business ethics Flashcards
(18 cards)
what is corporate social responsibility
the idea that a business has responsibility to the environment and its community.
eg Reducing negative impact on the environment such as pollution and non-recycled products.
Increasing the reliance on ‘green’ renewable and sustainable energy and products.
Offsetting negative impact done to the environment for example by donating to pro-environment groups that will make conservation efforts. E.g. a business aiming to be ‘carbon neutral’ might release some carbon dioxide through industry but donate for trees to be planted that might absorb the same amount of carbon their industry released.
Respecting human rights and avoiding exploitation.
Avoiding being supplied by any business which involves exploitation, sweatshops or child labour.
Responsible treatment of employees e.g. minimum wage, health and safety provisions.
Philanthropy. Donating money to charitable causes.
It is typically considered the responsibility of a business to ensure that none of the products or services in its supply chain are sourced from or make use of sweatshops
why do businesses take on CSR and effects on stakeholders
improve their image with customers or investor
make facilities better so employees don’t leave and work for competition
stop government putting restrictions on them eg businesses may agree to restrict intrusion on vulnerable celebrities due to fear of government legislation being introduced that bans intrusion into peoples private lives
stakeholders - all people involved in the business eg employees , suppliers, customers ect
so businesses have a responsibility to everyone who has stake in there activities
hard to reject obligations to stakeholders without repetitional damage EG a. transnational corporation wants to shut its steel works because global trends have made it unprofitable (decision likely to backed by share holders so there investments aren’t negatively effected) however the stake holders eg workers, suppliers, communities based round steelwork and government as loss of steel works would reduce tax payments meaning the business would be under extreme social pressure of stakeholder to reconsider
overall stakeholders press businesses into taking on corporate social responsibility even then they don’t have to by law
Kantian ethics on CSR
the 2nd formulation treat people as an ends not means Labour should not be treated merely as a commodity. A basic level of respect must be given to employees and all stakeholders.
Avoiding exploitation (community CSR). This includes paying workers enough, perhaps a minimum or even living wage.
Providing a safe work environment (community CSR).
Avoiding fraud or deceptive advertising (community CSR).
Avoiding polluting the environment or having a net negative impact on the environment (environmental CSR).
Pret-a-manger gave away their left over food away to charities at the end of the day. On the label of each sandwich they sell, they advertised this fact and stated ‘it’s the right thing to do’
however Kantian ethics could argue A business which engages in CSR for public relations purposes might be doing so to distract from their unethical practices and that doing it to look good is wrong because kant cares about intention and believes you should do something because its your duty
utilitarianism on CSR
focuses on the consequences for the overall greatest good
the greatest good could be looked at in terms of the greatest profit - ruthless attempt to maximise income and profit at all costs meaning could pay a low wage, bad facilities , cheap materials that harm the environment
however utilitarianism wants the greatest good for a broad number meaning all stakeholder interests need to be taken into account therefore could only ignore CSR if the good outweighs the and effects which it is unlikely to do
A rule utilitarian would argue that companies should establish rules that ensure fair wages, safe working conditions, and respect for workers’ rights. as this would create the greatest happiness in the long run even if it doesn’t in certain circumstances
act - case by case basis on what would cause the greatest happiness
is corporate social responsibility is nothing more than ‘hypocritical window-dressing’
suggests that CSR initiatives are superficial and insincere, serving primarily as a façade to create a positive public image rather than genuinely addressing social or environmental concerns.
no - companies may adopt sustainable sourcing practices, reduce their carbon footprint, promote diversity and inclusion within their workforce, or contribute to philanthropic causes.
yes- Some companies may engage in “greenwashing”(refers to the practice of conveying a false or misleading impression of environmental responsibility’s) or use CSR initiatives to divert attention from other unethical practices.
what is whistle blowing
Whistleblowing is when someone, usually an employee, leaks information about the wrongdoings of a company. This could be bad business practices regarding employees, customers, society or the environment.
eg if An accountant discovered that the business she was working for was avoiding paying tax it would be her legal and professional duty not just moral duty
whistle blowers are protected by the public interest disclosure act 1998
upside to whistleblowing is that the negative business practice is brought to light which gives it a better chance of being brought to an end.
norman bowie believes whistle blowing is bad and violates ‘a prima facie duty of loyalty to ones employer’
believes its more ethical to try solve the problem through business own complaints procedures first
company might suffer financial losses or even go bankrupt, causing some of or all of its staff to lose their job. In cases where the company was doing good, that could also be stopped.
case study - Sherron Watkins is known for blowing the whistle on the accounting practices at Enron Corporation in 2001. there were fraudulent accounting methods and financial misdeeds, which ultimately led to the collapse of Enron.
