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Business Ethics / Ethics ~ Philosophy of Religion (STAKEHOLDERS: (A…
Business Ethics / Ethics ~ Philosophy of Religion
Spec Requires:
Key ideas, including:
corporate social responsibility
whistle-blowing
good ethics is good business
globalisation
The application of KANTIAN ETHICS and UTILITARIANISM to business ethics.
KEY TERMS:
Capitalism
: an economic and political system based on private ownership of how things are made and sold rather than in the hands of the state, where businesses are free to make profit (aka exploitation to the poor and the ideology that the rich get richer; poor get poorer)
Shareholder
: a person who has invested money in a business in return for a share of the profits the business has made
Corporate Social Responsibility
: the sense that businesses have wider responsibilities than simply responsibility to their shareholders. It includes the community they live and work in as well as the environment.
Whistle-blowing
: when an employer discloses wrongdoing to the employer or to the public
Globalisation
: the integration of economies, industries, markets, cultures and policy-making around the world
Stakeholder
: a person who is affected by or involved in some form of relationship with a business (employers, customers)
Consumerism
: a set of social beliefs that out a high value on acquiring material things 'vast carelessness' as the bourgeoise overlook the 'valley of ashes'
CORPORATE SOCIAL RESPONSIBILITY:
MILTON FRIEDMAN
argued that businesses have no other responsibility but to increase their profits, even going as far to say that it was unethical to anything else: taking money away from making profits to fund corporate social responsibility projects the equivalent of stealing money from shareholders.
Businesses take on corporate social responsibility for many reasons, including to promote themselves with potential customers, investor or employee; enhancing their image, reputation and representation and in the hope that it will prevent governments from imposing stricter social responsibility on them.
STAKEHOLDERS:
A related concept to corporate social responsibility is that businesses have much wider responsibilities than just their shareholders. Business decisions and business processes affect many groups, ranging from employers, suppliers, customers, the community in which the business operates, the country as a whole and their contribution to the national economy as well as the impact on the environment.
Businesses have a responsibility to everyone who has a stake in their activities - stakeholders.
CRANE
and
MATTEN
define stakeholders as an individual or group which either:
Is harmed by, benefits from the corporation
or
Whose rights can be violated or have to be respected by the corporation
Whilst corporate social responsibility offer good promotional opportunities, stakeholder responsibilities act as more of an obligation which a business cannot reject without serious reputational damage.
Stakeholders can pressure businesses into taking on corporate social responsibilities, even when businesses do not have to do so by law.
Although some businesses always try to 'do the right thing,' most tend to have mixed approaches to their social and stakeholder responsibilities. This can include 'philanthropic' corporate social responsibility projects alongside hard-headed business decisions that damage the interest of some stakeholders.
KANTIAN and UTILITARIAN responses to corporate social responsibility:
KANTIAN ethics focuses on treating people as ends and not as a means to an end (i.e. for other purposes) because we are being with freewill, dignity and autonomy (active agents). Companies which control and monitor employees excessively seem to exploit and lack respect the dignity of their employers. Companies that do not ensure safe, fair and ethical safeguards with healthy working conditions for employees would seem to be using humans as a means to end. They are not concerned about the well-being and interest of the employee which KANT does not agree with.
UTILITARIAN ethics focuses on the consequences of the greater good. This greater good could be interested in terms of greater profits but this could lead to ruthless attempts to increase income to the business. A utilitarian sets aside selfish interests and focuses instead in the interest of their workers, community, economy and environment.
WHISTLE-BLOWING:
This is reporting something that affects or threatens others. This can be seen as a moral choice or legal responsibility. Although whistle-blowing is encouraged by the government as is passes information of wrongdoing that can be fixed.
Although whistle-blowing is encouraged by the government because it serves the public good, there are also ethical issues involved for the individual thinking about whistle-blowing because of their responsibilities to their employer. The contract between employer and employee are the ethical foundation of a business where it sets our moral expectations.
NORMAN BOWIE
states that it is more ethical for an employee to make the effort to solve the problem though the business' own complaints procedures first, rather than resorting to whistle-blowing right away.
KANTIAN and UTILITARIAN responses to whistle-blowing:
KANTIAN ethics emphasises the importance of honesty and promise-making through the categorical imperative. A KANTIAN employee would find it difficult to allow a situation where a company broke the rules when the expectation is to follow it. This leads to no universality an important principle in the categorical imperative.
Whistle-blowing in a sense involves breaking promises and going outside the agreed systems. However, if a company were unfairly exploiting its customers, then a KANTIAN may interpret this as human beings not treated as ends but as a means for private greed.
When applying the principle of universalisation, in terms of
globalisation
, working conditions cannot differ from other countries, otherwise, according to the categorical imperative, it is not a moral law.
UTILITARIANS might resist whistle-blowing, depending on how much harm was done by the particular instance that was considered unethical or illegal. The utilitarian would have to weigh the balance of good or harm for all those with an interest in the business growing. It might be justified for a company to break some rules to succeed in a particular instance in order to create the greatest happiness through the greatest success of the business. A RULE UTILITARIAN might feel that there was a greater good of having companies in general always following the rules to keep the system of the business ethical.