business ethics

• Henry Ford quote


  A business that makes nothing but money is a poor kind of business
• Ford Pinto case 1970


  Major design flaws were discovered the gas tank was prone to rupture causing fire and explosions for chose to not implement suggested safety changes which would've been £11 per car and calculated the paying for the deaths and injuries was cheaper than making the car safer. The pinto was designed in a rushed 25 months instead of the typical 43.
• Anita Roddick


  Promotes good business as she is the body shop owner over earning more because it's the right thing to do she does this for intrinsic reasons
• alan sugar


  being the ethical one is just a "hook" to get people to come to you he says people do for extrinsic reasons.
• Corporate social responsibility


  A business is concerned for society. Welfare businesses have a duty and an obligation to consider the effects of their activities on society as a whole
• Shareholders and stakeholders


  shareholders are people who have shares of money in business and the priority of a business should be to make profit for shareholders

  
  

  Stakeholder people who have something at stake we are at stake of our education
• Hypocritical window dressing


  A way to cover up greed to make a company look good not the reality of a brand
• External Stakeholders


  Customers who want the business to produce quality products for reasonable prices
• Internal stakeholders


  Owners who are interested in how much profit the business makes
• Consumers


  Consumers are crucial to the change in business and how they run e.g. Nike and gap use child labour now the factories are monitored would they have changed this without being caught? Shows extrinsic motivation.
• Whistleblowers


  someone who risks their livelihood to tell the truth about companies to hold them accountable serves public interest

  
  

  Edward Snowden case in America worked for security agency and protected valuable information. He revealed this but in doing so leaked more information.
• Globalisation


  means companies becoming worldwide E.G.McDonald's

  Most common countries that businesses move production to our India, Bangladesh, Turkey, and Ethiopia as there is no minimum wage and people can be given bad working in conditions unethical
• Justification for globalisation


  The company owners say they are giving jobs to poor communities and training local people to have new skills and consumers are happy with cheaper clothing
• Issues with globalisation


  It keeps poor communities, poor and rich big communities rich it involves child labour
• sweat shops


  2013 in Bangladesh factory collapse 1100 people died in 2500 injured. It was an 80 story building that needed to be shut due to cracks but offices ordered them to return and it was found that the upper stories were built without permits resulting in 30 million in compensation, which is another extrinsic value.
• kantian


  whistleblowing - importance of honesty and promised keeping but what about promises made by the employers to the company?

  Globalisation - using countries with fewer human rights as a means to a cheaper labour is wrong

  Can't universalise exploiting every nation and person, no good will and duty
• Utilitarianism

  might resist whistleblowing depending on the severity of the case need to wake up good and harm

  Globalisation greatest good for greatest number western goods at low price equals a positive act as your minimising pain for the majority

  Peter Singer says we should focus on minimising pain rather than maximising pleasure people feel the same pain not all feel the same pleasure
• Will Hutton

  argued for the Stakeholder Theory: all stakeholders should actually have shares in a business – puts certain pressure on business.
• Adam Smith


  Invisible Hand Theory: suggests that businesses often have little control over what happens in the market place, and are “led by an invisible hand”.
• Louis Pojman


  self-interest is not selfishness, because by putting your company first, you are helping to serve the common good of others (ethical egoism) – “we are concerned to promote our own good, but not necessarily at any cost.”
• Utilitarian response to Ford Pinto case study

  Ford only considered the cost to the company. A customer dying would have effects lasting for years (duration) and would lead to friends and family suffering (purity) – need to consider all consequences.
• Kantian Response to Ford pinto

  Ford put a value on human lives – treated customers as a means to an end.
• Case study: Edward Snowden - whistleblowing


  employee of the National Security Agency in the US. He told American and British newspapers that the NSA was routinely monitoring the communications of millions of ordinary citizens in the US, UK and many other countries, without their consent or knowledge
• whistle-blowers are protected by law: The Public Interest Disclosure Act 1998 – they are treated as witnesses so they are not required to provide evidence of what they are reporting
• Good business


  Doing the right thing is doing the most profitable thing. A business behaving ethically creates a better image to the consumers, which results in greater profit

  Higher trade costs – sourcing from a Fairtrade supplier will always cost more than always going for the lowest cost price.  Higher overheads because a business will have to include training and communication of its ethical policy to its work force

  e.g Google
• Kantian response to good ethics

  Categorical imperative would clarify for a business what actions are and not permissible. Third maxim requires that a business acts only in ways that would seem acceptable by everyone
• Utilitarian approach to good ethics

  Puts utility at the centre of the moral decision. Act utilitarian may conclude that anything is permissible if it increases pleasure for the greatest number. Rule utilitarian would be concerned about the behaviour of the businesses and be prepared to restrict the conduct – e.g. zerohours contract would cause more pain than pleasure.
• Body Shop

  • Fairtrade - stakeholders are treated with equity
  • Over 70% of products have at least 1 Fairtrade ingredient in
  • Aim to regenerate 75millionm$^2$ of damaged habitats
  • Don't damage environment with pesticides
• PG&E Case study

  • Erin Brockovich accused PG&E of contaminating their water with hexavalent chromium
  • They were, they said it was to prevent corrosion in the cooling tanks and that the chemical was found in multivitamins
  • Hexavalent chromium is a carcinogen and contaminated the groundwater, damaging plants around it
  • Waste water from the cooling tanks was also dumped into unlined ponds at the site
• Kant - *Groundworks...*

  "Act only according to that maxim whereby at the same time it will become a universal law"

  The principle of universalisability indicates that the shareholders must treat stakeholders with respect. Rana Plaza did not do this, but the Body Shop does.
• Bentham - *Utilitarianism*

  "Greatest good for the greatest number"

  Could apply to the stakeholders if they are the greatest number because Friedman stated that "the purpose of a business is to make me money".

  However, in Snowden's case, the greatest good was society itself and their right to privacy. So whistleblowing was the greatest good
• E. Anscombe - *Intention*

  "Ethics is not about getting our desires fulfilled, but about living a moral life that follows the right principles"

  For Kant, capitalist exploitation that also causes harm (e.g Ford Pinto) is unethical under the categorical imperative as they were treated as a means to an end
• M. Sandel - *Justice..."

  "Justice is not simply a matter of maximising welfare, or of respecting individual rights, but of asking how we should live together"

  CSR is vital to making an action ethical. Kant's principle of universalisability would argue that Pacific Gas & Electric Company's refusal to take accountability for contaminating the water with hexavalent chromium was unethical as the prima facie duty of fidelity was not upheld.
• Jeffrey Sachs says that, as a result of globalisation, the number of extremely poor people in India has reduced by 200 million and by 300 million in China (The End of Poverty, 2005)
• Case study: Whistleblowing Karen Silkwood

  • Silkwood testified to Atomic Energy Commission that she found health and safety violations within the nuclear plant facility including leaks and spills and enough missing plutonium to make multiple nuclear weapons