BUSINESS ETHICS (Ethical Theories (Utilitarianism:
Good of the…
- Free markets and deregulation.
- Only social responsibility is to shareholders, and to increase profits.
- Supporters argue there will be accidental benefits to this: i.e. to increase profits businesses might go green. (C.A.: also includes unemployment, mechanisation, cheap labour...)
- Interests of employer and employee are best served by employing according to supply & demand.
- Businesses prosper due to high demand > need higher supply > need more employees > more people being paid > employees spend more money > repeat.
- Thus, business & consumer and employer & employee have symbiotic relationships. We provide services out of self-interest and others benefit.
- Division of labour (pin factory).
- Capitalists like Smith put profit before people.
- Bourgeoisie gain profit by exploiting proletariat: wages don't reflect value of their labour.
- Division of labour leads to 'alienation', repetitive work, workers become less-skilled and less enthusiastic.
- Not symbiotic: bourgeoisie have the power, workers are merely surviving and can't negotiate for a better position.
- Will lead to revolution.
- Moral obligation to all stakeholders. (C.A.: business are property, not social justice distributors.)
- Social Contract Theory: Justice = "fairness", something we'd agree to from the hypothetical "original position" under a "veil of ignorance". Set aside differences; businesses and stakeholders should agree to these principles.
- Implicitly supports Mill's harm principle.
- Difference principle; talents only.
- Customer rights.
- Consumers push for ethical responsibility (Nike now monitor sweatshops) - change or bust!
- The Body Shop is an example of successful ethical businesses.
- Trade unions.
- Maintain balance of interests to maintain profit.
- Employee whistle-blowing (protected by 'Freedom to Care').
- Gain respect with environmental responsibility. Business Commitment to the Environment Award.
- ALL businesses impact the environment, but can be reduced.
- Challenging for businesses.
- Consumer pressure.
- Obey legal standards to protect reputation.
- Anglo American mining company created reed beds in streams around a quarry.
- Supermarkets reduce food miles / bag-for-life.
- Difference between economies shrink > similar trade.
- Increased in recent years due to:
- Technology & transport;
- Deregulation & privatisation;
- Removal of capital exchange controls;
- Free trade / economic liberalism;
- Widening or curious consumer tastes;
- Emerging markets in LEDCs.
- Businesses choose to operate in LEDCs > Indonesian sweatshops / Indian call centres.
- Businesses consider local variations.
- Rich countries have trade barriers = not fair (U.S. exports v. imports to Africa).
- Globalisation puts shareholders above employees / stakeholders.
- Singer writes about globalisation and urges a universal ethical system.
Ethics for businesses?
- Creates a better world.
- Increases profits.
- Leads to employee pride and motivation.
- Being ethical to increase profits isn't ethics (at least not deontologically).
- Strains business (look through supply chain; change whole structure; compromise employment for ethical practices; bankruptcy...).
- Disagreement; no clear standards to follow.
- Protestant work ethic: hard work, discipline, frugality.
- John Wesley: "gain all you can ... save all you can ... give all you can."
- Christians change business. 1600s: Quakers v slave trade.
- "Do not steal";
- Deuteronomy: fair weights, full payment = give full amount;
- Amos: social justice, fair treatment of poor;
- Golden Rule;
- Parable of the Talents: don't amass wealth for the sake of it.
- Bible doesn't address modern issues.
- Protestant teaching was divided: individualism and charitable capitalists Vs. inequality concerns of individualism and capitalism.
- Catholicism was never individualistic. Encyclicals praise workers' rights; the common good; condemn capitalism and communism.
- Prosperity theology: the Bible is a contract between God and Man. If humans have faith in it, God will deliver financial blessing. Televangelism.
- Job receives twice as much material wealth and servants (link to employees) as a reward for maintaining faith.
Christians and Capitalism:
- Parable of the Talents:
- Shows nothing is wrong with making profit.
- Wesley supports it: "make all you can", don't amass wealth, take risks at times.
- Parable of the Rich Fool:
- Don't hoard. Use increasing wealth to further the will of God and be generous to others.
- "Gain all you can ... Save all you can ... Give all you can." 3rd commandment isn't just on material terms.
- Jesus and the 10 commandments teach it.
- Relationship with God requires honest earthly relationships.
- Employees shouldn't steal from the workplace.
- Businesses need an honest relationship with stakeholders.
- MNCs poor relationships with LEDCs in many ways.
- Do MNCs 'steal' labour? How much pay isn't stealing?
- Capitalism exploits the weak.
- Based off Marx. Radical but Christian.
- Gives priority to the poor.
- Motivated by O.T. prophets who spoke against Israeli leaders and property owners.
- Amos: these aren't men of God, they "trample upon the poor", short-changing them and exploiting their power.
- Truly Christian societies put justice first.
- Founder G. Gutierrez: poor people in LEDCs must support capitalism so businesses invest in LEDCs; but this creates dependency, gives power to the rich, poor will never have power to work their way up. Pushing for changes within capitalism is futile, revolution is needed for a transformation.
- Don't "earn all you can" - fight for justice.
- Parable of the Sheep and Goats: failing to side with the poor = condemned.
- Good of the organisation is more important than individuals: employee sacked at the expense of the business; farmer gives up land for dam project to benefit community.
- Best business transactions benefit EVERYONE.
- Bentham's HC links closely to cost-benefit analysis.
- How long will it take to produce the product? Is the amount of pleasure it will bring proportionate to the amount of manual labour needed? Is the pleasure it brings lasting (benefits businesses as consumers will buy more)? etc.
