Business Ethics Flashcards
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Cicero, NL
‘we do not aim to be rich for our sakes, but for the sakes of our children’
3 principles on business from summa theologica
- natural exchange over wealth-making
- no price discrimination
- immoral to charge something for more than its worth
Encyclica …. and its 3 principles on business
Encyclica Rerum Novarum;
- recognised needs of workers
- argued for trade unions
- protection of the needs of poor countries
Protestantism
concern about competitive industrialisation of capitalism, and its subsequent social inequality
catholic church
against free market and capitalism because it acts against the poor and for selfish wealth
Singer’s triple bottom line
people, planet, profit
- wealthy have a duty to the poor
- business has a secondary duty to environment
- profit should have an economic benefit to wider society
Externalities
costs or benefits external to the company, pollution is a negative externality
Stakeholders
any parties affected by a business practice
- internal stakeholders are managers and employees
- external (local community, customers, shareholders, government etc)
What does the economist Milton Friedman argue?
companies have a duty only to their shareholders (profits), its for society to set other ethical rules
case studies for when companies pursue least cost-choices to boost profit to bad effect
- thousands died due to mustard gas at Union Carbide (US firm) plant in Bhopal (1986, India)
- thousands got sick in 2008 Trafigura oil waste disposal on the Ivory Coast due to hydrogen sulphide
what is the central issue of Globalisation according to which economist?
Amartya Sen: ‘the unequal sharing in the benefits of globalisation’
Quote by Milton Friedman on company responsibility
‘Corporate executives do not have responsibilities in their business activities, other than to make as much money as possible for their shareholders’
Robert Solomon quote
‘serving the public and taking care of one’s own employees are not an afterthought of business, but rather its very essence’
Rerum Novarum 1891
‘the following duties bind the employer: not to look upon their work people as their slaves, but to respect in every man his dignity as a person ennobled by Christian character’
Cardinal Vincent Nichols
‘it matters that the prevailing ethos of a company brings together corporate purpose and personal values’
Michael Wilkinson and Michael Wilcockson
‘it is hard to separate businesses being ethical for its own sake with the fact that being ethical might be good for business’
Pope Francis
‘the natural environment is a collective good and the responsibility of everyone’
Aquinas, ST
‘man should not consider his material possessions as his own, but as common to all, so as to share them without hesitation when others are in need’
Quote Michael Sandel on the ‘moral limits of markets’
‘the question of markets is really a question about how we want to live together. Do we want a society where everything is up for sale? Or are there certain moral and civic goods that markets do not honor and money cannot buy?
Vivek Wadhwa Quote
‘Ethics need to be carefully sown into the fabric of companies’
What has the market philosophy created?
‘a consumerist idea of freedom’
What concepts do Kant say are logically incoherent?
- a lying promise
- stealing
What do Hegel and Bradley reply to Kant’s saying stealing is incoherent?
there is nothing self-contradictory about the world without private property so stealing isn’t a logically incoherent concept
Who defends Kant’s idea that stealing is wrong?
Christine Korsgaard says Kant is just saying IF private property exists than stealing would be a non-universalizable maxim
What principles should businesses follow according to Kant?
- do not coerce or deceive
- contribute to the development of human rationality and morality
- Reduce an information asymmetry
- companies should provide ‘meaningful work’
- Profits should be consequences, rather than a goal
What does Jack Stack’s ‘Open book management’ theory say?
the information received by employees should not only help them do their jobs effectively, but help them understand how the company is doing as a whole
What is meaningful work?
- work is freely chosen, allows worker autonomy
- sufficient salary
- does not interfere with moral development
Rawls’ theory of justice
in order justice to be truly just, everyone must be afforded the same rights under the law.
Kant main response RECAP:
- rejects idea that a business’ main responsibility was to its shareholders as this treats humans merely as a means to an end. You need to consider all stakeholders.
- consequences are irrelevant, whistleblower: If someone is acting unethically, you have a duty to expose them.
In Aristotle talks about 2 types of business…
- Oikonomikos or household trading - e.g. where a farmer trade crops for clothes clothes. An essential part of a eudaimonic society. Specialise, and then exchange what you produce for other goods or services.
- Chrematisike or trade for profit - Aristotle saw this as ‘wholly devoid of virtue’. Trade, if done purely for profit, does not involve acquiring any true wealth. Aristotle attacks the profit-driven approach to business.
In what ways has Business Ethics moved towards an Aristotelian approach?
- Lists of rules have been replaced with company values
- businesses can’t be separated from society, everyone is part of the larger community, the ‘polis’
- Offices have become communities, increased focus on building up relationships among staff
- ‘mission statements’ which summarise the business’ telos
- more focus on eudaemonia for the community which VT says is even more important than for the individual
What does MacIntyre argue?
The profit motive means that modern businesses and corporations are incompatible with virtue
What does Solomon argue?
there is a distinction between excellence and virtue. Non-moral virtues make you skilled at something, and business is the practice of non-moral virtues which are competitive and self-serving.
What does Globalisation mean for VE in businesses?
the nature of the ‘polis’ has altered as corporations have global responsibilities
Natural Law on Business Ethics
- primary precept is to live in an ordered society so businesses need to be regulated to prevent them mistreating workers.
- Primary Precept is education, so Natural Law would be against child labour - it prevents a child fulfilling his God-given purpose.
- Natural Law provides absolute, deontological secondary precepts against all forms of exploitation and human rights abuse.
Utilitarian response
- Utilitarians would have high expectations of businesses.
- Utilitarianism will protect workers rights, ensuring fair pay, safe working conditions, sociable hours etc.
- Bribes: An Act Utilitarian would agree to bribes, but a Rule Utilitarian may say that taking bribes generally leads to bad decisions being made, with negative consequences.
Situationist response
- Businesses which put people before rules (Personalism), may be acting ethically according to Situation Ethics.
- its approach to business ethics is flexible.
- Love is the only norm, so a situationist would reject rules like ‘Never spy on other companies’; ‘Don’t take bribes’ etc.
- Many people see business as a ‘survival of the fittest’ arena, and would agree with a situationist approach - whatever works.
