3. Business ethics - Issues in Business
- Created by: Alasdair
- Created on: 23-06-17 14:10
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- 3. Business ethics - Issues in Business
- Exploitation
- Customers may get exploited by monopolies who charge high prices in the absence of competition
- e.g. The Competition Commission threatened legal action against BskyB to lose their monopoly over football broadcasts
- Workers may get exploited by large companies where there is no choice but to accept lower wages
- e.g. Sweatshops in developing countries
- Customers may get exploited by monopolies who charge high prices in the absence of competition
- Externalities
- Negative externalities
- External costs created by company but affect others
- Include noise, pollution and congestion
- Example
- in 1996 Trafigura dumped tonnes of Toxic Waste off the Ivory Coast
- Caused burns and nausea and release of toxic sulphur dioxide
- Can be dealt with easily though
- Example:
- the Anglo-American Mining Company situated mines away from residents to reduce noise pollution
- Example:
- Negative externalities
- Government regulations
- Milton Friedman argues that business pursues profit subject to limits set down by law
- Businesses serve owners/shareholders, so governments should set social policy
- This can lead to unethical business practices
- Examples
- Union Carbide pesticide plant in Bhopal, India, leaked a chemical that killed 8,000 in 3 days
- Indian government encouraged dismissal of health and safety as there are no health and safety regulations imposed
- Individuals only received $1000 each, but there was still evidence of birth defects, liver and kidney disease, etc.
- Examples
- Milton Friedman argues that business pursues profit subject to limits set down by law
- Globalisation
- Crane and Matten
- Globalisation is "deterritorisation"
- Location is now irrelevant
- Globalisation is "deterritorisation"
- Examples:
- Sweatshops, where companies from economically developed-countries are setting up factories in less-economically developed countries to maximise profits and savings
- Creates jobs
- Exploitative - the workers in LEDCs do not receive fair wages compared to MEDCs
- Transnational companies respond with argument cost of living LEDCs is lower than in MEDCs, so they are still making enough
- Also can take jobs away
- e.g. Nike closing a factory in US and opening one in Indonesia
- US citizens made redundant in Nike case
- Crane and Matten
- Exploitation
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