Buisness

• Corporate social responsibility


  The idea that a business has a responsibility towards the community and the environment, beyond simply maximizing profits
• Responsibilities businesses have


  • Economic responsibility - to remain profitable
  • Legal responsibility - to obey the law
  • Ethical responsibility - to not only follow the law, but also do what is ethically and morally right
• Milton Friedman's view


  There is one and only one social responsibility of business... to increase its profits so long as it stays within the rules of the game
• Free-market economy


  • Prices, wages and all other aspects of business are determined by the laws of supply and demand, with minimal governmental interference
  • The role of the government is simply to uphold honest dealing, enforcing contracts
  • Supporters claim it respects human autonomy and freedom and brings the greatest material benefits to consumers
• Friedman argued that making social improvements in society is the responsibility of democratically elected politicians, not business executives
• Friedman argued that the business executive's responsibility is to 'make as much money as possible' within the law
• Friedman argued that when companies appear to be acting ethically and promote themselves as such, it is most likely because doing so is in their self-interest
• Friedman argued that underlying the view that businesses have a corporate social responsibility is the belief that 'the pursuit of profits is wicked and immoral'
• Friedman argued that the pursuit of profits is not at all immoral, as long as it is within the law
• Stakeholders


  Those affected by or involved with the business, including primary stakeholders (executive, shareholder, employees, customers) and secondary stakeholders (local community, suppliers, competitors)
• Obligations and pressures from stakeholders


  May mean businesses are obliged to act more ethically even when they are not required to do so by law
• Kantian ethics


  • Deontological, duty, the good will, motive, honest shopkeeper, categorical imperative - principle of universalisation, principle of humanity, principle of the kingdom of ends
  • You do what is right because it is right and for no other reason
  • The only motive truly moral is doing one's duty - this is the good will that 'shines forth like a jewel'
• Kant would argue that if the motive behind corporate social responsibility is self-interest, as Friedman suggests, then it is not a truly moral action
• Kantian approach


  • Principle of universalisation - can the business decision be universalised?
  • Principle of humanity - does it respect humans as rational and autonomous beings, treating them as ends, not means?
  • Principle of the kingdom of ends - act as though you were a law abiding member of like-minded individuals
• Kant's approach faces criticisms that it is unrealistic and too idealistic in a free-market economy
• Utilitarianism - Bentham


  • Psychological hedonism to ethical hedonism, Act utilitarianism - principle of utility applies to each action, consequentialist, quantitative - hedonic calculus, egalitarian - 'each to count for one'
  • The greatest happiness of the greatest number is the foundation of morals and legislation
• Bentham's quantitative approach to ethics fits well with the cost/benefit approach businesses have when making decisions
• Bentham's egalitarian principle that each is to count for one and none for more than one is impractical and time-consuming to apply in business decisions
• Utilitarianism - Mill


  • Consequentialist, hedonist, Rule utilitarian - principle of utility applies to each rule, 'leave it to the competent judge' (brings about the greatest quantity of higher pleasures), happiness not pleasure, qualitative - higher and lower pleasures
  • Actions are right in the proportion they tend to promote happiness
• Mill would argue that in any ethical decision we should follow the rule that maximizes utility
• Mill would disagree with Kant's view that the motive is the key to the morality of an action, arguing that the motive is not morally significant
• Mill: 'Actions are right in the proportion they tend to promote happiness'
• Mill's view

  In any ethical decision we should follow the rule that maximizes utility
• Strength of Mill's view


  • Consequences are more important than motives
  • Good compromise between deontological and consequentialist approaches
• Whistle blowing is when an employee discloses wronging to the employer or public
• Whistle blowers


  • Edward Snowden
  • Jeffrey Wigand
• Legal protection for whistleblowers


  • In the US, the Whistleblower Protection Act protects government employees
  • In the UK, the Public Interest Disclosure Act protects whistleblowers and gives them legal status as witnesses
• Arguments against whistle-blowing

  • Breach of contract and loyalty
  • May harm primary stakeholders
• Arguments in favor of whistle-blowing

  • Duty to tell the truth and prevent harm is more important than duty of confidentiality or loyalty
  • Internal reporting may be ignored or retaliated against
• Kantian perspective on whistle-blowing

  • Supports whistle-blowing based on the principle of universalization, principle of humanity, and principle of the kingdom of ends
  • Motive matters - whistle-blowing out of duty is moral
• Bentham's utilitarianism


  Apply the hedonic calculus to determine which action brings about the greatest pleasure and least suffering
• Mill's utilitarianism

  Follow the rule that brings about the greatest happiness for the greatest number
• Globalisation is the integration of economies, business, industries and markets across the world
• Globalisation has rapidly increased since the 1990s with the emergence of the Internet and improved transportation systems
• Friedman's perspective


  A free-market economy brings the best benefits to the largest amount of people with minimal governmental interference and regulation
• The ethics of globalisation are complex
• In 2013 a poorly made clothing factory in Bangladesh called the Rana Plaza collapsed, killing over 1100 people
• Free-market economy


  Brings the best benefits to the largest amount of people with minimal governmental interference and regulation
• The global economy will grow and the benefits will trickle down to everyone in society with a free-market economy
• Friedman's view


  The sole responsibility of businesses is to 'increase profits... within the rules of the game'