Business ethics

• Friedman

  • Argued against the idea that businesses have social responsibilities to improve their workers lives or help communities cooperate in.
  • The only social responsibility a business has is to increase their profit.
  • The idea that businesses have social responsibilities made capitalism less effective.
  • Believes that whilst individuals int heir own time may choose to take on social responsibility and do charitable things, as employees they must serve the cooperation of the company which doesn't have any responsibilities but to be competitive.
• Dawkins

  • Applies the survival of the fittest principle to the market to ensure the best of all possible outcomes.
  • He equates being the fittest as being a corporation with the highest return to shareholders.
  • Like many business owners, Friedman sees profit as the motive of a business and business survival, for this competition needs to be increased.
• Limited liability companies

  • Limited liability companies are companies established to make maximum amount of profit.
  • They must act in the interest of shareholders.
  • Limited liability companies do not want to pay for environmental damage, as it will have a negative impact on profits.
• Relationship between business and employees

  • Businesses need to keep employees motivated and make profit.
  • This means the employees gets the best working conditions and good pat.
  • Employee happiness is important as if employees are unhappy, it leads to a high turnover of staff which decreases productivity, increased recruitment costs and profit loss from the amount of time spent training employees.
• Whistleblowing - ethical

  • When a employee decides to make public their belief that a business is acting unethically
  • If a business encourages whistleblowing it shows they have nothing to hide and the business is operating well with more than just the purpose of profit.
  • Whistleblowers in the UK are treated as witnesses, meaning they don't need to provide evidence themselves and so are protected by the law and kept anonymous.
  • Ability to whistleblow builds trust with employees and employers, creating a more stable and reliable workforce who are willing to share goals with the business.
• Whistleblowing - unethical

  • Some whistleblowers themselves can be seen as unethical.
  • For example, when they bring the business into disrepute and could have handled the problem more discreetly.
  • Or if only one side of the story is presented.
• The development of business ethics in Britain

  • The Industrial Revolution led to millions employed in unhygienic conditions, working with dangerous machinery and having no workers rights.
  • Efforts to improve Britain include the equal pay act and the Catholic Church's 'Workers Charter' which condemned capitalism.
• Corporate social responsibility

  • This is the principle that a business has a responsibility towards the community and environment.
  • Environmentally this includes reducing negative impact on the environment such as pollution and non recycled products, increasing the reliance of sustainable energy.
  • In the community this includes respecting human rights and avoiding exploitation and responsible treatment of employees.
• Globalisation

  • Globalisation operate mostly in the interests of the richest countries, which continue to dominate world trade at the expense of developing countries.
  • LECD produce cheap labour and raw materials to the the North and the West.
  • If it becomes cheaper to operate in another country, the business might close dean the factory and make local people redundant
  • Threatens cultural diversity
  • Seen to discourage the pursuit of ethics through underpaid workers, poor conditions, little health and safety measures
  • Seems that the interests of shareholders is more important than the employees.
• Good ethics = good business

  • Honesty is good for a business, it builds trust with customers, and makes them more likely to return.
  • A company known for its integrity might be able to charge higher prices.
  • Fair treatments of employers builds tryst and confidence. A good business requires a stable workforce whoo are willing to share goals with the organisation.
  • A company using ethical materials demonstrates their global responsibilities.
  • Generally, customers prefer to buy from ethical businesses.
• Hypocritical window dressing (bad ethics = good business)

  • This cover the greed of business intent on making profits.
  • Many companies use corporate social responsibility purely as a gain to profit through false advertisement and less environmental ways.
  • Can be used for public relations purposes, to make business look good, regardless of whether the overall impact of the business is negative.
  • The appearance of having CSR is used to pacify the conscience of consumers.
  • Negative use of social responsibility leads to the viewpoint that profit is the only goal of the business.