Buisness Ethics

Buisness Ethics

1. Kantian Ethics

   • Kant's example of the wig makers
     • This is a good example of a shopkeeper not overcharging his customers; but doing out of duty.
   • Categorical imperative
     • You must consider all stakeholder
     • You cannot treat your employees as a means to an end
   • Corporate espionage cannot be universalised because eventually there would be no new ideas to steal
   • You should whistleblow. It is your duty to expose unethical practices. Consequences and empotions are not considered

2. Key Issues

   • Employees and Employers
     • Whistleblowing
       • When an employee informs the authorities about unethical practices by their employer
       • The employee might lose his/her job and not be compensated
       • The employee might also harm the business and lose friends
     • Sometimes both employer and employee might be unethical in the search for profit. They might take part in corporate espionage
   • Businesses and Consumers
     • Consumers may take action if:
       • The consider a business to be unethical in some way
       • They consider a business to be acting irresponsibly
       • They think that the business uses practices that they think are unacceptable
     • Ford Pinto
       • It would cost Ford $137 million to recall and fix issues in some cars. It would only cost them about $50 million in lawsuits. Because this was a cheaper option, they decided to let people die.
   • Stakeholders
     • An individual or group who has a stake in the business
     • Stakeholder theory
       • Interests of all stakeholders should be considered in any decision
   • Businesses and the Environment
     • Environment damage is a natural consequence of the growth of business and industry
       • Natural habitats are destroyed as factories are built
         • Growing energy demands lead to the building of more power stations and pollution
     • The damage done by the West in the industrial revolution is now being repeated on a larger scale in China
   • Business and Globalisation
     • Globalism
       • Operating economic or foreign policy on a global basis
     • Globalisation
       • This is the process businesses or organisations develop to have international influence. This is how you achieve globalism

3. Utilitarianism

   • Principle of Utility
     • How this is applied depends on who is the largest group
     • Customers are often the largest group, this could result in poor working conditions because the business is trying to maximise happiness for customers by lowering costs
     • Conversely, if people are happiest with ethical conditions for workers, then this is what will be done to keep the greatest number happy
   • The energy company Enron lied about the state of their finances, as a result the shareholders lost $11 billion
     • Because Utilitarianism is consequentialist, lying in that situation was wrong. If it had worked and the business had made more money, lying would have been okay.
   • Adam Smith's Invisible Hand Theory
     • This is the idea that the marketplace will self-regulate. Smith said that businesses have very little control over the market. E.g. If there is a shortage of goods, the invisible hand will step in and raise the price of the goods.
   • Utilitarianism could be used to support Friedman, but this could also mean doing whatever is necessary to achieve the desiered result.

4. Virtue Ethics

   • For Aristotle there are two types of business
     • Household Trading
       • Where a farmer, who has crops, trades some of this for, let's say, clothes
         • Aristotle thought this was a vital part of a eudaimon society. Exchanging goods for money or services help society function because everyone cannot be an expert in all aspects of life
     • Trade for profit
       • Saw this as 'wholly devoid of virtue'
         • Trade done for profit does not result in acquiring any true wealth
           • True wealth is "the stock of things that are useful in the comminity"
             • Money only has value if you exchange it for something useful
   • Businesses such as the co-operative help the community achieve eudaimonia
     • Virtue ethics would not agree with Friedman, but would say that profit is a way for the stakeholders to achieve eudaimonia
       • To become virtuous you might follow a role model, such as Richard Branson