Business Ethics

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  • Created by: Rhianna
  • Created on: 16-05-13 14:57

The relationship between business and consumers.

Consumers now influence business and are instrumental in bringing about change.

Consumers expect businesses to demonstrate ethical responsibilty, if they don't consumers will not use their goods forcing them to either change or go bust.

Some companies have been forced to change their practices such as Nike and Gap over child labour after featuring on the BBC news programe Panorama.

One of the first ethically responsible businesses was The Body Shop set up by Anita Roddick. 

Even small changes to business can improve its appearance to consumers.

Ethical business practices creates a better image and therefore better sales. 

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The relationship between employers and employees.

The Advisory, conciliation and Arbitration Service (ACAS) was set up in 1971 to create good and harmonious relationships between employers and employees. 

There has to be a balance of interest between the company who is focused on profits and improving the business and the employee who wants the highest possible standard of living and working conditions.

If the employees are unhappy this leads to high staff turnover, poor time-keeping, absenteeism and as a result poor profits. 

Relationships between employees and employers do not always work out. As a result of this whistle blowing has become more acceptable.  Whistle blowing aims to show the unethical and illegal behaviour of business. 

Yet this raises questions of loyalty and confidentiality as sensitive and private information is revealed. Yet this does not mean whistle blowing should not go ahead.

However, whistle blowers risk dismissal, and may find it difficult to finds similar employement in the future. 

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Business and the environment

Environmental responsibilty not only helps the environment but the business too.  It wins the trust of communities and the respect of the government. 

All businesses have an effect on the environment, they produce waste and pollution and use resources. 

Yet businesses are being encouraged to improve their behaviour with the Business Commitment to the Environment Award which the Co-operative won in 2007.

Anglo-American Mining Company

- Try to reduce pollution and noise.

-Active in conservation and improvement.

-Helps contribute finacially to the surrounding area.

Created reed beds which are an endangered habitat.

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Businesses are now freer and can chose where they operate from, meaning they can move to places where labour is cheaper.

National borders are becoming less important as markets stretch across them.

Customers are alike but not the same and businesses have had to consider this.

Not always fair, poorest countries have just 1.4% of the global income.

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Benefits of ethics for business

It creates a better image which results in higher profits.

Expensive and potentially embarassing mistakes are avoided.

Recruit higher qualified employees which means higher employee motivation. 

= higher profits.

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Problems of ethics for business.

It costs more.

They have to pay reasonable wages or pay more for environmentally friendly products.

If society does not have clear standards on particular issues it can be difficult for a company to know what to do. e.g. animal testing.

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The religious approach to business ethics.

'Do not steal'

Treat others how you expect to be treated.

Not amassing wealth for the sake of it.

Money is the souce of all evil.

Protestant teaching:

1. Individualistic approach:  individual's personal calling and integrity, so a business man can be praised for his charity.

2. Concern about the competitive individualism of capitalism and the great social inequalities it brought about.

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Utilitarianism approach to business.

Considers the majority affected by an action.

General welfare of the business more important than that of an individual.

E.g. Qualified employee give up job in the interest of the business.

Although the best business transactions are when everyone's interests are considered.

Would allow the Ford car example.

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Kantian Ethics

Categorical imperative:

univeralisation: cannot act how you would not want everyone else to do. e.g. if everyone lied in business there would be not trust.

Can not use people as a means to an end. No exploitation of workers.

Highest good is acting from duty. Therefore, it is not good if the business owner is only ethically responsible purely because of the good effects it would have on business and profits.

No bribery and corruption.

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Virtue ethics and the environment

Business cannot be separated from society, everyone is part of the larger community- the 'polis.'

Focusses on the character and motivation of the individual.

Virtue learnt through observation - look at the virtuous businesses of others?

Honesty, prudence, fairness, courage.

Traits that would make a good business man.

Using phronesis.

Using the golden mean.

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