Business ethics Flashcards
(37 cards)
What is corporate social responsibility (CSR)?
The idea that businesses have a responsibility, beyond making profits, to act in an ethical manner towards all stakeholders.
What is whistleblowing?
An employee doscloses unethical or illegal business practices to the employer or the public.
What may a whistleblower draw attention to?
- Tax avoidance within a business
- Environmental issues that the company wishes to hide
- Cheating on tests or exams
- Discrimination or bias in recruitment or promotion procedures
Milton friedman
- In ‘The Social Responsibility of Business is to increase its profits’ he argues against CSR
- It would lead to socialism rather than capitalism
- suggesting that a business should have ethical responsibilities in addition to the law distracts the business from its core purpose, which is to make money.
- He argues that it is a mistake to imply that the pursuit of profit is in some way immoral
What do most businesses operate using? which approach?
Utilitarianism by using CBA, this is when a business…. This case-by-case decision making is similar to act utilitarianism.
In applying act utilitarianism, there is a danger that the….
focus on pleasure and pain could be quite narrow and lead to shallow decison-making that may ignore peoples rights. Mill has a more subtle understanding of what the ‘greatest good’ means and appeals to the idea of higher vs lower pleasures; happiness is much broader than simple pleasure vs pain.
Rule vs act
Act allows a business some flexibility. However, being unsure of what a business is going to do may lead to uncertianity and a lack of confidence among investors and customers. A more rule-based utilitarianism, where a company adopts certian values or principles by which it operates, may lead to more consistency.
What is ESG?
A more contemporary version of CSR is ESG, Environmental, social and governance. The ‘governance’ term adds the requirement of avoiding political corruption such as bribery.
What is a free market?
Free market capitalism is the idea that the only responsibility of a business is to maximise profit for its shareholders.
Would Bentham and Mill allow a free market?
Bentham and Mill think that the free market is generally the best way to maximise happiness. They would likely accept environmental CSR because of how damaging climate change can be to happiness. However, regarding community CSR, they would probably reject philanthropy as a responsibility of business. Bentham did favour some regulations for employees like minimum wage. Ultimately, Mill and Bentham think the free market generally works for producing human flourishing and happiness. They would generally be against restrictions and responsibilities laid on business which would interfere with that
Kantian ethics in relation to a free market/treatment of workers
The second formulation would require that market interactions do not involve the treatment of people as mere means. Labour should not be treated merely as a commodity. A basic level of respect must be given to employees and all stakeholders.
CSR is typically a ….
CSR is typically a centrist or centre-left position. Those further left often regard CSR as hypocritical window dressing, meaning making something appear good while overall it is bad. A business which engages in CSR for public relations purposes might be doing so to distract from their unethical practices.
Is making a profit important in relation to kantian ethics?
Which stakeholders does this affect?
For Kant, our duty takes precendence over making a profit. This affects both the employer, who would have a dut to pay a fair wage, as well as the employee, who would have a duty not to take excessive breaks or overcliam on expenses as this would be dishonest and violate the universal law test.
What else is important to Kant?
Motive. he gives the example of a shopkeeper who treats customers well because it is good for business, thus acting in accordance with duty. But this is not purely good act as the motive is wrong. A shopkeeper who acts out of duty - their motive is to do the right thing - would be better.
What does Kantian ethics put greater value on?
honesty. This would affect claims that a business makes in its advertising and the extent to which it communicates with its workers if there are financial difficulties that may lead to job losses.
Would Kantian ethics support whistleblowing?
In most cases, whistleblowing would be supported where there are ethical concerns as, in Kantian ethics, the truth needs to be told. Although employees have a duty to thier company, they also have wider ethical responsibilities.
problems with focusing on duty in business ethics
Kantian ethics focuses on duty and treating people as ends in themselves, not as means to an end. But businesses must prioritize profit to survive. If every business acted only from duty and never considered profit, most would fail — and that could not be universalized (violates the first formulation of the Categorical Imperative).
Problem with kantian ethics being absolute
Kantian ethics is absolute — it doesn’t allow for exceptions. But business decisions often involve complex trade-offs. Inflexibility may lead to outcomes that are morally consistent but economically harmful. In additon, if a business has a duty to its employees then it needs to make a profit, as without doing so, employees could not recieve wages and good working conditions. Thus profit preceeds ethics.
Further problems with Kantian ethics
- Doesn’t consider consequences, which is vital in the business world, only motives
- Dutys may clash
- It is too idealistic and abstract which doesn’t always translate well to practical real-world situations
- Kantian ethics assumes that all moral agents are fully rational and autonomous, and should never be treated as means to an end. Problem in business: In practice, many consumer and employee interactions involve limited rationality, power imbalances, or systemic inequality. Strictly treating everyone as autonomous and rational may ignore these realities.
- An over-emphasis on intention (good will) rather than consequences
What is globalisation?
Globalisation is the phenomenon where businesses are now global entities spanning multiple countries and continents and its impact on stakeholders. Globally, economies, industries, markets, cultures and policymaking are integrated (connected).
What is offshore outsourcing?
where businesses build products in factories in third world countries. This moves jobs from western countries to those countries which has made many industry workers unemployed.
What protects the formation of monopolies?
The CMA (competition and marketing authority)
Legal issues with gloablisation
- laws are geographically limited. For example, UK law applies only in the UK. By operating in a multinational context, companies are able to exploit this by ensuring that something that would be illegal in one country is done in a different country where it is not illegal
- Such as variation in minimum wages
- Internet makes it more difficult to control business activities
Other than legal issues, what other issues can arise from globalisation?
- Cultural issues: difficulties can be caused due to different cultural beliefs and attitudes. May lead to loss of local identity and culture.
- Accountability issues: a company that is based in one country is clearly accountable to the laws and governance of that country, it is difficult to see how MNC’s can be held accountable for its actions.
