Business Ethics

What is CSR?

Corporate Social Responsibility (CSR) is the idea that businesses have a responsibility not just to make profit for shareholders, but also to consider the interests of all stakeholders: employees, customers, and the wider community.

What are the main types of CSR?

• Environmental CSR: Avoid destroying the environment.

• Social CSR: Treat people ethically – e.g., fair wages, health & safety, avoid exploitation (e.g., sweatshops).

Utilitarian view on CSR

Utilitarianism: Environmental CSR is valid; social CSR depends on whether it maximises overall happiness. Exploitation could theoretically be justified if happiness increases.

Kantian view on CSR

Kant: Violating CSR treats people as mere means, so it is always morally wrong, regardless of consequences.

Stakeholders

Anyone affected by a business, including employees, customers, suppliers, and the wider community.

Case Study: Sweatshops & CSR

• Sweatshops violate social CSR.

• Utilitarian: Might defend sweatshops if workers are better off than starving (MacAskill), but happiness may be inseparable from exploitation.

• Mill (Rule Utilitarian): If workers autonomously choose, it could be acceptable; children cannot consent, so should be banned.

• Kant: Sweatshops are wrong; exploit workers as mere means.

• Example: Primark cut ties with exploited sweatshops → workers lost jobs, worse off.

What is globalisation in business?

Globalisation connects world economies, industries, markets, cultures, and politics. Businesses operate globally.

Ethical issues arising from globalisation

• Offshore outsourcing: Losing jobs in wealthy countries; exploiting workers in developing countries.

• Corporate influence: Large companies can pressure governments to change laws in their favour.

• Monopolies: Destroy competition, harming free market benefits like innovation and low prices.

Utilitarian view on globalisation

Utilitarian: May approve if overall happiness increases, but generally against exploitation.

Kantian view on globalisation

Kant: Exploitation is always wrong; globalisation should respect human dignity (treat people as ends, not means).

Connection to capitalism

• Both Kant & Mill support capitalism in principle, but restrict unethical practices.

• Adam Smith supported free-market capitalism: competition improves products/services.

• Friedman: profit-maximisation is primary responsibility (shareholder theory).

What is whistleblowing?

Going public with information about unethical or illegal business practices.

Legal protection

• Protected in countries like the UK.

• Employers cannot retaliate or fire employees for whistleblowing.

Utilitarian view on whistleblowing

Utilitarian: Depends on consequences. Whistleblow if the suffering alleviated outweighs harm to business/employees.

Kantian view on whistleblowing

Kant: Always morally right. Unethical practices treat people as mere means, and truth-telling is universalisable.

Case Study: Edward Snowden

• NSA employee revealed illegal surveillance on citizens.

• Utilitarian: Might weigh government harm vs. public good.

• Kant: Morally obliged to disclose the truth.

Connection to globalisation

Sweatshops are a product of globalisation: businesses move production to developing countries to lower costs.

Ethical analysis

• Utilitarianism: Might defend if workers are better off than starving.

• Mill (Rule): Acceptable if workers consent; children should be banned.

• Kant: Always wrong; treats people as mere means.

Example: Primark

Cut ties with sweatshops → workers lost jobs, worse-off. Highlights complexity of moral decisions in business.

What is the calculation problem?

• Consequences of actions are unpredictable.

• Pleasure/pain are subjective and hard to quantify.

• Applies to whistleblowing, CSR, globalisation decisions.

Example: whistleblowing & calculation

• Hard to know in advance if whistleblowing will bankrupt a business or harm employees.

• Consequences are uncertain, making moral judgement difficult.

Kant’s critique

We cannot control consequences, so ethics must be about right action itself, not outcomes.

Mill’s rule utilitarian solution

• Instead of calculating each action, follow society’s moral rules that maximise happiness.

• Example: Harm principle → people free to act as long as they don’t harm others.

• Long-term: society can improve ethical rules over time.

Adam Smith

Father of capitalism; free-market competition → better, cheaper products via self-interest (“invisible hand”).

Milton Friedman

• Shareholder theory: only responsibility of business = maximise profits.

• CSR optional, mainly for PR purposes.

Marxist critique

• Capitalism = inherently exploitative → class division.

• Workers alienated; most value goes to owners.

• CSR & whistleblowing cannot fully fix systemic issues.

Modern critiques

• Anand Giridharadas: “Generosity is no substitute for justice” → CSR can be window dressing.

• Marx’s critique may be outdated: globalisation reduced absolute poverty from 70% → 12% (1960s–2012).

Capitalism & morality: Kant vs Mill

• Both support capitalism but restrict unethical practices.

• Both favour whistleblowing, CSR, and oppose exploitation/globalisation abuses.

• Kant: stricter restrictions (never exploit).

• Mill: allows limited exploitation if workers choose and in short-term; aim for long-term ethical economy.

Evaluation points for exams

• Utilitarianism: Flexible, intuitive, but calculation problem exists.

• Kant: Morally safe (no exploitation), but can be counter-intuitive/extreme.

• Mill Rule Util: Best middle-ground → avoids calculation problem, allows society-wide ethical planning.

• Capitalism: Smith & Friedman = growth, innovation; risk of exploitation & monopoly.

• CSR: Ethical necessity for social/environmental responsibility, varies by theory.