ethics - business ethics

who founded profit nature?

milton friedman

shareholder

owners of a company who profit from its financial success

profit nature

-business should try to make as much money as possible, the pursuit of profit is not immoral

-businesses only requirement is to make profit for shareholders 

-if we want ethics it is up to the government and consumers to enforce ethics (consumers veto the product by not purchasing)

-friedman argues that ethical responsibilities are something only humans can have 

-companies are not people and cannot have responsibilities in the same way

corporate social responsibility

the belief that companies have ethical responsibilities to all stakeholders 

stakeholder

any person or group affected by activities of an organisation

7 principles of corporate social responsibility for ‘good business’

-have catholic origin

human dignity-people should never be treated as a tool to get something

common good-business is for all people so all people should be considered

solidarity-businesses should not behave like they are the only thing

subsidiarity-decisions should be made at lowest level compatible with efficiency

fraternity-treat everyone as our brothers and sisters

reciprocity-good business must give what is due/expected/is a duty

sustainability-we have a duty of care to everyone as well as future generations

whistleblowing

this occurs when a member of an organisation reports misconduct by a superior or co-worker

internal vs external whistleblowing 

internal-within company 

external-to media or governing body 

cost of whistleblowing

-loss of friendship

-poor treatment as a result

-loss of job

-broken sense of trust or loyalty

ford motors 1970s

specific new car model had defect that meant that if the petrol tank cracked, the car would explode. ford rather than recalling the cars, would go through lawsuits as they believed they were cheaper- they werent.

profit nature=because they cared more about keeping the broken cars sold, then recalling them

kantian ethics=would say recalling the cars is the right thing to do because it is our duty to only do actions it is ok for everyone to do all of the time (universalizability)

nestle baby formula scandal 1970s

sold baby food to 3rd world african countries, the baby food needed to be mixed with water. the water that was mixed into the food was not clean which resulted in the death of tens of thousands of babies. 

profit nature=because they argued it was not their fault as the bay food was not toxic and they failed to accurately advertised the baby food

kantian ethics=must treat people as an end in themselves 

globalisation

the idea that the world is becoming smaller

-travelling across the world can be done within days

-you can contact someone around the world instantly

-being able to do business on a global scale; brings new ethical issues

cultural issues

-cultures around the world vary greatly on matters of equality, equity and rights

-european businesses have different attitudes to middle eastern countries e.g., european businesses regard child labour as completely unethical whereas some asian countries may take a very different view

-another cultural concern is that globalisation is contributing to a loss of local identity and culture; every town centre has some shops

legal issues 

-laws are geographically limited, for example uk law applies only to the uk

-in a multinational context, companies are able to exploit this by ensuring that something that would be illegal in one country is done in different countries where it is legal e.g., in the uk, a company is required to pay minimum wage and abide by maximum working hours but these laws do not apply if the work is done in bangladesh 

accountability issues

positives of globalisation

negatives of globalisation 

act utilitarianism on globalisation

rule utilitarianism on globalisation

kant on globalisation 

globalisation discourages ethical action

globalisation encourages ethical action

who created ‘good ethics is good business’

adam smith

supply and demand

division of labour