business ethics

what is CSR

• corporate social responsibility

• business isn’t just about making profit but also about making sure it’s ethical for all stakeholders

• businesses have an obligation (beyond law) to pursue goals that are good for society

name 5 requirements for CSR

1. acting in interests of wider community (e.g. sustainability)

2. respond to societal changes and expectations positively

3. do the right thing instead of waiting for the law to tell you to do that

4. balance shareholder interests with community interests

5. be a good citizen (e.g. donate)

what are the main parts of CSR (LEEV)

legal: responsibility to comply to law

economic: responsibility to earn profit for shareholders

ethical: responsibility to do what is right

voluntary: work to help community’s quality of life

what do businesses often have?

mission statements/code of practice to talk about their ethical values

what is a social audit?

• highlights progress or lack of that a business is doing to act responsibly to all stakeholders

• allows stakeholders to feel like they are being cared for by compant

• encourages business to be more ethical

name 3 ethical acts a business could do that is beyond obeying the law

1. donate to charity

2. invest in wellbeing activities for staff

3. recycle more

what are the 3 main values of CST (catholic social teaching)

1. human dignity

2. common good

3. solidarity

what does CST say about human dignity in response to CSR

we should be treated as humans since life is sacred

e.g. good pay

→ link to sanctity of life

→ link to kant and treating people as ends

what does CST say about common good in response to CSR

business should work towards the common good for everyone

needs to consider impact on the economy, environment, etc

what does CST say about solidarity in response to CSR

being in touch with the needs of the community

looking for ways to help the underprivileged

what does aristotle say about CSR?

acting for the good of yourself but the good of the community is better

why is it a smart business choice to be ethical?

most people won’t buy from unethical businesses
→ e.g. deforestation or child exploitation is used

people prefer to buy from ones that are ethically good and are willing to pay more for that
→ e.g. body shop or lush (no animal testing)

what is a co-operative?

• group of people working together to achieve a common goal
  → ownership is shared

• rather than employee, you’re a member. all have an equal say in what the business does

• based in values of: self help, democracy, equality, social responsibility

• have credit unions
  → loan people money with little interest so they don’t struggle in poverty

explain body shop as an example of good ethics=good business

• body shop was made to reject animal testing and use vegetarian and cruelty-free ingredients (revolutionary at the time)

• launched trade community in 80s which bought from disadvantaged communities and paid fair wages to help development

• used their platform for social campaigns like:

  • ending animal testing

  • defending human rights

  • promoting sustainability

• body shop is more expensive than other beauty shops due to sustainability
  → but it does well since it is so ethical

• it also builds more trust with customers so they are more likely to return

what is an issue with good ethics=good business (e.g. body shop)

it is more expensive

unethical ones like primark still thrive due to cheap prices from using workshops with bad conditions

what does friedman think about CSR?

• friedman- american economist

• thought suggesting business should have responsibilities is a mistake and leads to socialism

• a business isn’t a person so doesn’t have responsibilities
  → if a boss or employee wants to donate to charity, that’s fine but the company shouldn’t have to lose money to do it

• it’s wrong to suggest making money is immoral

• CSR is stealing from the company by forcing it to give money to charity

what 2 things does utilitarianism think about CSR being:
1. actually good
2. just window dressing for profit

1. supports that business helps community and environment. if a business acts in a way that benefits majority of stakeholders, then its good as it helps the most amount of people
   

2. as long as business secures happiness then it doesn’t matter what the intentions are. if it’s just window-dressing for profit, but we also weigh up how different stakeholders benefit, it’s still good.

what 2 things does kant think about CSR being:
1. actually good
2. just window dressing for profit

1. example of the shopkeeper
   we should do duty because it is the right thing to do, not for profit or benefit/rewards. we should do CSR as it is our duty
   

2. doing CSR for profit and benefit financially is immoral. we have a duty to help the community and we should be doing it as a duty. any other reason is wrong

what is whistleblowing?

• going public, to higher ups or to police with information about shady/unethical practices

• good because it means unethical practices are likely to stop

• bad because business may go bankrupt and employees may lose their job.

• also bad as while person who reported has legal protections, it can still lead to them being fired, losing friendships or poor treatments

name 3 things whistleblowing may draw attention to

1. tax avoidance

2. environmental issues

3. discrimination or bias

give an example of whistleblowing

frances haugen- facebook
came out in 2021 with documents revealing:

• facebook was aware insta damaged teen mental health

• they prioritised profit over user safety

• failed to combat misinformation, hate speech and extremism

• gave VIPs and politicians looser rules than normal people

→ this led to investigations in social media harm and called for accountability from facebook
it also led to internal reforms to increase safety on app

utilitarianism: do we have a duty to business or wider community? (whistleblowing)

1. we have to observe if the greater good is served by allowing this corruption. usually (facebook case) whistleblowing allows for the greater good. but in cases where business may go bankrupt and people could lose their jobs then it’s bad
   

