Overview
• What is business ethics?
• Why is business ethics important?
• Globalization: a key context for business ethics? • Sustainability: a key goal for business ethics?
What is business ethics?
Develop your own definition of business ethics; don’t use the words right or wrong. Business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed. Business ethics is beyond the law.
How BE differs from other courses
• Unlike classes in accounting, finance, engineering, or law, BE rarely has a direct right or wrong answer.
• This makes some students uncomfortable, but that’s a good thing.
• You need to form your own opinion of what
BE means to you, and act correspondingly.
Defining morality, ethics and ethical theory • Morality is concerned with the norms, values and beliefs embedded in social processes which define right and wrong for an individual or a community.
• Ethics is concerned with the study of morality and the application of reason to elucidate specific rules and principles that determine right and wrong for any given situation.
• These rules and principles are called ethical theories. The relationship between morality, ethics and ethical theory
Morality
…that can be applied to any situation. … to produce ethical theory …
Ethics rationalizes morality …
Ethics
Ethical theory Potential solutions to ethical problems
Why is business ethics important?
Power and influence of business in society
Potential to provide major contribution to society
Potential to inflict harm
Increasing demands from stakeholders
Lack of business ethics education or training
Continued occurrence of ethical infractions
Evaluating different ways of managing business ethics 8. Interesting and rewarding
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What is globalization?
• Globalization is: a process which diminishes the necessity of a common and shared territorial basis for social, economic, and political activities, processes, and relations.
– ‘deterritorialization’-the abandonment of borders
– A rising tide lifts all boats
Relevance of globalization for business ethics
• Cultural issues: when in Rome do as the
Romans do?
• Legal issues: Walmart
• Accountability issues: So many people can be impacted. Eg., child labour
Ethical impacts of globalization
Stakeholders
Shareholders
Employees
Ethical impacts of globalization
Globalization provides potential for greater profitability, but also greater risks. Lack of regulation of global capital markets, leading to additional financial risks and instability.
Corporations outsource production to developing countries in order to reduce costs in global marketplace - this provides jobs but also raises the potential for exploitation of employees through poor working conditions.
Consumers
Global products provide social benefits to consumers across the globe, but may also meet protests about cultural imperialism and westernization. Globalization can bring cheaper prices to customers, but vulnerable consumers in developing countries may also face the possibility of exploitation by MNCs.
Suppliers & competitors Suppliers in developing countries face regulation from MNCs through supply chain management. Small scale indigenous competitors exposed to powerful global players.
Civil society
(NGOs, etc)
Global business activities brings the company in direct interaction to local communities with possibility for
