Business Ethics

• Capitalism and ethics


  The relationship between businesses and ethical principles in their dealings
• Good ethics is good business


  Good business decisions are good ethical decisions
• Corporate social responsibility (CSR)


  • Proponents argue that good ethics is good business, because it's profitable to have a good public image and avoid government regulation
• Utilitarians and Kantians


  • Believe there should be some restrictions on business, as not all good business decisions which maximise profit will be ethically good if they go against the general happiness or violate duty
• Libertarian economists like Milton Friedman


  • Think business and ethics have nothing to do with each other, as businesses' only responsibility is to maximise profit which is ethically good because it is the result of freedom and enables economic growth
• Sub-issues in this topic


  • Corporate social responsibility
  • Globalisation
  • Whistleblowing
• Corporate social responsibility


  The idea that a business has responsibility to the environment and its community
• Globalisation


  The issue that businesses are now global entities, giving them tremendous power
• Whistleblowing


  The ethics around going public to reveal secret unethical business practices
• Corporate social responsibility (CSR)


  The theory that a business has ethical responsibilities 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 for example by donating to pro-environment groups that will make conservation efforts
• Community CSR


  • Respecting human rights and avoiding exploitation
  • Avoiding being supplied by any business which involves exploitation, sweatshops or child labour
  • Responsible treatment of employees e.g. minimum wage, health and safety provisions
  • Philanthropy. Donating money to charitable causes
• ESG (Environmental, social and governance)


  A more contemporary version of CSR that adds the requirement of avoiding political corruption such as bribery
• CSR and ESG is often promoted as a way of linking good business and good ethics
• If a business is discovered to have illegal environmental harm or human rights violations in its supply chain


  That can cause governments to step in and regulate it, which can be very bad for profit
• Committing to CSR/ESG


  Can allow a business to maximise its profits by minimising those risks and thus do well by doing good
• CSR as an opportunity for improved public relations (PR)


  The company appears better in the eyes of the public for the good that it does, which can be used as a selling point for advertising and increase profits
• Free market capitalism is the idea that the only responsibility of a business is to maximise profit for its shareholders
• Bentham and Mill think that the free market is generally the best way to maximise happiness
• Bentham and Mill would likely accept environmental CSR because of how damaging climate change can be to happiness
• Regarding community CSR, Bentham and Mill would probably reject philanthropy as a responsibility of business
• Bentham did favour some regulations for employees like minimum wage
• Bentham and Mill think the free market generally works for producing human flourishing and happiness, and would generally be against restrictions and responsibilities laid on business which would interfere with that
• Kantian ethics on CSR


  • Market interactions must 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
• Kantian ethics on CSR


  • Avoiding exploitation (community CSR)
  • Providing a safe work environment (community CSR)
  • Avoiding fraud or deceptive advertising (community CSR)
  • Avoiding polluting the environment or having a net negative impact on the environment (environmental CSR)
• Innocent smoothie


  • Gives 10% of all their profits to charity
• Pret-a-manger


  • Gave away their left over food to charities at the end of the day
• 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
• Encouraging a slightly healthier version of capitalism might make people feel less motivation to address the problems of capitalism or they might even be deceived that capitalism is not the cause of the problems to begin with
• Globalisation


  The phenomenon where businesses are now global entities spanning multiple countries and continents and its impact on stakeholders
• Anand Giridharadas: '"Jeff Bezos wants to start a school for kids whose families are underpaid by people like Jeff Bezos."'
• Corporate social responsibility is a sham, it's not businesses giving away their profits for the good of society, it is a cold calculation that it would be more profitable for them to give away a fraction of their profits in order to give a good impression of themselves to the public
• Globalisation


  • Economies, industries, markets, cultures and policymaking are integrated (connected) globally
• The amount 'given back' through CSR is nothing compared to the profits gained through avoiding taxes and busting unions
• The problem with globalisation


  It can cause the violation of corporate social responsibilities and even undermine the free market itself
• CSR can be done for public relations (PR) purposes, to make the business look good, regardless of whether the overall impact of the business is negative
• Becoming global entities has given businesses an unprecedented level of money, and money is power