2. sometimes whistleblowing is hard if we like the the wrongdoer
   it may also be done to someone we don’t like and want to get their comeuppance.
   hedonic calculus could be helpful here as it helps weigh up the amount of pleasure. if the pleasure and happiness was higher, whistleblowing is the best option

kant: do we have a duty to business or wider community? (whistleblowing)

1. we must do our duty and being loyal is part of that. we have to evaluate though if we are willing to cover up corruption as that can’t be universalised

   → leads to an issue of clashing duties (sartre)
   

2. categorical imperatives go above and beyond any obligations you have to your employer. if something isn’t universalisable or doesn’t treat people as ends, it is important to whistle blow

apply utilitarianism to business ethics

• a lot of businesses use utilitarianism through cost-benefit analysis

• they look at financial, human and environmental costs of an action and the benefits → leads to decisions being made accordingly

• act utilitarianism leads to danger of it focusing too much on pain and pleasure rather than people’s rights

• rule utilitarianism focuses on higher and lower pleasures so happiness is a lot broader

• this allows some flexibility but can lead to issues as they might not know their values if using act utilitarianism

name 4 strengths of utilitarianism in business

1. a consequence based theory is good for business as it focuses on achieving the best outcomes
   

2. act util gives flexibility for each unique situation the business could face. they will all be unique and so have a rule based theory might not be helpful
   

3. rule util focuses on pain and pleasure
   → advertisers focus on appealing to our desires and playing on our fears when selling us products → showing us mill isn’t wrong about out motives
   

4. makes business owners look at issues objectively through the competent judge

name 3 issues with utilitarianism in business

1. act utilitarianism is very time-consuming in the fast pace business world. if we consider every single possible consequence we will be there for a long time and then miss out on these opportunities. may also calculate wrong
   

2. it’s not clear that being impartial like utilitarianism suggests is achievable. experience of pleasure and pain is too subjective and everyone will view it differently. business owners are likely to make decisions that benefit them due to cognitive dissonance
   

3. too difficult to compare goods that may or may not be achieved in any decision. an environmental benefit, wage rise, improvement in working conditions all have to be measured in completely different ways so we can’t compare which is better

apply kant to business ethics

• we owe certain things to people we come into contact with since we are moral agents

• moral duty is found out by finding the categorical imperatives based on what can be universalised and what treats people well

• duty> profit

• treating all stakeholders as ends is very important
  → if a business used child labourers, they aren’t using the children as ends since rights (like education) are being violated

• both employee and employer have duties they should follow:

  • employer: fair wage

  • employee: not taking excessive breaks

• shopkeeper example

what does rawls say (in agreement with kant)

• justice and fairness needs to be understood as equality of opportunities

• before we are born, we are behind a veil or ignorance

• we don’t know our gender, race, ability, class, etc

• we should agree to these terms so no matter what, we would all have a good life:

  • everyone has equal access to basic human rights

  • social and economic inequalities to be arranged to benefit disadvantaged and give them equal opportunities
    → e.g. tax poor less and make wealthy pay more in tax

name 3 strengths of using kant in business ethics

1. universal law requires we are consistent in our decision making. it enables us to build trust so people know what to expect and that they will be treated fairly
   

2. makes sure everyone is deal with as an ends regardless of who it is (shareholder, employee, customer). ensures nobody is treated just as a number and a way to gain profit
   

3. motives ensure that CSR isn’t done just to get customers and is actually genuine- done out of duty

name 3 limitations of applying kant to business ethics

1. unrealistic to think a business shouldn’t consider profit when making ethical decisions. profit is needed to survive more than any ethical concern and people will put that first
   

2. it is impossible to know what the motive behind an ethical action is. shopkeeper example, both look exactly the same from the outside so you can’t ever know
   

3. numerous stakeholders in a business so there will inevitably be times where duties clash and we can’t satisfy everyone and some people will have to be treated as means to an end

what is globalisation (simple)

world economies, industries, markets, cultures and politics being connected

technological globalisation

political globalisation

what is technological globalisation?

communication and travel makes it easier for businesses to trade further in world

can be done in a few days due to fast movement of goods and it being paid for online in seconds

what is political globalisation

impossible for countries to be sufficient as different countries provide diff goods to diff places

means economy issues in one country leads to economy issues in another country

what is an MNC?

MNC= multi-national corporation

MNC operate across lots of diff countries

they often make more money than a small countries entire economy

2/3 of world’s trade is carried out by MNCs

by working in less developed countries, they can take advantage of relaxed labour laws

what are 3 issues with MNCs

1. culture issues

2. legal issues

3. accountability issues

explain culture issues and mncs

• european cultures view child labour as unethical whereas some asian countries don’t
  → gives mcns the ability to take advantage of this
  

• also contributes to loss of culture as same shops are everywhere regardless of the country you’re in

explain legal issues and mncs

• laws are geographically limited

• uk laws only apply in uk

• working globally means MNCs can exploit this and do something illegal legally
  → e.g. minimum wage doesn’t exist in bangladesh

explain accountability issues and mncs

• company based in one country is accountable to the laws of that country

• mncs are harder to hold accountable

• some are so powerful there is no way to hold anyone accountable outside the company itself

name 2 reasons globalisation is ethical

1. reduced amount of people who are extremely poor in india by 200 million and 300 million in china since 90s
   → utilitarian would say that it clearly benefits people
   

