Business Ethics
Milton Friedman believed businesses have no responsibility other than to make
profit. “The business of business is profits”
Usury:
• the practice of lending money at unreasonably high rates of interest
• many holy books condemn usury - it’s a sin
• involves making money by use of immoral loans
• performing usury is vilified by society.
• We can use this to say historically that business had some form of morality.
Britain, 1700-1800 - Industrial Revolution:
• employment conditions unchecked
• workers without rights, no way to change this —> they were expendable
• slow improvements over next 100 years - rescinded discriminating policies
eg no poc. Earl of Shaftesbury fought child labour, 1790 Equal Pay Act.
• rights about unfair dismissal came after 1971
Were these changes to make things more equal?
• 1889 Great Dock Strike - no guarantee of work each day, selected hours. An
effective trade union was created, workers were a united force.
• The papacy advocated workers rights since 1891.
• CSR:
Corporate Social Responsibility (CSR): the corporation has an ethical
responsibility to the wider community as well as conducting its own conduct.
Applies to the whole corporation, not just individuals inside it.
CSR sees people as: stakeholders = individuals and groups directly affected by
activities of a business.
Eg. customer, supplier, employees and shareholders. Anyone who has an
interest in the company is a stakeholder.
We might not take part it a situation, but it does affect us:
• Businesses now encouraged to take a stake holding approach to their work -
One cannot act in the belief that only they are affected.
• Society functions on a number of key factors, if some don’t work our society
can’t function orderly anymore.
Pyramid (1-4 = the top to the base)
1. Philanthropic responsibilities: Be a good corporate citizen, Contribute
resources to community
2. Ethical responsibilities: Be ethical. Obligation to do what’s right. Just
and fair.
3. Legal responsibilities: Obey the law. Law is society’s codification of
right and wrong.
4. Economic responsibilities: Be profitable. The foundation on which all
others are built.
, Aristotle - Communal Ethics:
• Community’s success should always be the priority, NOT individual’s
happiness/goodness, though these are encouraged.
• Community/ Polis (according to Aristotle - ideas of ancient Greece), is tied
together by friendship, mutual dependency and service. Aristotle: our ethics
should be based around communal values, just like CSR.
• Polis becomes the workplace, each with a community, people inside have am
usual dependency and do services for one another.
• “The whole is greater than the sum of its parts” basically his justification for
slavery :p
Principles for Good Business:
• In ‘A Blueprint for Better Business?’ - Cardinal Vincent Nichols (catholic) gives
these principles:
• Human Dignity - Each person can never be merely an instrument valued just for
their usefulness
• The Common Good - the set of social conditions which allow people to develop
individually and communally
5. Solidarity - no man is an island and no business is either
• Subsidiarity - Decisions should be made at lowest level of compatibility. Eg
village issues dealt with by village, national issues by central government. Eg
Apple wouldn't try to compete with small tech businesses.
• Fraternity - Fellowship towards those of different cultures.
• Reciprocity - Not giving what we MUST, but being generous.
• Sustainability - Duty to future generations.
Ethical Businesses Make Good Businesses:
• Dame Anita Roddick - founder of the body shop “Being good is good business”
• Robert Solomon: “Trust opens up new and unimagined possibility” +
“Productivity and serving the public and taking care of one’s own employees are
neither means or an afterthought of business rather its very essence.”
• Solomon does not see a contradiction between good values in business and being
successful
• —> The idea is that we trust companies and individuals to go back to them if they
behave fairly. Whereas few people return to unethical businesses.
• BUT evidence shows this isn’t true - as many companies emerge fairly unaffected
after scandals.
Hypothetical window dressing:
• How businesses ought to behave and do behave are normally very different.
• It is difficult to separate what is ethical for the business and what’s ethical for its
own sake
Milton Friedman believed businesses have no responsibility other than to make
profit. “The business of business is profits”
Usury:
• the practice of lending money at unreasonably high rates of interest
• many holy books condemn usury - it’s a sin
• involves making money by use of immoral loans
• performing usury is vilified by society.
• We can use this to say historically that business had some form of morality.
Britain, 1700-1800 - Industrial Revolution:
• employment conditions unchecked
• workers without rights, no way to change this —> they were expendable
• slow improvements over next 100 years - rescinded discriminating policies
eg no poc. Earl of Shaftesbury fought child labour, 1790 Equal Pay Act.
• rights about unfair dismissal came after 1971
Were these changes to make things more equal?
• 1889 Great Dock Strike - no guarantee of work each day, selected hours. An
effective trade union was created, workers were a united force.
• The papacy advocated workers rights since 1891.
• CSR:
Corporate Social Responsibility (CSR): the corporation has an ethical
responsibility to the wider community as well as conducting its own conduct.
Applies to the whole corporation, not just individuals inside it.
CSR sees people as: stakeholders = individuals and groups directly affected by
activities of a business.
Eg. customer, supplier, employees and shareholders. Anyone who has an
interest in the company is a stakeholder.
We might not take part it a situation, but it does affect us:
• Businesses now encouraged to take a stake holding approach to their work -
One cannot act in the belief that only they are affected.
• Society functions on a number of key factors, if some don’t work our society
can’t function orderly anymore.
Pyramid (1-4 = the top to the base)
1. Philanthropic responsibilities: Be a good corporate citizen, Contribute
resources to community
2. Ethical responsibilities: Be ethical. Obligation to do what’s right. Just
and fair.
3. Legal responsibilities: Obey the law. Law is society’s codification of
right and wrong.
4. Economic responsibilities: Be profitable. The foundation on which all
others are built.
, Aristotle - Communal Ethics:
• Community’s success should always be the priority, NOT individual’s
happiness/goodness, though these are encouraged.
• Community/ Polis (according to Aristotle - ideas of ancient Greece), is tied
together by friendship, mutual dependency and service. Aristotle: our ethics
should be based around communal values, just like CSR.
• Polis becomes the workplace, each with a community, people inside have am
usual dependency and do services for one another.
• “The whole is greater than the sum of its parts” basically his justification for
slavery :p
Principles for Good Business:
• In ‘A Blueprint for Better Business?’ - Cardinal Vincent Nichols (catholic) gives
these principles:
• Human Dignity - Each person can never be merely an instrument valued just for
their usefulness
• The Common Good - the set of social conditions which allow people to develop
individually and communally
5. Solidarity - no man is an island and no business is either
• Subsidiarity - Decisions should be made at lowest level of compatibility. Eg
village issues dealt with by village, national issues by central government. Eg
Apple wouldn't try to compete with small tech businesses.
• Fraternity - Fellowship towards those of different cultures.
• Reciprocity - Not giving what we MUST, but being generous.
• Sustainability - Duty to future generations.
Ethical Businesses Make Good Businesses:
• Dame Anita Roddick - founder of the body shop “Being good is good business”
• Robert Solomon: “Trust opens up new and unimagined possibility” +
“Productivity and serving the public and taking care of one’s own employees are
neither means or an afterthought of business rather its very essence.”
• Solomon does not see a contradiction between good values in business and being
successful
• —> The idea is that we trust companies and individuals to go back to them if they
behave fairly. Whereas few people return to unethical businesses.
• BUT evidence shows this isn’t true - as many companies emerge fairly unaffected
after scandals.
Hypothetical window dressing:
• How businesses ought to behave and do behave are normally very different.
• It is difficult to separate what is ethical for the business and what’s ethical for its
own sake
