be found with unsafe working conditions
- in the western countries, the majority of factories have closed down; with people losing their jobs
is globalisation being handled ethically?
BENTHAM:
- the creation of millions of jobs is a positive with the extent of the criteria it reaches the hedonic calculus
MILL:
- the harm principle would reject the working conditions that those working in their factories face
KANT:
- the impacts of globalisation shows how the super rich impose their will on the poor, which would breach the second and third formulations of the categorical imperative
what are scholarly views on globalisation?
KANTIAN ETHICS:
1. The three postulates - business practices of transnational corporations fail to protect the autonomy of workers
2. categorical imperative - his views would clash with the inequalities created by globalisation as they breach the second and third formulations of the categorical imperative
UTILITARIANISM:
1. Hedonic calculus - the pain of the working conditions is greater than the level of pleasure produced by globalisation
2. Utility - many argue that the rich benefit more than the poor as they are exploited
3. rule utilitarianism - The Harm principle would prevent the poor working conditions that transnational corporations have inflicted on workers
does globalisation encourage or discourage the pursuit of good ethics?
YES, ENCOURAGES:
- utilitarianism would say that globalisation fulfils the principle of utility as it maximises pleasure and minimises pain for both workers and customers
- more attention in the media, which raises awareness on the conditions in third world countries, is making consumers for better ethics behind the products they buy
NO, IT DISCOURAGES:
- globalisation just increases the thirst for profit and impure motives which stops us from doing our duty
- creates loopholes for transnational corporations who want to engage in unethical practices
