Business Ethics

“oblige corporations to do what is right, just and fair even when they are not compelled to do so by the legal framework”

Crane & Matten - oblige

“Prima facie duty of loyalty to one’s employer”

Norman Bowie

Globalisation has reduced number of extreme poor since 1990

• India: by 200 million

• China: by 300 million

Jeffrey Sachs

“good ethics is good business”

Adam Smith

“Are you the cheap one, the one with good service, the ethical or bespoken one? What’s your hook?

Lord Sugar’s Rules

“ultimately utilitarianism then comes close to what we know as cost-benefit analysis”

Crane & Matten - cost-benefit

“hypocritical window dressing”

Friedman - window

“the social responsibility of business is to increase its profits”

Friedman - responsibility

“an infectious greed seemed to grip much of our business community”

Alan Greenspan

• Aware of high risk design

• Re-design costs significantly more than paying out for damages

• Ford released the Pinto without a re-design

Ford Pinto: Corporate Social Responsibility

• Kantian approach

• Loss of profit from actively choosing buyers and partners

• Not exploiting partners

Ben & Jerry’s: Corporate Social Responsibility

• Over 1100 people died in the building, more than 2500 were injured

• Shop closed after cracks appeared in the building, but the garment workers were ordered to return to work

Rana Plaza: Globalisation

• Raised concern regarding patient treatment or his hospital with the care quality commission, but no action was taken

• Bryan then turned to BBC panorama, who created a documentary programme bringing awareness

• Led to care workers given prison sentences, and NHS England taking action to develop care

Nurse Terry Bryan: Whistleblowing

• Refuses to test on animals and supports campaign like the Climate Defence Project

• Tries to use only natural ingredients and has ensured that it does not use ingredients and has ensured that it does not use ingredients linked to human rights abuses

• Considers the environment through methods like reduced packaging

Lush: Good ethics is good buisness

Leads to different results

• Greatest good of shareholders - produce profit e.g. Friedman

• Greatest good for stakeholders - how can you balance all of this at once? Is it possible?

• Does the greatest good constantly changes? - Can we form a rule which would be beneficially applied to business ethics in regards to maximising pleasure and minimising pain?

Debatable on CSR

• Weight balance of good/harm for all those with interest or stake in the business and whether this is worth being put at risk - this is difficult to predict

• Act may argue that sometimes a company can justify in breaking rules to create greater happiness and so there should not be whistleblowing

• Rule may suggest companies should always follow an ethical code of whistleblowing, even if in a particular instance it creates more happiness not to whistle blow

Debatable on Whistleblowing

• “Greatest good” can be understood in global terms and globalisation has helped many people

• Most countries engage in worldwide trade which shows it must be beneficial to the majority

• But does it actually lead to the greatest good or only deepen global inequalities?

Debatable on good ethics is good business (Globalisation)

• May be too hard to apply in dynamic, fast-paced business environments, e.g. the Hedonic Calculus is difficult to apply

• There is difficulty in quantifying cost and benefit between stakeholders and shareholders

• Act and rule would be different! Act would take each situation in isolation whereas rule would establish general rule which enable business to be good, such as ‘good ethics is good business’

Debatable on Good Ethics is Good Business

• Treat people as ends, never as a means

• Focus on autonomy and rationality

• Need to balance interest of the company and the individual e.g. lying to customers about the benefit of a product so they buy it; not paying employees a fair wage to produce cheaper products - the company needs to act morally

Supports CSR (Cooperate Social Responsibility)

• Categorical imperative emphasises importance of truth and promise keeping

• We must follow our contract and keep the promises we have made to business employees etc - whistleblowing usually breaks this. However the company have also made promises to treat employees specific ways, so if they break this promise, whistleblowing could be ethical

• Treating people as ends is important - if a company is not doing this there may be a greater sense of duty and so it might be that promise that needs to be broken

Debatable on Whistleblowing

• Often lead to actions which go against the categorical imperative - cannot be universalised, do not treat people as ends in themselves and would not be accepted in a Kingdom of Ends

• Need autonomy to be moral but many are unable to be free due to globalisation, e.g. accepting a job in a bad factory as you will earn money

• Business should be done for the good of others/out of duty, not with the sole intention of profit

Supports good ethics is good business (Globalisation)

• The same principles should apply in every situation - good ethics as good business is a good rule

• Business is generally motivated by self-interest: Kant encourages good ethics, which treat others as an end and can be universalised

• Is it possible in business to treat everyone as an end? Can stakeholders and shareholders both be treated well by every decision? This seems unrealistic and too ideal

Supports Good Ethics is Good Business

Capitalism

an economic system based on the private ownership of how things are made and sold, in which businesses completely freely with each other to make profits

Shareholder

a person who has invented money in a business in return for a share of the profits

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

Whistle-blowing

when an employee discloses wrongdoing to the employer or the public

Globalisation

the integration of economies, industries, markets, cultures and policymaking around the world

Stakeholder

a person who is affected by or involved in some form of relationship with a buisness

Consumerism

a set of social beliefs that put a high value on acquiring material things