business ethics

• This topic is about the relationship between capitalism and ethics. It is about whether businesses should be required to follow ethical principles in their dealings, or whether ethics even has or should have any relevance to business at all.
• The idea that good ethics is good business

  Good business decisions are good ethical decisions
• Views on the relationship between business and ethics

  • Proponents of CSR argue that good ethics is good business
  • Utilitarians and Kantians believe there should be some restrictions on business
  • Libertarians economists like Milton Friedman think business and ethics have nothing to do with each other
• Corporate social responsibility (CSR)

  The theory that a business has ethical responsibilities to towards the environment and the communities it is part of or affects
• Types of CSR

  • Environmental CSR
  • Community CSR
• Environmental CSR

  • Reducing negative impact on the environment such as pollution and non-recycled products
  • Increasing the reliance on 'green' renewable and sustainable energy and products
  • Offsetting negative impact done to the environment
• Community CSR

  • Respecting human rights and avoiding exploitation
  • Responsible treatment of employees
  • Philanthropy
• ESG (Environmental, social and governance)

  A more contemporary version of CSR that adds the requirement of avoiding political corruption such as bribery
• CSR/ESG

  Allows a business to maximise its profits by minimising risks of regulation and improving public relations
• Utilitarianism on CSR

  They would likely accept environmental CSR but reject community CSR like philanthropy as a responsibility of business
• Kantian ethics on CSR

  Requires that market interactions do not involve the treatment of people as mere means, and includes avoiding exploitation, providing safe work environment, avoiding fraud or deceptive advertising, and avoiding environmental damage
• Examples of CSR


  • Innocent smoothie donating 10% of profits to charity
  • Pret-a-manger giving away leftover food to charity
• CSR is typically a centrist or centre-left position, and those further left often regard it as hypocritical window dressing
• Globalisation is the phenomenon where businesses are now global entities spanning multiple countries and continents and its impact on stakeholders
• Problems with globalisation


  • It can cause the violation of corporate social responsibilities
  • It can undermine the free market itself
• Examples of globalisation issues

  • Offshore outsourcing
  • The issue of monopolies
• Even Friedman accepted that "It's always been true that a business is not a friend of a free market"
• Utilitarianism on globalisation


  They would be against aspects of globalisation which undermine free markets, but might accept offshore outsourcing if it maximises happiness
• Kant on globalisation


  Globalisation seems problematic as it can cause violations of corporate social responsibilities
• Whistleblowing


  When someone, usually an employee, leaks information about the wrongdoings of a company
• Utilitarianism on whistleblowing

  Whistleblowing is morally right if it causes more happiness than not whistleblowing
• Kant on whistleblowing

  Lying cannot be universalised and is therefore always wrong, so Kant would be against lying to cover up negative business practices. He would also see exploitation of people as a mere means as wrong.
• Sweatshops are a classic case of exploitation, where workers, sometimes children, are employed for very low pay, long hours in unsafe conditions
• Sweatshops

  Relevant to CSR, globalisation and whistleblowing
• Utilitarian defence of sweatshops

  Although sweatshops are horrific, they may provide the best economic opportunity available to workers in very poor countries, so boycotting them could do more harm than good
• Kantian ethics would be against sweatshops regardless of their positive consequences, because they treat workers as a mere means
• Mill's harm principle suggests that society will be happiest if the rule of not harming others is followed, so the question is whether exploitation counts as harm
• In developed countries people are happy at having products for a lower price
• A Utilitarian would therefore be in favour of this effect of globalisation, against CSR and against whistleblowing
• Utilitarianism justifies bad actions

  e.g. exploitation
• Utilitarianism is incompatible with the basis for human rights which are deontological
• Right


  Something which must be respected regardless of the consequences
• The idea of human rights was strongly influenced by Kant's formula of humanity
• Mill's harm principle


  Suggests that society will be happiest if the rule of not harming others is followed
• So long as the workers are free to leave any time, technically they accept the risk of harm in the sweatshop because their risk of harm from starvation without the sweatshop is greater
• Arguably sweatshops, except in particular circumstances, do not count as harm, therefore sweatshops are permissible
• Perhaps it's not permissible for children to work in them though
• The Bangladesh factory case study might be something Mill would prohibit too, since it threatened to withhold pay if people didn't work, which is borderline forced-labour
• A factory in Bangladesh evacuated because of health and safety concerns, however it then said it would not pay its employees for a month if they didn't return the next day. So the employees returned, and the next day the factory collapsed on them killing over a thousand of them
• Kant famously said he would not value consequences even when life was at stake – claiming that lying even to save a life is wrong