If a company is discovered to source products from sweatshops without that being public information, it might be thought to be a valid reason to whistle blow
kantian ethics on whistleblowing
Kant thinks lying cannot be universalised and is therefore always wrong. (categorical imperative) So, he would certainly also be against lying to cover up negative business practises, even if that truth being brought to light resulted in the failure of the businesses and employees who may have done nothing wrong nonetheless losing their jobs. It is your duty never to lie.
Kant would also regard the treatment of people as mere means to be wrong due to the second formulation of the categorical imperative. Most if not all cases of whistleblowing seem to involve exploitative or deceptive business practices that treat people as a mere means. This would be another reason that Kant would be in favour of whistleblowing.
utilitarianism on whistleblowing
might resist whistleblowing depending on how much harm was done and how much pain or pleasure it would cause
act - balance good or bad for all the stakeholders through the hedonic calculus
might be justified for a company to break some rules to succeed In a particular instance , to create greater happiness through the success of the company
for example the civil rights movement in the United States, where individuals and businesses defied segregation laws and policies to promote equality and justice, leading to significant social progress
utilitariansm and William MacAskill argues that although sweatshops are ‘horrific’, thinking that boycotting western companies which sell products produced in sweatshops will help the workers there assumes that they have a better opportunity to make a living elsewhere, but “sadly that’s just not the case”. If you boycott sweatshop produced goods “all you are doing is taking away the best working opportunity that these people in very poor countries have”
rule - may feel there is a greater good of having companies in general always follow rules to keep businesses ethical even if in a particular case not blowing the whistle may create more happiness
act utilitarians would say sherron Watkins shouldn’t have whistleblower as it lead to the company collapsing therefore millions of people losing their jobs
however rule utiltarianism would have the rule of you should whistleblow as that would create the most happiness if always done therefore Watkins was right
is good ethics good business
the idea that good business decisions are good ethical decisions
customers like to do business with companies they trust
A company known for its integrity might be able to charge higher prices for its products or services
An organisation honest in its dealings with suppliers and partners, for example, paying bills promptly, can negotiate better terms, get credit more easily
Honesty and fair treatment with employees builds trust and confidence. Good business requires a stable and reliable workforce, willing to share the goals of the organisation and take pride in their work
They might see honesty not simply in terms of being honest in dealings but honest in the quality of the good they produce, avoiding shoddy materials or using fairtrade or other ethically sourced goods as demonstrating their global responsibilities
In their relations with employees they may commit to fair pay by guaranteeing everyone at least the living wage
Honest dealings makes relations with trade unions much better, leading to industrial peace, without damaging strikes and walkouts
is good ethics bad business
when a business acts with integrity and offers and honest price for a job why do other businesses entice there customers with cheaper deals
competition - businesses compete with each other for market share , employees and investors
if being ethical risks increasing costs and reducing profits then most hard headed businesses take the decision to stay competitive
lord sugar believes the choice to be ethical is a branding decision - ‘are you the cheap one, the one with good service, the ethical one’
is good ethics sometimes good business
The worldwide recession of 2008 could have been prevented if sub prime mortgages were stopped being sold to people who did not have the means to repay however the money was good and so not stopped which is clearly unethical but if stopped the recession could have been prevented and therefore helping the businesses meaning good ethics would have been good business
Kantian view on good ethics is good business
what is globalisation
that around the world economies, industries, markets, cultures and policy-making is intergrated
problem with globalisation is that it can cause the violation of corporate social responsibilities and even undermine the free market itself.
Businesses may be less likely to violate CSR in western countries, but globalisation certainly allows them to violate CSR in developing countries instead.
