Business Ethics Flashcards
(36 cards)
What does the topic of business ethics involve?
The topic of business ethics takes Milton Friedman’s rejection of the idea of corporate social responsibility as its starting point. However, some ethicists think that businesses do have responsibilities ; those who don’t believe this may however value ethics as they believe that good ethics is good business. The topic also examines the impact of globalisation upon ethics as modern technology seems to present a whole range of new possibilities.
What is corporate social responsibility?
The idea that businesses are not just there to make money but also have wider ethical responsibilities to all stakeholders and their wider community.
Who has challenged the idea of corporate social responsibility?
Friedman argues that whilst individuals in their own time may choose as persons to take on social responsibilities or do charitable things, as employees they must serve the corporation or company, and that company cannot have responsibilities. If business makes money then stockholders, CEOs etc, may decide to spend their money benefitting the community, but this is not a responsibility of the company.
What does Friedman state within ‘The Social Responsibility of Business Is to Increase Profits’?
“What does it mean to say that ‘business’ has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities.”
What is socialism?
A political and economic theory which argues that the means of production should be owned or regulated by the community as a whole.
Who are the ‘stakeholders’?
Any individuals or groups who are affected by the actions of the business or organisation.
Who are the ‘shareholders’?
The individuals who own the company or shares in the company and hence gain when the company profits.
What is the FTSE4Good index?
An example of an attempt to measure the extent to which companies display corporate social responsibility. Companies are given an ESG, environmental, social, governance, rating.
What did Cadburys do?
Cadburys built schools and parks for its workers, they believed it was their duty towards their workers. Like many companies, it is keen to ensure its products are Fairtrade.
What is capitalism?
An economic system based on private ownership and free trade rather than government intervention.
What is Adam Smith’s approach?
One of the fathers of capitalism, takes a slightly softer view than Friedman. He shows that very often good ethics is good business. Smith’s approach is essentially utilitarian. Businesses have a symbiotic relationship with both their customers and employees, thus they provide good services out of self interest knowing that we will benefit in the end.
What is Smith’s ‘law of supply and demand’?
How much a business charges or how much it pays its workers is linked to how many workers are needed or are available.
What is Smith’s ‘division of labour’?
The division of labour makes factory production more efficient. Instead of one person doing a,, the stages of the manufacturing process, a ‘conveyer belt’ type system which splits production into stages is more efficient, even if it is more repetitive for the workers.
What is Immanuel Kants approach to business ethics?
Good ethics, doing our duty, is more important than good business. Kant uses the example of a shopkeeper who always charges others fairly because he knows that this is good for business. Kant concludes that even this is not sufficient for the action to count as morally good. The shopkeeper is acting in his own interest. It is only if he charges people fairly out of duty that this becomes a good action.
What does Robert Solomons argue.?
It is not possible to divide business from the rest of life. Too often people’s behaviour in their business lives bears no relation to how they act outside of work.
What is whistleblowing?
When an employee acts in the public interests to alert the employer or the public to wrongdoings within the organisation.
What is private whistleblowing?
The whistleblower raises concerns internally within the company.
What is public whistleblowing?
The whistleblower raises concerns outside the organisation in question, for example, by alerting the media.
What is the Kantian ethical approach to whistleblowing?
One must carry out one’s duty as an employee, however, there are occasions when wider duties to our fellow human beings may override these.
What is the utilitarian approach to whistleblowing?
Whistleblowers have to make calculations about the greater good or harm that may come from choosing to speak out or to remain silent.
What is globalisation?
The integration of economies, industries, markets, culture and policy making around the world. Our ability to make connections is both quicker and more widespread than our ancestors.
What are the effects of globalisation?
Increased competition, lower wages or loss of jobs in developed countries as manufacturing is cheaper abroad, loss of culture and national identity.
Why does minimum wage influence manufacturing?
Minimum wage leads some manufacturers to make products abroad. They may be tempted to resort to the lowest common denominator and cut corners in terms of workers rights in order to get products made more cheaply. The Rana Plaza Factory incident depicts this.
What might a utilitarian suggest on globalisation?
Millions of people have been lifted out of poverty in counties such as China as a result of global trade. Yet, there is evidence that the gap between rich and poor is increasing. In addition, the utilitarian does nor have a clear notion of rights and may see the greater good of globalisation as worth the price of some individual suffering.
