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Business Ethics (Key Points (Corporate Social Responsibility - The Idea…
Business Ethics
Key Points
Corporate Social Responsibility - The Idea that businesses are responsible for wider ethical issues rather than just focusing on making profit. They have a care for the wider community ''Good ethics is good business'' - Adam Smith (Utilitarian View)
Challenged by Milton Friedman - Rejects the idea businesses can have corporate social responsibility . ''Business'' can not have responsibilities , Only people can have responsibilities. To expect a business to function as a person is naive and unrealistic. Individuals can choose to do charitable or ethical things for the company, but the company itself cannot hold responsibilities. CSR is based on an acceptance of socialism rather than capitalism
Corporate Social Responsibility may be supported by Kantian Ethics, we have a duty to do business in good practice , this means respecting the dignity of our customers and not just treating them as a means to make money. We have a sense of duty
Religious people might feel a profound sense of responsibility for others and the world, we have to look after Gods Creation
Adam Smith - One of the fathers of Capitalism. Believed in the idea of supply and demand, if a business prospers then employment is high to meet needs, workers can have higher wages and in turn live better lives, which in theory also helps other businesses to prosper.
Adam Smith also talks about the Division of Labour *He gives an example of a Pin Factory, if you spread the task out more pins can be made thus increasing your profitability. Dividing a task up into stages and getting people to focus on one or two stages makes it more productive
Whistleblowing - Other employees or stakeholders go to someone higher up, such as a newspaper, and raises concerns about ethical or legal issues. They may not be satisfied with how the business chooses to organise itself or some of the companies behaviours
Globalisation - the integration of economies, industries, markets, culture and policymaking around the world
LEDCS - may produce more basic goods, cheaper and easier, such as food and resources e.g bananas, chocolate , raw materials. However there is the chance the labourers employed in these industries can be exploited
As a consequence, there is a loss in these kinds of industries in more developed countries as they can be made cheaper elsewhere,
Globalisation can see a loss of culture or identity, as multinational companies take hold in every nation and can be seen everywhere, the countries sense of self is lost. There are less chances for smaller businesses to take hold.
It might encourage businesses to behave more unethically, if they produce abroad as they can pay the workers less money some are employed in unsafe factory work (Primark factory collapse in Bangladesh in 2011)
Globalisation is often responsible for moving Western culture across the globe, big business already have a business model and an economic backing, giving no opportunities for new businesses to thrive in certain areas.
Capitalism - An economic system based on private ownership and free trade rather than government intervention
Ethical Theories
Kantian Ethics
Good ethics matters more than good business - Doing our duty should always come first as this is fixed . His example is the shopkeeper , he always charges his customers the fair and honest price because he knows this is good for business. Kant argues this is not enough, The shopkeeper has to charge the right price because it is his duty and its the morally right thing to do rather than because its good for business, in this way it becomes a good action
Kant is concerned with how we treat persons and human rights so would advocate for business to take part in Social Corporate Responsibility
The profit should not be the end in itself, but persons. This serves to protect both consumer and employees rights and gives them a sense of respect
Utilitarianism
Utilitarians may only be concerned with CSR when it produces the best effects, they would use the hedonic calculus to weigh up both the pleasures and pains to the business and to the consumers , much like a ''Cost-Benefit Analysis'' a systematic approach to estimate the strengths and weaknesses of their actions as a whole, (Crane & Matten)
The business has more freedom to act how it likes rather than in Kants approach, which seems to set unrealistic expectations of how a business should act. (Milton Friedmans View)
Utilitarianism concerns itself with the utility principle and how useful something is, they are flexible in their ideas. Bentham and Mill favoured freedom and less state intervention so probably would have agreed with the Capitalist views of Adam Smith . Businesses at first should be concerned with self interest, but acting in a responsible manner also brings about good business.
Whistleblowing - A utilitarian has to consider the risks and benefits for everyone who is concerned , including themselves
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