RS a level ETHICS - business ethics

ao1 and ao2

which 2 normative ethical theories are applied to business ethics

Kantian ethics, utilitarianism

4 key (spec) ideas on business ethics

corporate social responsibility

whistle-blowing

good ethics is good business

globalisation

what is corporate social responsibility

the theory that businesses have a responsibility not just to make profit for their shareholders but also to protect their stakeholders

two types of corporate social responsibility

environmental, community

Kantian opinion on corporate social responsibility

all violations of it treat people as mere means and are therefore wrong

Utilitarian opinion on corporate social responsibility

environmental is consistently important, but social is situational depending on how pleasure can be maximised for the greatest number

what is globalisation

the phenomenon where world economies, industries, markets, cultures and policy-making/politics are connected

example of an issue of globalisation

when a business uses off-shore outsourcing: shutting factories in first world countries which decreases jobs and opening factories in third world countries which contributes to exploitation

what does globalisation lead to

monopolies, which destroy free market capitalism

utilitarian opinion on globalisation

would generally disapprove of the monopoly caused by globalisation, although this is situational

may support the expansion of business to third world countries

Kantian opinion on globalisation

disapproves of the ways it allows people to be treated as means and how monopoly destroys competition

what is whistleblowing

the act of going public with information about unethical business practices, done by employees of the business itself

what is the downside of whistleblowing

business may go bankrupt and employees lose their jobs

is whistleblowing legally protected in the UK

yes

Utilitarian opinion on whistleblowing

situational depending on whether whistleblowing maximises pleasure and minimises pain

Kantian opinion on whistleblowing

lying is always wrong because of the principle of universalisation so people should tell the truth about unethical practices

practices that treat people as means should be shut down

what does the idea that good ethics is good business suggest

good business decisions are equivalent to good ethical decisions

how does McAskill suggest a utilitarian may defends sweatshops

points out the people who work in them are better off working there than starving without

“all you are doing is taking away the best working opportunity that these people in very poor countries have”

why does Chomsky suggest business’ power should be limited

overly-powerful businesses will trample human rights at the first opportunity

summarise Adam Smith’s capitalism

called the ‘father of Capitalism', suggesting economies grow best through free markets

the capitalist system works so well it’s as though it’s guided by an ‘invisible hand’

summarise Milton Friedman’s capitalism

no moral responsibility when it comes to the management of private property - one way of arguing that good business is good ethics

his ‘shareholder theory’ claims the only ethical responsibility of a business is to increase profits; rejects CSR

what is hypocritical window-dressing

fulfilling CSR but ultimately only at surface level

e.g. a business that donates a percentage of profits to charity while carrying out unethical practices

Marx’s view on capitalism

it is inherently exploitative

Giridharadas’ article on the hypocrisy of CSR

‘Jeff Bezos wants to start a school for kids whose families are underpaid by people like Jeff Bezos.’

subtitle: ‘a free crash course in why generosity is no substitute for justice’

what is extrinsic ethics

the idea that a company is only ethical so the public buys their products

2 quotes from Friedman rejecting CSR

“only one social responsibility of business… to increase its profits”

“what does it mean to say that businesses have responsibilities? only people can have responsibilities”

3 perspectives valuing CSR

a pragmatic approach that ‘good business is good ethics’ - Adam Smith, essentially a utilitarian

Kantian sense of duty

religious sense of responsibility

an example of the correlation between good ethics and good business

while overcharging customers may increase profits at first, it will in the long term make less money overall and damage a business’ reputation

does Kant suggest good ethics is good business

no, he suggests good ethics matters more

statistic showing the cost of whistleblowing

2015 ‘Freedom to Speak Out’ report from the NHS found 30% of whistle-blowers felt unsafe and some had contemplated suicide

2 types of whistleblowing

private, public

Sports direct as a case study of whistleblowing

in 2016 a committee of MP’s published a report criticizing SD for treating workers ‘like commodities’ following an undercover investigation prompted by whistle-blowers

Giridharada quote on CSR and window-dressing

“We don’t need you to do more good. We need you to do less harm”

‘The Facebook Files’ case study of whistleblowing

employee Frances Haugen leaked the internal documents

one file acknowledged that “we make body issues worse for one in three teenage girls”

another file recognised the algorithm promoted posts that caused anger or outrage

Norma Bowie

whistleblowing violates a “prima facie duty of loyalty to one’s employer”

how is the principle of utility helpful in BE

it’s a quantifiable measure, with hedons and dolors, usable in a cost-benefit analysis

Bangladesh factory case study for unethical globalisation

evacuated for health and safety concerns

workers instructed to come back the next day or lose a month of pay

the next day, the factory collapsed killing over 1,000 employees

statistic showing utilitarian strength of gloablisation

those in absolute poverty dropped from 70% to 12% from the 60s until 2012, significantly thanks to globalisation

Ford Pinto case (1970)

serious design flaw discovered where if the car was collided at the rear end at over 20mph it would cause an explosion

would cost $11 per car to fix

releasing the cars would cost them $49.5 million in compensations, while fixing the cars would cost $137.5 million

they released the cars and up to 900 people died

evidence that good ethics is becoming increasingly synonymous with good business

the rise in popularity of ethical (socially responsible) investment funds