Business ethics Flashcards
Business ethics - Corporate social responsibility
A sense that businesses have wider responsibilities than simply to their shareholders, including the communities they live and work in and to the environment.
>Milton Friedman - only responsibility of a business is to make money for its shareholders
>Also has responsibilities towards the community it operates in - reducing negative effects on the environment
>Risk damage to reputation if they do things that have a negative effect on stakeholders
>Interests of shareholders and stakeholders conflict
>Businesses try to enhance reputation in the community in a public way
Business ethics - Corporate social responsibility - Kantian ethics
> An action is only good if done out of good will
Businesses who do good things for their own reputation are not ethical
A business should act ethically because it is the right thing to do
Business ethics - Corporate social responsibility - Utilitarianism
> Need to weigh up the potential pleasure and pain caused by corporate social responsibility
It is in a business’ best interests to act responsibly, as in most cases that would be more likely to produce pleasure and minimise pain
If acting irresponsibly would cause more pleasure then a utilitarian would support that
Business ethics - Whistleblowing
> When an employee discloses wrongdoing to the employer or the public
Reporting something that affects or threatens to affect others.
Often, employees have a legal obligation to report unethical behaviour.
Whistleblowers are protected by the law - not required to provide any evidence for what they are reporting. >Whistleblowing can also be done anonymously
Employees sign a contract with their employer that is the foundation of an ethical business.
Business ethics - Whistleblowing - Kantian ethics
> Issues surrounding whistleblowing could cause difficulties
Duty to tell the truth and be honest and fair
Duty of loyalty and promise keeping
Would have to decide which duties outweighed others which would be difficult
Business ethics - Whistleblowing - Utilitarianism
> Would it maximise pleasure or not?
In the long-term could be a good idea
Could cause job losses and financial losses for shareholders, although there are potential benefits if other businesses learn a lesson from this
Act UT would think of each situation on its own
Rule UT would think about whistleblowing in general
The utilitarian would have to try to think about what the long-term effects might be and who might be affected which would be difficult
Business ethics - ‘Good ethics is good business’
> Doint the right thing will make a business more attractive and increase its profits because customers will like and trust it
Can be interpreted to mean that doing the right thing is as appropriate in business as it is anywhere else
Could also mean that when businesses seem to be acting ethically they are only doing it for profit
Acting ethically can be hard for businesses as something that benefits one group may have the opposite effect on others
Some good ethical practices make it hard for businesses to succeed alongside its competitors
Business ethics - ‘Good ethics is good business’ - Kantian ethics
> Businesses should do the right thing just because it is the right thing
This is difficult for companies if they want to survive on the competitive capitalist market
Not treating people as a means to an end is hard for businesses
Kantain ethics might be attractive for businesses because they are rules that apply universally
Business ethics - ‘Good ethics is good business’ - Utilitarianism
> Crane and Matten (Business Ethics: A European Perspective) there are close links between UT and the approach of economics, decisions are based on whichever outcome is likely to provide the most beneficial results
Greatest happiness for a large group of people might be impossible to judge
Business ethics - Globalisation
> The trend of increasing interaction between people or companies on a worldwide scale due to advances in transportation and communication technology. >Globalisation is a grand historical tend. One major trend part of globalisation is deindustrialisation in the western world.
Companies have much of their operations to China and India because it is cheaper to produce goods there - wages are lower, there are less regulations and control, unions are weaker, there are less workers rights etc. This helps to maximise profits but is a problem for business ethics
Business ethics - Globalisation: Kantian ethics
> Might help business ethics to adopt some absolute guidelines for ensuring the wellbeing of workers around the world
Norman Bowie suggests rules for businesses that a Kantian might adopt - protecting autonomy and rationality for every worker, providing sufficient salary, operating according to the rules of justice
Might be difficult to apply because businesses have to treat workers partially as a means to an end so there are situations where duties conflict
Business ethics - Globalisation: Utilitarianism
> On a large scale, the good that is done to developing countries from globalisation outweighs the harm
Everyone benefits when goods can be produced cheaply enough for most people to be able to buy them and everyone benefits when people are employed and charged a wage
The rich gain a lot more than the poor through globalisation and although overall happiness may be achieved, the poorest people are being exploited