2. technological advancements (like social media) make whistleblowing a lot easier so it is harder for unethical practices to be hidden.
   → kant would say its unethical still if the only reason you act well is not to get a bad rep

name 3 reasons globalisation is unethical

1. kant- people aren’t being teated as ends. this is shown when usa workers lose jobs to people across the world when company becomes an mnc, it also takes advantage of global workers
   

2. wages, workers rights and environmental standards are extremely low. keeping costs down makes conditions very bad. globalisation helps people be exploited
   → 1000 people killed in garment factory when it collapsed due to employers ignoring working conditions
   

3. neo-colonialism results. standards and values of developed western world are forced onto indigenous cultures and can destroy existing cultures. this creates tension and resentment

explain capitalism

• private ownership of business

• de-regulation of business

• freedom of choice

• lower taxes- reduced public services

• law of supply and demand

explain socialism

• public ownership of business

• regulation of business

• some choice restricted

• higher taxes- more public services

what does smith say about capitalism?

in favour

people make moral decisions based on self-interest
→ known as ethical egoism
→ this generally benefits all people

what does smith say about law of supply and demand?

• amount of goods available determines how much a business can charge

• the number of workers trained for a job determines how much that job is worth
  

explain efficiency and capitalism

• businesses need to pay attention to how efficiently they can produce things

• division of labour makes production more efficient

• the conveyer-belt method makes better production as it divides it into stages and one person does the same task even if it’s boring.

name 2 reasons we can flourish under capitalism

1. societies who have embraced capitalism have tended to grow more and people in those countries are richer (on average)
   

2. parable of the talents
   jesus praised the one who makes the most money
   master gave servants different amounts of money talents). 2 invest and double it while the other hides his out of fear.
   the ones who made money are rewarded

name 3 reasons we cannot flourish with capitalism

1. captialism is based on competition so there will always be winners and losers. it can bring out the worst in people and so many only operate out of self interest. this leaves people struggling in poverty
   

2. marx- criticised factory owners who oppressed their workers and paid poor wages but made lots of money. this wouldn’t allow us to flourishl. marx would be against how modern companies pay millions to CEOs but give minimum wage to workers
   

3. kant- using the word consumer implies a means-to-an-end relationship. kant believes humans are rational, autonomous and have dignity→ more than just consumers it takes away from sanctity of life
   → we have higher purposes.

explain good ethics=good business

• relationships in business are symbiotic (interact to benefit each other):

  • consumers: business treats consumer well so they are more likely to return

  • employee: business treats employee well so they will be more loyal and hard working

• sensible business owners will do the right thing as that is beneficial in the long run (especially with social media)

• e.g. france telecom suicides

explain france telecom suicides

• high number of worker suicides in france telecom

• many workers left suicide notes blaming the unbearable conditions and management pressure

• CEO was linked to suicides and there was scandals

• this promoted debate about workplace mental health, CSR and holding companies responsible.

name 2 reasons good business = good ethics

1. consequences of bad ethical decisions are often very bog. reputations can be ruined in seconds and can take years to recover
   → france telecom suicides
   

2. it doesn’t matter if CSR is genuine or not
   smith: businesses have a symbiotic relationship and if that leads us to treating people well then that is good
   businesses are built on reputation so ethical approaches will pay off even if motives are questionable
   util- whatever maximises profit
   

name 2 reasons why it’s wrong that good business=good ethics

1. friedman- any link between business and ethics should be rejected. there are more occasions when being ethical can increase profit but it could also cause losses. business should prioritise making money
   

2. kant- shopkeeper example → motive is more important. we should be doing our duty.

utilitarianism: should the only concern of a business be profit?

1. can be used in any business decision that wants to maximise positive effects and minimise negative ones. if the outcome leads to greatest good for most amount of people, then the end justified the means
   → business should behave ethically and can use hedonic calculus
   → takes too long though in faced paced business world
   

2. mill’s rule util has principles to inform morality of actions: harm, honesty, justice, safety and rights.
   these should be acknowledged when making decisions. some businesses abandon these and abuse util to suit their needs
   ‘anything goes’ shouldn’t apply to business

kant: should the only concern of a business be profit?

1. sustainability. moral duty is caring for others in the world: past present and future. if ethics is for all people, unborn generations need to be considered
   

2. categorical imperatives highlight humans are the pinnacle of creation. this involved treating stakeholders well. nobody should be exploited or mistreated

what does utilitarianism think about globalisation?

if a business uses utilitarianism it can defend globalisation
‘greatest good for greatest number”

might say it offsets suffering of workers and stakeholders as it brings lots of people away from being extremely poor (india and china)

while it may hurt culture, it also might give people more money which is better

however, should not be abused

what does kant think about globalisation?

• exploitation of natural resources and labour is morally questionable.we need to treat workers and future generations as ends
  

• exploiting people and nations can’t be universalised to have everyone be exploited → so it can’t be good.

• it shows no good will, isn’t dutiful and doesn’t reveal care for others