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Unit 12 Lecture (Business ethics - application of concepts to business…
Unit 12 Lecture
Business ethics - application of concepts to business dilemmas and practices - individually focussed
CSR - the study of business strategy in relation to the firms impact or contribution to society as a hole - more firm focussed
Stockholder Theory:
Only one social responsibility of a business - to use its resources and engage in acivity designed to increase profits, as long as it stays within the rules (Milton Friedman)
So for example we employ people to do the work, not out of a sense of duty
Stakeholder theory:
Argue that the activities of a business affect other groups in society
It is argued that stakeholders have more interest in the long term of the company rather than short term profit
Stakeholders include shareholders, suppliers, workers, customers, society, government etc
Justifications for stakeholder theory:
- Where there are legal relationships
- Externalities - groups affected, positively or negatively
Stockholder theory:
Management has no additional resp fr others beyond paying them for what they do and ensuring work is efficient.
Stakeholder theory:
Mnagement represent the interest of all stakeholders. Decisions not based on increaseing the share value of stockholders
Wll being of employees, suppliers and host communities have to be taken into consideraton
Why CSR?
- corps control huge resources, human and natural and therefore have a responsibility to use responsibly
- Through operation, corps have both positive and negative direct impacts and shouldbe accountable
- Corp actions create secondary effects which may have wider consequences
R in CSR?
- Responsibility - commitment to being identified as the cause of an action and respond to it
- Technical problems: multiple contributors, who to identify?
- Multiple environments - undermines the idea of informed choice
- Long stretched out supply lines diminish control
Can a corp be 'moral?-generally moral is a human action or notion
- corps are not humans
- Does this mean that moral evaluations and measures do not apply to the context of corps?
- How could corps have any ethical responsibility?
Responsibility in an impersonal firm:
- corp decision structures can be judged
- Org culture - values and beliefs that lay out what is considered right and wrong in an org
Components of CSR:
- Discretionary responsibilities - be a good corp citizen
- Ethical responsibilities - be ethical (do what is right and fair)
- Obey the law - Society's measure of right and wrong
- Be profitable - this is the foundation upon which the others rest
Responsibilities:
- Philanthropc
- Ethical responsibilities
- Legal
- Economic
CSR is a vague theory and practice. Need to consider how companies present this
- Many different types of corp doing different things
- Future - B Corps? Benefit corporations. Think of Cadbury etc
Defining sustainability:
- For development, meets the needs of the present without compromising the future
- FOr progress - for developing human progress, developing as well as developed societies
- FOr the economy - eg environmental protection should contribute to economic growth
- For business - long term maintenance of sustems accordng to environmental, economic and sociak considerations
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3 P's:
- Bottom line thinking suggests sustainability as a base line goal with 3 dimensions:
- Economic perspectives = profit
- Social perspectives = people
- Environmental perspectives - Planet
The rationale is that we cannot address environmental issues without also addressing economic and social issues
CSR = 'enlightened self interest (excellent definition)
Sustainable business should help:
- Reduce costs
Increase prod
improve comp image
satisfied customers
happier motivated employees
reduce risk
protect environment
Critique 1 - Greenwash!
Adopted as a rhetoric, nit an ethical value
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Critique 3: Efficiency focus
Need of a multi layered approach:
- Eco-efficiency
- Socio-efficiency
- eco-effectiveness
- Socio-effectiveness
- sufficiency
- ecologial equity
Critique 4 - Reporting:
- Few stakeholders, cherry picked elements of news and generally ignore major social issues. Often footprints and social justice etc are ignored
Critique 5 - Linear growth
- Sustainability means literally the capacity to endure and in so doing, grow
- Will future generations really enjoy the same living standards as us without reversal of the trend of ever more production/consumption
Critique 6 - Ecological time clash:
- Human perspective
- Ecological perspective
Critique 7 - Anthropocentrism:
- sustainability is human centred
- Dedicated to the enduring of humans
- tied up with economic thinking
- based on a vision of 'our' nature
-towards an ecocentric approach?
Critique 8 - capitalocentrism:
A dominant economic discourse that give positive values to capitalist activity and assigns less value to all other processes of producing and distributing goods and services
- Redefinind sustainability:
- Living with material comfort peacefully within the means of nature
- Strong definitions of sustainability focus on maint rather than growth
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