2. Business ethics: Purpose of business

  • Created by: Alasdair
  • Created on: 23-06-17 13:42
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  • 2. Business ethics: Purpose of business
    • Milton Friedman
      • "The purpose of business is to make money"
    • Maxwell
      • "There is no such thing as business ethics"
      • There are no moral obligations for business and employers/shareholders
    • Corporate Social Responsibility (CSR)
      • To be morally responsible for corporate actions and to the environment and stakeholders (consumers, employees, investors, communities and others)
      • Example
        • The Body Shop which tackles animal rights and Fair Trade issues
    • Stakeholder Theory
      • Will Hutton
      • All stakeholders should have a share in the business
    • Adam Smith and ethical egoism
      • Businesses are "led by an invisible hand"
        • Which is a price mechanism that leads to price rises when there is a shortage, and price reductions when there is competition
      • Consumer choice drives the market into a "win-win" situation
        • Where consumers want fair prices and good quality and this leads to businesses that provide good quality and fairly priced products being rewarded
          • Consumers save money and businesses make profit
      • The "win-win" view is utilitarian, but Smith argues that self-interest is not selfishness (ethical egoism)
        • by pursuing self-interest, a person is putting the business first, which can serve common good of others (e.g. stakeholders)
      • Louis Pojman
        • "We are concerned to promote our own good, but not necessarily at any cost"
        • Julian Baggini: "Good ethics is not necessarily good business"

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