BUSINESS ETHICS

  • Created by: mkimani
  • Created on: 29-09-18 14:33
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  • BUSINESS ETHICS
    • What is it?
      • A business has responsibility towards the community and environment
      • Milton Friedman argued that the only responsibility businesses  have is to make money and the purpose of business is to maximise profit - this is how companies survive
      • John Rawls argued that businesses have a moral responsibility to stakeholers and stakeholders should be given a say in how the business runs and operates
      • Adam Smith - wrote about 'invisible hand' of the free market; the system would regulate itself and succeed because of this - thought humans were selfish (individualism).
    • Whistleblowing
      • A person who informs on a person or organisation regarded as engaging in an unlawful or immoral activity
      • In most cases in UK, whistleblowers are protected by the Interest Disclosure Act 1998 and in the US there is Sarbanes-Oxley Act 2002 under which business executives who retailate against whisteblowers can be jailed for up to 10 years
      • Social commentators argue that it encouraging it convinces businesses to take their corporate social responsibilities seriously
      • Norman Bowie states t hat whisteblowing violates a 'prima facie duty of loyalty to one's employer'
    • Employers and employees
      • Maslow;s hierachy of needs is a pyschological / motivational theory which basically argues that happy workers are hard workers however in reality if employes arent content then people who need jobs can replace them
    • Globalisation
      • The intergration of economies, industries, markets, cultures and policy-making around the world
        • Untitled
      • Reasons include: technological change / faster + cheaper transport / deregulation/ free trade etc
      • STRENGTHS: -Cheaper products / - jobs for those in less developed countries / - links between countries and businesses
      • WEAKNESS: - expolitation e.g. Rana Plaza disaster 1100+ died and 2500+ injured in Bangladesh factory supplied Primark and Walmart, Benetton
    • Corporate Social responsibility
      • In corporations no one person is liable for debt, investors buy shares and appoint people to run the business. These people should act on behalf of shareholders
      • Milton argued that any actions by CEO which knowingly reduced profits was stealing from shareholders and its unethical to do anything other than make money and increase profits e.g. using more expensive sustainable material when u can source the materials more cheaply
      • Natural Law - Cardinal Vincent Nichols taught there were 7 principles for good business from 'the blueprint for better business' ; human dignity / common good / solidarity / subsidarity / fraternity / reciporcity / sustainability
      • NATURAL LAW - Grisez argued that corporate finance is not vitous. Aquinas was opposed to usury because goes against primary precepts. Leads to exploitation of consumers which goes against a harmonoious society.

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