Business Ethics
- Created by: AroojTahir
- Created on: 23-04-19 20:32
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- Business Ethics
- Corporate Social Responsibility
- Corporate Social Responsibility: idea that a business or organisation has ethical responsibilities to the wider community and environment
- Idea that business arent there to make money but also have wider ethical responsibilities to all stakeholders-any individual or groups who are affected by the actions of the business or organisation.
- Challenging corporate social responsibility
- Idea of social corporate responsibility was challenged by Friedman.
- Friedman: individual choose persons to take on social responsibility,as employees serve the company.
- Business makes money then stakeholders may want to reinvest the money and benefit the company.
- Free market allows higher wages.
- Want a business to benefit society and then make them into public employees.
- Friedman argues it involves an acceptance of socialism.
- "Only one social responsibility...increase its profits...engages in open and free competition without deception" Friedman
- What might corporate social responsibility involve?
- Businesses have other responsibilities than making money.
- Corporate social responsibility motivated by a pragmatic approach 'good ethics is good business' Kantian sense of duty.
- Cadbury built schools + parks for workers (duty). Fair-trade.
- Good Ethics and a Good Business
- Adam Smith: good ethics is good business
- Father of capitalism: softer view than Friedman.
- Shows often good ethics=good business. Smiths approach is utilitarian.
- Businesses have a symbiotic relationship: customers and employees.
- May benefit us to overcharge customers and pay low wages=harm reputation.
- Provide good services, Smith argues we do it from self interest as we know we will benefit in the end.
- Smith: Law of supply and demand. How much businesses charge+pay workers links to how many workers are needed.
- Smith: division of labour, factory work efficient. Conveyer belt of production.
- Immanuel Kant: good ethics makes more than good business
- Kant argues good ethics and doing our duty is important compared to good business.
- When a business owner charges fairly its not morally good as the shop keeper acts in his own interest.
- Kant argues if he charges people fairly out od duty then it becomes a good action.
- Solomons argued its not possible to divide businesses from the rest of life.
- Some people behaviour in business has no relation to how they work outside of work. Shouldn't be like this.
- Adam Smith: good ethics is good business
- Whistleblowing
- Whistleblowing: when an employee acts in the public interest to alert in the employers or the public to wrongdoing within the organisation.
- Types of whistleblowing:
- Private: whistleblowerraises concern in the company.
- Public: whistleblowerraises concerns outside the organisation e.g. alerting the media.
- Reasons for whistleblowing
- Breach of company rules.
- Discrimination
- Bullying/harassment of employees.
- Danger to the public
- Illegal activities
- The cost of whistle blowing
- Whistleblower risks in raising concerns, there are laws to protect whistleblowers- anonymous procedures.
- Face realisation from colleges, legal action and losing their job.
- Ethics and whistleblowing
- Whistleblowing ensures companies take corporate social responsibility seriously. Follow up if they behave ethically.
- Whistleblowing encourages integrity from employees.
- Some situations where loyalty is important.
- Kantian Ethics: duty as human employees. Duties to fellow human override.
- Certain duties integral to the profession.
- Utilitarians: calculations about greater good or harm from speaking out of remain silent.
- Globalisation and business
- What is globalisation?
- Integration of economies, trading and political movements around the world.
- Our ability to make connections quicker and widespread.
- Technology, political, economically and culturally connected.
- Effects of globalisation
- Rise of large multinational corporation in many countries.
- Increased competition in manufacturing and services- cheaper to get it done abroad.
- Economic growth in developing countries as they're competitive economically.
- Ethics and globalisation
- Different countries have different health+safetyrequirements,regulation less.
- Uk minimum wage- cut corners.
- Globalisation helped poverty due to global trade.
- Gap between the rich and the poor is increasing.
- Utilitarian doesn't have a clear notion of rights and see greater good of globalisation.
- Kantian concerned with globalisation could increase globalisation.
- Neo-colonialism: leads to a loss of identity in developing countries.
- In developing countries: jobs may be lost as things may be produced cheaply elsewhere?
- Less incentive on environmental standards if next country worries about global countries.
- President choose between enforcing environmental rules and lose business.
- What is globalisation?
- Utilitarianism and business
- Applying utilitarianism
- act: Decisions case by case but rule depending on long term commitments
- Flexible and weighs up individual situations considering economic benefits.
- Bentham+Mill: favouring freedom. Fits with smiths idea of enlightened self interest. Free to run our business, behaving ethically.
- Judgement regarding risks and benefits for all conceived.
- Case studies: Volkswagen emissions
- 2014W found to have some fitted device enable to pass exhaust emissions test: computer adjust for output.
- Device undetected then profits increase. Deception discovered then refunds and fines.
- Rule utilitarian: honesty always the best policy.
- Assessing utilitarianism on business ethics
- Gives freedom. Business consider and calculate what's right.
- Society flourishes when individuals flourish. Possible options rather than imposing.
- Utilitarian depersonalises issues. Look logically and not emotionally attached.
- Utilitarianism difficult when weighing up the right course of action.
- Applying utilitarianism
- Kantian Ethics and Business
- Applying Kantian Ethics to business
- Do our duty regardless of consequences. Possible profit loss.
- Employees duty of honesty to their employer.
- Rights in workplace. Autonomy and dignity.
- Case study= Sports Direct
- 2016, undercover investigation supported by whistleblowers- committee of MPs.
- Workers disciplined for being off sick, timed on toilet breaks.
- MPs "workers treated like commodities"
- Assessing Kantian Ethics on business
- Priority to rights over profits. Good thing but debatable whether its realistic to ignore profits.
- Universal law doesn't help. Make specific decisions.
- Kantian Ethics focus on motive and do the right thing. However, motives hard to assess.
- Duties to all various stakeholders in theory-may lead to conflicting duties.
- Applying Kantian Ethics to business
- Corporate Social Responsibility
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