Business Ethics Flashcards
principle of utility, 1
• It could be argued Utilitarianism offers an effective approach to business ethics as a result of the looking to maximise pleasure and minimise pain for the greatest number – this in turn enables the practise of CSR, as the people managing the business will have a duty to consider the interests of all stakeholders, including employees, customers, shareholders and the environment
kant means to end response to principle of utility
- Yet as with all teleological normative theories, the principle of utility may undermine rights of individual workers, especially in the case of Act Utilitarianism, which is quantitative not qualitative
- The greater good may be considered as cheap products for thousands of customers, therefore justifying the exploitation of poorly paid child-labourers in sweatshops, as is the case for Nike factory workers. Kant’s is more effective, due to idea of not treating individuals as means to an end.
hedonic calculus criticism of kant
• Although the principle of utility may enable people to favour the happiness of some over the pain of others, the hedonic calculus, when used correctly, will weigh up the intensity and duration of the pain/pleasure over one another, to ensure ethical practise. Ford Pinto (fuel tanks leading to fires if rear-ended; cost/benefit analysis determined it cheaper to ignore it) may have appeared to use the hedonic calculus to do a cost/ benefit analysis, but Bentham would argue the impacts of people dying through fires caused in cars would have long lasting and intense impacts, far greater than the profits made.
kingdom of ends better than hedonic calculus
• It would be arguably impossible to calculate the accurate impacts of business decisions in the globalised world, using the hedonic calculus, as decisions impact a number of people across the world and cannot always be predicted Thus a deontological approach, ensuring businesses act as legislating members in a kingdom of ends, universalising their maxims to judge whether their decisions contradict the will, ensures ethical practise from the offset.
teleological approach better, 2
• Arguably a teleological approach is more practical for business ethics, as a business must be able to develop profits, which in turn will allow for ethical treatment and sourcing/ benefit of society
duty, good will and intentions criticism of teleological approach
- Yet if ethical treatment comes after profits have been generated, this suggests the company is acting out of baser motives and not “duty for duty’s sake”
- In the case of whistleblowing, a utilitarian may discourage an employee from speaking out against unethical employers for the sake of allowing the company to continue making profits. This, in turn, goes against both Kant and Mill’s ideas of individual liberty and autonomy, as workers may be coerced into staying quiet
- Yet still, utilitarianism focuses on the overall good (of people and not just profits), thus if blowing the whistle brings about a greater good over pain, then it could be permitting e.g. Samuel Provance, an army intelligence soldier, blew the whistle on a cover-up involving abuses at Abu Ghraib – he was demoted and discharged in 2006 the intensity of the suffering inflicted in Abu Ghraib made it the right choice to blow the whistle, even if this impacted negatively on the profits of the business.
friedman criticism of will
- Nonetheless, it could be said that in order for businesses to flourish and make a profit, one has to judge based on consequences and not duty or responsibility
- Milton Friedman, in ‘The Social Responsibility of Business is to Increase Profits’ has challenged the idea of corporate social responsibility, arguing that the only aim of a business is “to use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game”
solomon ethical practice
- Yet a Kantian approach, a following duty of ethical treatment will in fact increase a businesses profits!
- Crane and Matten, in ‘Business Ethics’ argue that it is in a businesses interest, as well as the interest of stakeholders, to develop good business ethics
- For example, the treatment of workers in Primark factories is awful and the company has developed a bad name for themselves
- Solomon: no contradiction between existing good values in business behavior & success- “profits will come as a consequence” of good business / “an ethical business is more likely to prosper”
utilitarianism open to exploitation, kingdom of ends better, 3
• Overall it seems Utilitarianism’s holistic approach leaves too much room for exploitation. By applying a deontological approach it prevents companies from justifying exploitation or dishonesty, as one is forced to imagine maxims as laws of nature.
smith argument on business ethics
- Nonetheless some may argue that such a rigid deontological approach to business ethics prevents businesses from having sovereignty. Indeed classical Utilitarians such as Mill and Bentham were committed to free market economics with minimal state intervention.
- Adam Smith, in ‘The Wealth of Nations’ speaks of the “invisible hand” of the free-market system; we don’t need rigid deontological theories as humans have an innate compassion and sense of respect for others, which would enable a naturally humane capitalist economy.
categorical imperative defence against smith
- Although we may like to think businesses would naturally avoid exploitation it is evident this is not the case. In today’s capitalist society we must use Kant’s categorical imperative to ensure business is regulated.
- Development of human rational capacities and dignity through making decisions in accordance to the Categorical Imperative, which ensures just treatment of all. Companies must see themselves as part of a wider community and thus work towards a common good where everyone can flourish.
- Acting socially responsibly may prevent government legislation, which forces businesses into contracts which prohibit their sovereignty overall good ethics helps the business and the people it affects
lousy job better than no job
- Better than nothing defence – even if we treat employees poorly, they are still being given employment
- National Centre for Policy Analysis suggests “Better a lousy job than no job at all”
nicholas business ethics
• Nicholas reinforces this idea “each person can never be merely an instrument valued just for their usefulness”
eamon smith criticism of kant/nicholas
- Businesses can be respectful towards employees once they have made profits – not the first priority
- Eamon Smith – believes businesses do recognise the responsibility they have within the wider public but ultimately they are concerned with business alone
- Legality defence- complying with rules is all that is needed?
utilitarianism’s concern with business ethics
- Peter Singer’s preference utilitarianism highlights the importance of also looking after animals and the environment
- Bentham was concerned with rights for the working class – introduced many reforms which improved working conditions.
