What is the business ethics (and why study it)



What is the business ethics (and why study it)

Ethics - general branch of philosophy that analyzes moral issues (good /evil, right / wrong).

Examples:

• How can we justify the adoption of certain values or moral standards compared to others?

• How do moral beliefs differ in relation to subjective preferences or tastes?

• To what extent are beliefs and moral obligations influenced by society and culture?

Universalism vs. moral relativism.

Are moral norms and practices relative to their socio-cultural context? We see a lot of diversity, but also convergence. The universality (in time and space) of moral behavior. Any human society or culture in any era, has developed standards, values and moral practices.

Discussion: examples of different values or moral standards to different cultures and eras.

Universals: the golden rule, reciprocity, politeness.

Terminological distinctions

Morality

The values, norms, attitudes and behaviors considered morally preferable. In comparison with legal norms, moral standards are not necessarily codified, are not mandatory and there is no authority to enforce or punish those who ignore them.

Ethics

The study of morality: how moral norms and values operate at individual and collective level and their role in human behavior and cognition.

Applied ethics

The analysis of moral problems, applied to specialized areas: occupational areas, types of activities, scientific domains etc.

Environmental ethics, business ethics, medical ethics, ethics of public relations, etc..

Business Ethics

Andrew Crane and Dirk Matten: „Business ethics is the study of business situations, activities and decisions which which have to do with what is right or wrong” (Crane & Matten, 2004, p. 8)

Laura Nash: „Business ethics is the study of how personal moral norms are applied to the activities and aims of commercial companies. It is not a separate moral standard, but the study of how the business context raises specific issues for the moral person.” (Nash, 1995, p. 5)

A specialized study of moral right and wrong, focused on the moral standards and practices of business actors (individuals, SMEs, corporations).

The development of business ethics was influenced by:

• The diminishing influence of state – administrative decentralisation and privatisation. Semi-private or private companies which take over are faced with a responsibility issue: should they assume, along with control, some social responsibility regarding not only the employees but the local, regional or national community?

• Globalisation – businesses take place in a global, dynamic and intercultural environment, they are no longer confined to regional or national communities

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Examples of business situations, activities, behaviors that entail moral choices. How are they dealt with and what type of solutions are brought forward?

1

A chemical plant is constantly polluting a nearby river with toxic reziduals. The quality of water is compromised and several towns and villages in the area are complaining. A governmental agency who monitors the environment impact of industrial activities has fined the plant several times, for failing to adopt a more environmentally friendly production process. Nevertheless, the plant management keeps on polluting the river for a very simple reason: it is cheaper to pay the fines than to invest in a system for neutralizing and recycling the rezidual substances. When face with the prospect of having to suspend their activity until they make some changes, they pretend that the cost of such an investment will have to be offset by firing several dozens of employees. These are rezidents of the very same towns and villages which are affected by the polluted river.

2

A steelworks company has been recently privatised. The employees are unhappy with the new private management, so they are demanding new negotiations in order to obtain better contractual terms. The management doesn’t respond, so they decide to go on strike. Still, a few days pass by and they have no word from the director. This enrages the crowd and the employees spontaneously decide to block off a highway that passes nearby the steelworks. Their action affects directly or indirectly tens of thousands of people (by disrupting the normal functioning of businesses, schools and hospitals, by obliging lots of people to change their route etc).

3

You have been recently hired by a company on very favourable terms (financial and other). However, your contract includes a clause which makes it compulsory to report any alleged illegal activity that you might notice. At a certain point in time, you began to suspect that you best office buddy is using false financial documents in order to pocket company money... What are you supposed to do?

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But why should we study moral choices in business, if so many business practices seem to ignore or disobey moral standards. Business and morality are mutually exclusive?

Not at all. The fact that some business people ignore the moral component of their decisions and activities doesn’t change the moral nature of those activities. You can run, but you can’t hide from the fact that all of us are bound to make moral choices. We have to - by the simple fact that we are part of society and our decisions and actions have consequences (on ourselves and on others).

Relativity of ethical values and standards? Discussion. Personal vs subjective.The moral argument.

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