Business brief: Unit 6 (Ethics)
Business ethics is a module taught at many business schools - MBA students discuss ethical issues
to prepare them for the dilemmas they will face when they return to corporate life. Corporate social
responsibility, or CSR, is the name increasingly used by companies to talk about their efforts to do
'the right thing' both locally and as global citizens.
A brand's value nowadays may not just be about profit and loss, but also accountability - for
example, being able to demonstrate clearly a product's sourcing: where and how it was made.
Companies produce social audits to talk about their performance in relation to all their stakeholders
- not only suppliers, but all employees, customers, suppliers, shareholders and the countries where
they operate as a whole. (In stakeholder theory, shareholders are just one of the many interested
parties.)
These reports are designed to reassure everyone that companies are behaving ethically in
everything from working conditions and labour practices to their environmental impact, not only
of factories but also of warehouses and offices. Another aspect is the effect of companies' products
in terms not only of the sourcing of the materials and parts put into them, but their impact when in
use and the degree to which materials used to make them can be recycled when they are replaced.
Companies talk increasingly about minimising their carbon footprint - the amount of carbon
dioxide emitted by all their activities and products - as part of the effort to combat global warming.
This is all part of companies' efforts to underline their sustainability - the idea that their activities
can continue indefinitely without causing harm -and transparency - the idea that they have nothing
to hide. (Sceptics may describe efforts to hide or relativise the environmental impact of a
company's activities as greenwash.)
Pressure from consumers is causing companies to be increasingly transparent about labour
practices. Clothing companies are keen to demonstrate that their suppliers in developing countries
do not use sweatshop labour or child labour. Multinationals argue that they have an interest in
making working conditions at overseas suppliers a model for others to follow. They point out that
conditions at their suppliers are often better than at local suppliers, who do not work with the
outside world.
As in so many areas, the Internet is having an impact — people can see local conditions for
themselves by looking at videos shot in local factories or industrial sites, sometimes clandestinely.
Consumer activists unhappy about a company's behaviour may hack into its websites or cause
them to crash in denial of service (DOS) attacks, where a company's website is overloaded with
traffic. Activists who carry out these attacks are called, informally, hacktivists.
Business ethics and your students
In-work students will often be able to talk about the sustainability of their company's products or
services, labour conditions, ethical manufacturing and purchasing, the effect of their company's
products/services on society and the environment, the company's financial and non-financial
reports and contribution, or lack of contribution, to CSR. (But be careful not to alienate students
by 'egging them on' to criticise their companies' efforts or lack of them in this area, and in most
organisations, even small ones, do not expect them to know all the details of operations that are a
long way from their own responsibilities.)
Pre-work students may have experience of labour conditions and environmental impacts when
working for companies on work placements or as part-time or temporary employees. Pre-work
students may also be more aware than in-work students regarding issues such as (un)ethical fashion
labels.
All students will have general world experience of buying (non-) ethical brands as consumers and
may discuss the importance of corporate social responsibility when creating a positive or negative
corporate image. They can also talk about whether companies should demonstrate greater
responsibility and accountability to stakeholders such as employees, the local community and
developing countries.