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.