Business Ethics Flashcards
Corporate social responsibility
CSR is the theory that a business has ethical responsibilities to towards the environment and the communities it is part of or affects. There are two main types of CSR;
- Environmental: The responsibility a business has towards the environment.
- Community: The responsibility a business has to its social community, respecting human rights and avoid exploitation.
Whistleblowing
When someone, usually an employee, leaks information about the wrongdoings of a company. This could be bad business practices regarding employees, customers, society or the environment.
- The upside to whistleblowing is that the negative business practice is brought to light which gives it a better chance of being brought to an end.
- The downside is that the company might suffer financial losses or even go bankrupt, causing some of or all of its staff to lose their job. In cases where the company was doing good, that could also be stopped.
Globalisation
The phenomenon where businesses are now global entities spanning multiple countries and continents and its impact on stakeholders. Globally, economies, industries, markets, cultures and policymaking are integrated (connected).
Becoming global entities has given businesses an unprecedented level of money, and money is power. A business will do whatever it can to increase profit. If its new levels of power allow it to pressure peoples, cultures and governments, then it will do that. Businesses may be less likely to violate CSR in western countries, but globalisation certainly allows them to violate CSR in developing countries instead.
The issue of monopolies
If a business gains enough power over a market, they can essentially fix or rig the system, altering the way the market functions, to reduce or eliminate competition and ultimately benefit themselves. This is called a monopoly, when a business has such dominance or power over a market that the market ceases to have competition. Without competition, a market no longer creates innovation and economic progress.
Corporations, power, globalisation and monopolies
Since money = power, and some businesses can be so large thanks to globalisation, perhaps they are becoming more powerful than governments, which could be problematic since they aren’t accountable to anyone as they aren’t democratically elected.
This gives corporations the power to affect laws by financing the election campaigns of politicians. They can also make offers or threats to a government or state to change regulations and laws in ways that would favour their business.
Hypocritical
CSR is typically a centrist or centre-left position. Those further left often regard CSR as hypocritical window dressing, meaning making something appear good while overall it is bad. A business which engages in CSR for public relations purposes might be doing so to distract from their unethical practices. This can apply to capitalism in general, because by encouraging a slightly healthier version of capitalism, people might feel less motivation to address the problems of capitalism or they might even be deceived that capitalism is not the cause of the problems to begin with.
Utilitarianism - CSR
Free market capitalism is the idea that the only responsibility of a business is to maximise profit for its shareholders. Bentham & Mill think that the free market is generally the best way to maximise happiness.
They would likely accept environmental CSR because of how damaging climate change can be to happiness. However, regarding community CSR, they would probably reject philanthropy as a responsibility of business. Bentham did favour some regulations for employees like minimum wage. They would generally be against restrictions and responsibilities laid on business which would interfere with that.
Kantian ethics - CSR
“The second formulation would require that market interactions do not involve the treatment of people as mere means. Labour should not be treated merely as a commodity.
A basic level of respect must be given to employees and all stakeholders.
- Avoiding exploitation (community CSR). This includes paying workers enough, perhaps a minimum or even living wage.
- Providing a safe work environment (community CSR).
- Avoiding polluting the environment or having a net negative impact on the environment (environmental CSR).”
Utilitarianism- Whistleblowing
Act utilitarianism holds that whistleblowing is morally right depending on the situation. If whistleblowing causes more happiness than not whistleblowing, then it is morally good; if it causes less happiness then it is morally wrong. For example, if the business is causing a lot of happiness, then whistleblowing about some suffering it is causing, e.g. through exploitation, might be wrong.
Kantian ethics- Whistleblowing
Kant thinks lying cannot be universalised and is therefore always wrong. So, he would certainly also be against lying to cover up negative business practises, even if that truth being brought to light resulted in the failure of the businesses and employees who may have done nothing wrong nonetheless losing their jobs. It is your duty never to lie.
Kant would also regard the treatment of people as mere means to be wrong due to the second formulation of the categorical imperative. Most if not all cases of whistleblowing seem to involve exploitative or deceptive business practices that treat people as a mere means. This would be another reason that Kant would be in favour of whistleblowing.
Utilitarianism- Globalisation
Utilitarianism would be against the aspects of globalisation which undermine free markets, such as the power it has given business over policy making.
However, Utilitarians might accept off-shore outsourcing so long as happiness is maximised.
Kantian ethics - Globalisation
Globalisation seems problematic for Kant in that it can cause all of the corporate social responsibilities to be violated.
