business ethics
applying utilitarianism & Kantian ethics
CSR and globalisation
key issues
good business ethics and globalisation
whistleblowing
corporate social responsibility (CSR)
click to edit
a stakeholder is defined as 'an individual or group which either is harmed or benefits from the corporation OR whose rights can be violated, or have to be respected, by the business'
a business might exercise corporate social responsibility in a number of ways
they are responsible not just to their shareholders (those who invest money in the business) but also to their stakeholders
goes beyond just obeying the law and suggests that businesses have ethical responsibilities towards their employees, the community and the environment
they may do this internally by raising it confidentially with senior staff within the business or more publicly by alerting the media or authorities to what is happening within the business
many businesses have policies and procedure so that they can be adressed
in business refers to the practice of an employee drawing attention to unethical or illegal activity taking place within a business
a whistleblower may draw attention to various things, such as;
eg investing in staff wellbeingactivities such as yoga, sponsoring a youth football team, donating prizes for a charity draw, aiming to recycle more of the water
tax avoidance within a business
environmental issues that the company wishes to hide
cheating on tests or exams
discrimination or bias in recruitment or promotion procedures
although in theory whistleblowers have legal protection, the reality is that often there is a great cost in raising concerns; this may be loss of friendships, poor treatment subsequently from managers, and on occassions the loss of their job
the social responsibility of business
Milton Friedman
click to edit
click to edit
was an American economist whose idea of monetarism with its decrease government rules and regulations for
stakeholders
is anyone with an interest in the organisation
businesses take on social responsibilities because they think these will improve their image with customers or with a certain type of employee
eg: UK during COVID-19
when the pandemic took hold in the UK in 2020, many businesses had to furlough their employees; the government offered to pay 80% of the costs of furloughing
some business if they could afford to, went further and topped up their employees' salaries up to the full 100% to aid them
although other businesses could not afford to top up their employees salaries and not require taxpayers' money for the furloughing, still claimed and did not top up their employees' salaries
investing in 'ethical' business
there are many thousands of investors who only want too put their money into 'ethical' businesses
eg the UN has set up voluntary principles for ethically-responsible investment. as of 2014 investors had put more than $34 trillion into funds committed to these principles
maybe perceived as an individual moral choice. but in some cases, employees have a legal responsibility to report unethical behaviour because of the likelihood that this behaviour is criminal
legal protection
in most cases in the UK, whistle-blowers are protected by the law: The Public Interest Disclosure Act (1998)
what is globalisation?
impact of globalisation on wages
the impact of media exposure
reduction in poverty
ethics impacting decision-making
consumer culture in Europe
the idea that good ethics is good business is commonplace. Globalisation is the integration of the world economies, industries, markets, cultures and policy-makng
the idea that good ethics is good business also extends to business decision-making eg Google's former corporate motto, 'Don't be evil', has been replaced by 'Do the right thing'
generally, customers prefer to buy from ethical businesses, rather than from business they suspect of trying to cheat them, exploit others or cause social or environmental damage
businesses are often damaged when the media exposures their unethical practices - even if they are within the law. if customers start to perceive them negatively, businesses often change what they do
not only will customers relate positively to the business will be ore successful if all its decisions are ethical decisions
globalisation describes the integration of economies, industries, markets, cultures and policy-making around the world
moving production from wealthier countries - such as the US and Western parts of Europe - to countries such as China and India - where the wage paid is much lower than it would be in the MEDC's (more economically developed countries) - it had rapidly increased economic development and technology
although the wages that corporations pay in countries like China are for lower wages they would need to pay in Western countries, they re still much higher than those of rural workers, like peasant farmers in China
this has had enormous economic benefits for stakeholders in these emerging economies
Jeffrey Sachs says that, as a result of globalisation, the number of extremely poor people in India has reduced by. 200 million and by 300 million un China
moving production to low - wage countries has had major impacts on stakeholders in the US and Europe
consumers have benefited from cheaper products, duelling a consumer culture
outcomes > processes
Kantian arguments
weighing profits against outcome
Kant's c categorical imperative
support for CSR
Kantian view of globalisation
utilitarists would argue that as long the outcome secures the greatest happiness for the greatest number, then a company's intentions are irrelevant
CSR means that a business has a responsibility towards the community and environment
so ni a utilitarians view, if a business acts in a way that benefits the majority of its stakeholders, then it is a good business as it brings the greatest happiness to the greatest number of people
classic utilitarians, such as J Bentham and JS Mill, would likely support the concept of CSR
if this profit and greed benefits employees, governments and other stakeholders, then the end justifies the means
if CSR is just 'window dressing' for profit and greed, then this has to be weighed up in terms of the outcome
utilitarians in business ethics is primarily concerned with outcomes rather than processes - if the outcome leads to the greatest good (or the least harm) for the greatest number of people, then it is assumes the end justifies the means
utilitarians can be used in any business decision that seeks to maximise positive effects (especially morally, but also financially) and minimise negative ones
K argues that we have a duty to treat people as an end and not a means. if our prime reason for being ethical in business to make a profit inc the future, then this is not a moral action
K would argue that a business should be ethical and take responsibility for all stakeholders because that is the right thing to do. however if a business was simply being responsible to make a profit then. this would not be moral
So how people are treated in a business/the people who are directly affected by that business need to be taken into account. No one should be exploited or mistreated in the search for profit.
highlights that human beings are the pinnacle of creation; they are th highest point
if the company is acting just for its own good, then in Kantian terms it is treating the people of the poorer nations as a means, not as an ends
raises moral concerns beacuse pople in less developed countries keep getting exploited
globalisation
arguments: CSR is not a disguise
gobalisation discourages good ethics
arguments: CSR is a disgiuise
this argument says that companies behave in a more ethical way in. order to promote their business in a positive light to gain more custom and, consequently, profit
some argue that most businesses' association with social issues comes from a calculation that this association will help them increase their profits through building up a positive brand image with the customers they want to attract
it can't be hypocritical if they are held to account by the law, especially with whistle-blowing policies potentially being used against them
there is external pressure on businesses to act ethically. If that is the case, can they be accused of acting hypocritically when they are obliged to accept the responsibilities they have to they customers and other stakeholders
some transnational corporations have made sincere efforts to live up to their mission statements eg Microsoft, has donated well over $1 billion to charity since 1983
the pursuit of good ethics as the foundation of good business is something that the excess of globalisation might be encouraging
the roles of LEDCs (less economically developed countries) in the world market is mostly to provide the North and West with cheap labour and raw materials
critics include groups such as environmentalists, anti-poverty campaigners and trade unionists
operates mostly in the interests of the richest countries, which continue to dominate world trade at the expsense of developing countries
can humans flourish in capitalist & consumerist systems
capitalism: humans cannot flourish
consumerism: humans cannot flourish
arguments: humans can flourish
in consumerist societies, people frequently buy new goods. this kind of society places a lot of value on owning things. in a capitalist system, property, industry and business are privately owned
capitalism allows people to choose what to consume and this choice leads to more competition & better products and services
consumerism give individuals the power to make choices between a range of brands and acquire a wider ranges of products - ones that help them live a lifestyle that as only possible for the very wealthy decades ago. this is in turn, drives the economy - this drive has been behind many technological developments
capitalism has had a negative impact on the environment. it reduces the way we think about he planet as humans became more concerned with a collection of natural resources to be maximised and acquired
capitalism encourages individuals (and businesses) to pursue wealth and become greedy. they may act irresponsibly with regards to the environment ior ethics in the pursuit of gain
consumerism encourages a wasteful approach to the products we make. many products become dispose and peo[e do not keep products I the long term as there are so many technological advances