Business Ethics

By Lyle ‘ Flaming Ego’ Anderton and Cameron ‘Scott Jenkins, Go Home’ Anstey

Definitions

• Business Ethics – Discusses the moral justification of economic systems and practices, the responsibilities of businesses and rights of workers.

• Capitalism – the idea that companies are privately owned (not owned by Government) and exist to make a profit e.g.- Tesco’s Exists to make money whereas NHS exists to serve the public and is not profit based at all.

Definitions

• Corporate Responsibility – Businesses have a responsibility to consider the interests of their customers and investors.

• Ethical Investment – Investment should only be made in businesses that trade Ethically, such as Fair Trade.

• Profit – Money Made after Sales, having taken away the costs involved.

Definitions

• Transnational Corporation – A Business that is registered and operates in more than one country (Coca Cola, Nestlé)

• Share Holders - People who invest money into the business in order for a return, usually more money.

• Stake Holders – Someone affected by, and therefore interested in, a Company.

• Consumers – people who buy from Businesses

Definitions

• Business Ethics – Discusses the moral justification of economic systems and practices, the responsibilities of businesses and rights of workers.

• Capitalism – the idea that companies are privately owned (not owned by Government) and exist to make a profit e.g.- Tesco’s Exists to make money whereas NHS exists to serve the public and is not profit based at all.

Definitions• Profit Motive – A concept saying that the whole point of a

business is to make profit, and without profit the investors, workers and owners will not gain anything.

• Henry Hazlitt – If two options use ‘X’ Resources, the one which produces most profit is the most efficient use of the resources. By always aiming to maximize profit, we ensure constant use of resources to their extent, that there are no wastes.

• Anyone holding an Egoistic Moral View would say that seeking maximum profits is not immoral, as seeking maximum self wealth is indeed moral.

• Karl Marx was incredibly against Profits, saying that they were clearly immoral as If you are making profit, then it is because you are not paying the worker the full worth of his work.

Sicko (2007)• Notorious Filmmaker Michael Moore created a feature length

documentary comparing the Profit-based, non-universal Healthcare of the US with the non-profit, universal Healthcare of Canada, the UK, France and Cuba.

• A significant part of his film focuses on the so-called “Insurance Company Fraud” in America, in which Healthcare Insurance Providers often offer incentives to physicians who find means to deny coverage for treatment of a patient. Very Simply, finding ways that the company doesn’t actually have to pay for the healthcare of it’s customers, thus increasing Profits.

Sicko (2007)

• At one point in the film, Moore meets a group of 9/11 Rescue Volenteers who were denied Government coverage of to care for physical and psychological maladies they developed post-rescue work.

• He then sails them over to Cuba, where they proceed to protest outside the gates of Guantanamo Bay.

Case Study: Coca Cola – The Kerala Bottling Plant

• Claim – Farmers say Water supplies are rinsed by Coca Cola.Counter-Claim – The Water Supply loss is from lack of Rain in the area. Coca Cola even sends around Water Tankers to try and help the local community.

• Claim – Coca Cola have been disposing of Sludge on the farmer’s land, and it kills the crops. Counter Claim – It’s actually a useful Fertiliser.

The Mystery Sludge

• Following a BBC Radio 4 Program, Exeter University Scientists studied the sludge.

• They found traces of Lead and Cadmium, both toxic to Humans and little else of significance.

• While not Illegal, or even particularly harmful, the Sludge should not be used as a fertilizer.

Even More!

• Coca Cola was hit by suggestions there is a dangerous amount of pesticide residues in it’s drink ,and that the plant should be closed and the safety assessed, however this lawsuit was rejected firmly.

• Coca Cola believed that the Lawsuit was a slanderous scare tactic, and that the many thousands of people in the country who livelihoods depended on Coca Cola would’ve been under threat.

• It’s important to note that Coca Cola has invested over 1 Billion dollars in India by this point.

Corporate Social Responsibility• Many Companies today will have a CSR Rep that solely looks at how

the business can fulfil it’s social responsibility.• May 17th 2013• Bank staff in Huddersfield are spending the day volunteering for good

causes.• Employees from the Westgate branch of Lloyds TSB are at Sainsbury’s

in Salendine Nook to collect items for the Welcome Centre food bank, based at the Methodist Mission on Lord Street, Huddersfield.

• Paul Turner, the bank’s community director, said: “One of the best ways businesses can support local communities is by encouraging employees, customers and suppliers to use skills and time through volunteering.”

Double Edged Sword of Economic Growth

• The Industrial Revolution• Money>Enviroment• In China approx. 200 million people have no

access to safe drinking water.• Gene Grossman and Alan Krueger created the

Environmental Kuznets Curve. This Graph showed that as people get wealthier, they care more for the environment, and so any early damage is counteracted and made obsolete.