William MacAskill although sweatshops are ‘horrific’, thinking that boycotting western companies which sell products produced in sweatshops will help the workers there assumes that they have a better opportunity to make a living elsewhere, but “sadly that’s just not the case”. If you boycott sweatshop produced goods “all you are doing is taking away the best working opportunity that these people in very poor countries have”
pros of globalisation
business are recognising csr - Bangladesh collapse - primary illegedly stopped using these dangerous sweat shops
cons of globalisation
damage to environment
exploitation
utilitarian view on globalisation
act Utilitarianism- emphasises the importance of maximising overall welfare, and proponents argue that globalization can lead to increased economic growth and prosperity. By promoting free trade, global markets, and international cooperation,
eg the reduction of trade barriers and the opening of new markets through globalisation can enable countries to specialise in areas where they have a comparative advantage.
rule utilitarianism - focuses on determining moral rules that, when consistently followed, will produce the greatest overall utility or happiness
rule utilitarian might argue that moral rules regarding globalization should include provisions for addressing and mitigating inequalities. They might advocate for rules that prioritize fair trade, protect workers’ rights, ensure access to basic necessities, and provide assistance to those disproportionately affected by globalisation.
can human beings flourish in the context of capitalism and consumerism
consumerism grants individuals the power to make choices and acquire more products which in turn drives the economy
capitalism is linked to protestant work ethic of hardwork, discipline and fragulity
capitalism incentivises human behaviour because there is a self interest in the outcome - if you make your business better you gain more of the reward
the more activity that is controlled by others the less incentive there is for you to make your business better
the problem with this approach is that it encourages people to pursue wealth and become greedy
capitalism reduces the way we think about the planet and consumerism encourages a wasteful approach to the products we make
does globalisation encourage or discourage the pursuit of good ethics as the foundation of good business
strengths and weaknesses of Kantian ethics
weaknesses
very abstract theory that does not always translate well to real world situations. eg it is unrealistic and naive to believe that a business should not consider profit at all in order to pursue an ethical goal. businesses cannot survive without profit
the 1st formulation of universality is not useful in business ethics as each situation encountered is unique and different so insisting that an action should be able to be applied universally is not helpful
focusing on a motive is difficult as motives cannot be proved. in Kants example of a shopkeeper (shopkeeper treats employees well because its good business) whether the shop keeping is ‘acting out of duty’ (motive to do the right thing’ or acting in accordance with duty is indistinguishable from outside and only known to shopkeeper
there are numerous stakeholders in business that we may have duties to so there are inevitably times whereby we may have conflicting duties .
strengths
the principle of universal law requires that we are consistent in our ethical decision making - this is important as it enables us to treat others equally and builds trust ensuring that people know what to expect from us
the principle of treating others as an ends not means to an end is important in ensuring that those whom we deal with whether employees or customers are not treated as data or numbers
Kants focus on the importance of motives ensures that CSR is genuine and not just an act or marketing ploy to attract customers
strengths and weaknesses of utilitarianism
weaknesses
act utilitarianism is very time consuming in the fast paced business world. if we consider every single possible effect on utility and all consequences, decision making becomes very complicated and long
Utilitarianism has no concepts of rights and does not value justice (unless shown to affect overall utility) Bethan famously referred to human rights as ‘nonsense on stilts’ hence we are left with the feeling that a utilitarian could allow things that many of us would consider unethical in order to reach an end
it Is not clear that the objectivity and impartiality utilitarianism promises can be achieved. experience of pleasure and pain are subjective - we may see a situation very different to how someone else sees it
it is also difficult to compare the different goods that may or may not be achieved by a decision eg an environmental benefit, a wage rise and an improvement in working conditions would all be measured in different ways
strengths
businesses are results driven. as a Teleological ethical theory, utilitarianism ensures focus on achieving the best outcome
act utilitarianism in particular gives flexibility to different situations. each situation that a business faces is likely to be unique and it may not be appropriate to have a rule based theory
benthams utilitarianism is hedonistic suggesting that humans are motivated entirely by pain and pleasure. advertisers use this principle of appealing to our desires or fears in selling products- suggests Bentham is not wrong about our motives
utilitarianism depersonalises issues
mill refers to a competent judge
singer refers to the impartial observer
highlighting how personal bias is put aside and we are looking at issues objectively
