Business ethics covers the moral 'rights' and 'wrongs' of business decisions.
Most large businesses will have an ethical code of behaviour or a mission statement which contains ethical principles.
Google drops 'Don't be Evil'. Details here.
Specific ethical issues:
The environment:
Should a business go further than the law suggests?
Should environmental standards be maintained in all the countries a business operates in?
Animal rights:
Should pharmaceutical companies test drugs on animals?
Should companies avoid damaging animal and plant life?
Workers in developing countries:
Corruption:
Is it right to use bribes even if a business knows that its competitors do?
Anti bribery law. Details here.
Click on the logo:
New technologies:
Is nuclear power acceptable?
Genetically modified crops?
Cloning?
Many businesses will have ethical codes of practice.
Explicit ethical objectives:
We will not test products on animals.
We will not accept or pay bribes.......
Implicit ethical objectives:
'Treating customers fairly'.
This would be part of the corporate culture of the organisation.
Corporate Social Responsibility (CSR)
This is an acknowledgement of responsibilities to all stakeholders not just shareholders.
CSR reports should be backed up with independent audits - although there are no minimum standards.
What should be audited?
Employment standards.
Human rights.
The impact on local communities.
Business integrity and ethics.
Product responsibility.
The environment.
Foxconn and Social Auditing. Details here.
https://youtu.be/TmLsV9cSk0o
Pay and rewards (remuneration):
Businesses use pay and rewards for different reasons.
To attract employees with the right skills, experience and knowledge.
To reward and motivate existing staff.
Motivated staff are likely to be productive staff.
Some companies have been accused of excessive executive pay (directors, the CEO or Chairman).
Click on the headline:
Highest paid female chief executive. Details here.
Some employers have been accused of only paying the minimum wage.
Is this ethical?
Should companies pay such low wages that employees have to rely on tax credits?
Some companies classify employees as self employed to avoid the minimum wage.
Uber. Click on the picture.
Some businesses pay a 'Living Wage'.
Do you know what this means?
Details here.
Trade-offs between profit and ethics.
Is there is a conflict between profit maximisation and acting ethically?
A trade off occurs when the selection of one course of action leads to a negative impact on another course of action.
https://youtu.be/TmLsV9cSk0o
Pay and rewards (remuneration):
Businesses use pay and rewards for different reasons.
To attract employees with the right skills, experience and knowledge.
To reward and motivate existing staff.
Motivated staff are likely to be productive staff.
Some companies have been accused of excessive executive pay (directors, the CEO or Chairman).
Click on the headline:
Highest paid female chief executive. Details here.
Some employers have been accused of only paying the minimum wage.
Is this ethical?
Should companies pay such low wages that employees have to rely on tax credits?
Some companies classify employees as self employed to avoid the minimum wage.
Uber. Click on the picture.
Some businesses pay a 'Living Wage'.
Do you know what this means?
Details here.
Trade-offs between profit and ethics.
Is there is a conflict between profit maximisation and acting ethically?
A trade off occurs when the selection of one course of action leads to a negative impact on another course of action.
Acting ethically can raise costs.
Acting ethically can reduce revenues:
Refusing to give bribes may lose the business income.
Not using GM crops may give a competitor an advantage.
However acting ethically can produce benefits:
Some customers view ethical behaviour as being a USP.
Having a CSR approach to business can act as an insurance policy against possible future problems.
What do you think this means?