- Suits managers weighing up stakeholders demands and going with what most want, and what will benefit the business.
- Bentham & Mill, Smith & Friedman emphasise liberty.
- Consequentialism suits Smith's 'invisible hand': Society works best when you act on self-interest - unless I take into account the wishes of others then it is unlikely that my business will succeed.
- Utilitarians: unless I follow the principle of utility, society won't flourish, I won't be happy.
- Not clear: closing a polluted factory benefits majority in long term, but thousands today become unemployed.
- Bentham's calculations are depersonalising. Businesses are made of individuals! Don't sack someone so you can improve product quality and please consumers.
- Minorities. You can sack an inefficient worker without warning. This happens in small businesses and workers struggle to exercise their rights.
- How much pleasure is too much pleasure? From sweatshops to perfect offices and 5 hour workdays, where managers earn the same as cleaners...
- Bentham would be happy about cigarette companies because they bring pleasure. MNCs justify products because millions buy them. No duty to CSR.
- Mill: cigarettes and fast foods are lower pleasures.
- B. Williams': personal integrity. Work for a brewery because it supports your family and happiness of majority despite being Muslim. It's not just about utility, but about personal values.
- Mill solves problems. E.g. he'd say close the polluted factory as it preserves nature and studying nature is a higher pleasure; or close cigarette companies, as smoking is a lower pleasure...
- Fairest way to run a business is to consider majority interests. Plus, please more people = more money.
- Protects the environment, as nature makes us happy.
- "Animal experimentation works because they're similar to humans."
- "Why don't you recognise similarities in suffering? Speciesist!"
- "You can experiment on one animal if it will save thousands of humans. But you have to do it vice versa too!"
- Animals clearly feel pain.
- Meat eating isn't justified. We don't need it and don't look to "inferior" animals for moral guidance when you say it's "natural".
- We're similar.
- Hunter's rule for determining personhood.
- Formulations of Categorical Imperative applies to everyone.
- Promise-keeping, rule-keeping, trust.
- Good will. Promise-keeping for reputation isn't moral. Forming a maxim from this is a hypothetical imperative and uses people as a means to an end. Profit should not be an end.
- Following hypothetical imperatives makes it impossible to reach the law-abiding Kingdom of Ends.
- Everyone in business is a moral community with moral value and duties. Thus, employees should have meaningful work (they're not solely means).
- Business ethics is just an extension.
- Business laws would be universal.
- Kant hints that international trade could bring world peace.
- Doesn't work in business world.
- Friedman: only duty is to shareholders.
- Can't work for Kant, as we must maintain equal duty to everyone.
- But, do all stakeholders have equal demands? Only way to tell is to assess all of their respective needs.
- But, this makes duties hypothetical and contingent.
- You can't uphold the Categorical Imperative in a successful business.
- People before profit = failed business. Triple bottom line suggests business success needs duty to profit, social and environment needs (= prima facie duties, abandons universalisation). Focusing just on environment and social but none for profit = failure.
- Not followed by everyone. Going green or not mechanising = high costs = more destructive, immoral and cheap businesses take your place. Same applies if you're 100% honest. We follow maxims as universal rules, others might not.
- Trust, follow rules, promise-keeping = fair business.
- People before profit upholds human rights.
- Universalisation = fair universal business laws.
- Deontological + teleological = allows response to changing society and cultures.
- Virtuous managers treat employees well and they acquire virtues through imitation, so the whole business will be virtuous, respected and thrive.
- A virtuous manager will be motivating.
- A good individual is a good citizen. Virtuous businesses support the polis.
- Value competition, but not at the expense of cooperation. This works, as business dealings need an atmosphere of trust - competition relies on cooperation.
- VE is interested in general traits that make a virtuous society, this can be applied to business. Business is a part of society, not separate from it.
- Virtues are the same for everyone.
- MacIntyre: we admire the values of the bureaucratic manager, but this isn't morally concerned with people, society, or virtue. Using business as a model for morality is incompatible with virtues with humanity as their foundation.
- Plural outlook is attractive for globalisation.
- Virtuous manager > virtuous business > profit.
- Values competition and cooperation. Works in business world.
- Equality. Businesses don't get special treatment.
- VE allows us to get it wrong and try again. This individualistic approach doesn't work on a business level.
- Legislation on human rights Vs. on courage, patience...
- Impossible for globalisation when virtues vary.
- Not clear enough.
- Justifies anything if it benefits the polis and is virtuous.
- Duty to society, anti-individualism.
- Collective responsibility means everyone is responsible for business ethics.
- Live in an ordered society = regulation, contracts, etc.
- Education = anti-child labour.
- Preserve innocent life: don't work for or support businesses benefiting from embryonic experimentation, contraception, etc.
- Telos = maintain natural order.
- Catechism: business owners are responsible for economic and ecological effects of business; obligated to act responsible; profits ultimately guarantee employment.
- Must believe in telos, and even then there's the naturalistic fallacy.
- Globalisation - NL must compromise on intrinsic goodness to allow accommodation to local values.
- Ordered society: what's a "fair" wage? Too general.
- Too inflexible for real business world; conflicting precepts: lie about sweatshops (ordered soc) or let Indians die (innocent life)? Jesus opposed legalism to do the most loving thing, NL doesn't allow this.
- PPs are objective truths; global business guidelines.
- Protects human life (foreign slave trades, etc.).
- Protection for human life means protecting the environment.
- No human rights abuse or exploitation (sweatshops, etc.).