Business Ethics

Question 1

What do business ethics consider?

Answer 1

The ethical relationships between businesses and consumers.
The ethical relationships between businesses and employees.
The impact of globalisation on the environment and society.

Question 2

What do ethicists say about business ethics?

Answer 2

Some see the main purpose being to maximise profits for its owners or shareholders.
Others consider that businesses have moral responsibility towards their stakeholders.

Question 3

What did Milton Freidman say about business ethics?

Answer 3

Only actions that increase profits are encouraged as this is the only way companies survive.

Question 4

What is social contract theory?

Answer 4

John Rawls created the idea that employees and stakeholders should have a voice in how the business operates.

Question 5

Why do people not agree with social contract theory?

Answer 5

This view is criticised because
businesses are property and not a means of distributing social justice.

Question 6

What has happened to stakeholders as time has changed?

Answer 6

Stakeholders (in particular consumers) are becoming increasingly powerful and vocal, forcing businesses to review their strategies.

Question 7

What key issues do the body shop and cooperative bank focus on?

Answer 7

They have brought business ethics and social responsibility to the public eye as they champion key issues such as human & animal rights, fair trade, and environmental impact.

Question 8

What do consumer rights include?

Answer 8

Quality, safety, price, and customer service.
But consumers also expect businesses to demonstrate ethical responsibility.

Question 9

What did fatface do to be more ethically conscious?

Answer 9

They donated money to charity instead of partaking in black friday reductions.

Question 10

What was the Advisory, conciliation & arbitration service set up for?

Answer 10

In the UK in 1978 ACAS was set up to try to create good and harmonious relationships between employers and employees.
It negotiates in disputes and has reduced major employment disputes.

Question 11

What are the risks of being a whistleblower?

Answer 11

In many countries whistleblowers are protected under law however they still risk dismissal and may struggle to find similar employment.
Freedom of Care helps to protect them.

Question 12

How are businesses encouraged to be more environmentally friendly?

Answer 12

• every year there is a prestigious reward (the Business commitment to the Environment Award- awarded to Co-op in 2007)
• Businesses are encouraged to have an environmental policy
• UK law and UN global compact also provide minimum standards for how businesses treat the environment (conforming helps to protect their reputation.

Question 13

Supermarkets and the environment

Answer 13

They are one of the businesses where ‘green credentials’ have become increasingly important.
Concerns about food miles and plastic & packaging have been growing among consumers.
They are starting to understand that responding to consumers preferences, helping the environment, and corporate social responsibility go hand in hand.

Question 14

What does globalisation mean?

Answer 14

Globalisation is the reduction of the difference between one economy and another, so trade all over the world (global), both within and between different countries, becoming increasingly similar.
In simpler terms it is a company/ business going global all for economic gain.

Question 15

What are some reasons for the increase of pace of globalisation?

Answer 15

Technological change
Transport is faster and cheaper
Removal of capital exchange controls
Free trade
Consumers are now more willing to try foreign products
Many emerging markets in developing countries.

Question 16

What problems does globalisation bring?

Answer 16

Trade between countries is not totally fair- for example the US have strong trade barriers in order to protect their national interests.
Globalisation means that the interest in the stakeholders is more important than the employees and consumers.

Question 17

What are some benefits of a business being ethical?

Answer 17

It results in a better image being given to the world and consumers which results in greater profits.
It means that expensive and embarrassing public relation disasters are avoided.

Question 18

Applying utilitarianism to business ethics. GOOD?

Answer 18

Utilitarianism considers the majority affected by certain decisions and actions- “greatest good for the greatest number”
For example, a farmer may have to give up some land for a project (dam) which will provide irrigation for many farmers and electricity for the whole community-a small loss for a large gain.
The best business transactions are those where the best result is achieved.

Question 19

Applying utilitarianism to business ethics. BAD?

Answer 19

Closing a polluting factory may be seen as good for the environment, but isn’t good for the local community who needed the jobs.
Whatever decision a business makes, there will always be a group of people who are made upset by the choice.

Question 20

Applying kantian ethics to business ethics. GOOD?

Answer 20

Kant believed that morality n all spheres of human life, including business ethics, should be grounded in reason.
Kant’s theory implied the necessity of trust, adherence to the rules, and keeping promises (contracts)
Kant argues that if a merchant is honest in order to gain a good reputation, then the act of honesty is not truly moral

Question 21

N.E. Bowies quote of Kant in his book Business Ethics (1991)

Answer 21

“In the end, war itself will be seen not only as so artificial in outcome for both sides