• It remains to be seen how valid the Cuznets Curve is, however, for Environmental Economists, the question has to be asked,

• ‘Is Sustainable Growth Possible?’

The Underlying Ethical Dilemma

• Usually there is a Three Pronged Motive Trident.

• Environment – Profit – Stakeholders• The question for Business Ethics is how should

one emphasize each area?

GAYS• Was it the duty/responsibility of Sochi Winter

Olympics Sponsors to use their position to advocate for Sexual and Gender Equality?

Financial Political BackingWashington state residents must vote on Initiative 522, a law that would require genetically modified foods sold in stores to be labelled “clearly and conspicuously.” While the debate on labelling is as contentious ever, Initiative 522 made the news for another reason: for raising more money than any other initiative campaign in Washington state history. Proponents of labelling have raised a respectable $8.4 million, the majority of which coming from small donations and advocacy groups. Backed by out-of-state biochemical and food-industry corporations, the No on I-522 Committee has raised over $22 million. The law on this is clear. In the Citizens United case in 2010, the Supreme Court ruled that corporations are entitled to make unlimited contributions to political campaign ads and other political tools. The question remains, are Monsanto, Coca-Cola, and Kellogg—contributors to No on I-522—unfairly influencing the political process? Even if legally permissible, should they hold back on their financing of Initiative 522 ads?

Stay out of my Classroom!• In the most recent development in the longstanding debate over the role

of corporations in the production of school curriculum, the Centre for Copyright Information is creating a school curriculum to teach elementary age students the evils of piracy and the importance of protecting copyrights. Backed by the Motion Picture Assn. of America, the curriculum named “Be the Creator,” is still under revision, but is aimed at students in kindergarten through 6th grade. The project has faced heavy criticism, as many see it as another tool to push Hollywood’s biased agenda. Others have raised the concern that this curriculum will take away from valuable class time, in an age where public schools are struggling to effectively teach the basics. Then again, copyrights and patents are an important part of our economic system, and organizations like the MPAA are entitled to promote their interests. The question remains, should the classroom be off-limits to this type of discourse, or is the MPAA in the clear?

McDonald's wants to have Easter off

• In the wake of the Affordable Care Act (ACA), in particular the provision that companies must offer a wide range of contraceptives under their coverage, those in opposition are taking to the courts with a novel argument: the ACA violates their companies’ religious conscience. Three appellate courts have heard the case—two striking down that religious expression applies to corporations and one left undecided—meaning this issue may be on its way to the Supreme Court. Corporations have a long precedent of being considered “persons” on a range of issues, but many fear the consequences of granting corporations free expression of religion. For one, corporations could select new hires, as well as terminate employees, for partaking in perfectly legal behavior that happens to violate the company’s religious code; for example, becoming pregnant out of wedlock, or marrying someone of the same sex. On the other hand, the plaintiffs claim that their companies are an extension of their religious lives and should be granted the same protections. So what do you think? Do corporations have a “religious conscience?”

Whistleblowin’ in the WInd

• In light of the NSA whistleblowing, should Companies ever make efforts to prevent principle whistleblowing?

This is my Law, not yours! The defeat of new gun control legislation, despite polls that indicated

the vast majority of the American people supported it, has focused renewed attention on the political lobbying of corporations, in this case gun manufacturers. If, as critics charge, the National Rifle Association is primarily funded by gun manufacturers, is there anything ethically wrong with this arrangement? Is it wrong for a company to spend significant amounts of money lobbying for laws and regulations that serve its economic interests? Is there any obligation to consider the social or human effects of the political position advocated? Is there any obligation to respect the will of a substantial majority of the American people?

This is my Internet, not yours!

• To what extent should Google and other companies be allowed to collect data of internet presence and internet usage in order to increase revenues?

Big Trouble in Acquittal China• Hewlett-Packard Co. announced this week that it would tighten

oversight on its Chinese suppliers' use of student interns and temporary workers. Chinese factories often resort to interns and temporary workers to supplement its workforce while avoiding the costs associated with full-time employment, and reports of abuse of these workers are on the rise: such as long hours and being underpaid. In response to these trends, HP is imposing a limit on the number of student workers allowed at its suppliers, as well as mandating that they must be working in an area related to their field of study. While labour groups view HP's announcement as a positive step forward, many fear that the source of the problem is directly linked to HP not paying high enough supplier fees, forcing suppliers to cut corners to win contracts. Is HP obligated to take additional steps toward addressing this problem?

Oh Cindy, you went and you made him look Silly…

• During certain non-customer, internal events, Cindy noticed that some of her married co-workers were bringing women other than their wives. Although she was uncomfortable with the situation, she wanted to keep her distance so as not to become too directly involved with her co-workers and their personal decisions. She had knowledge of what was going on but didn't think it was her place to intervene.

• One day, at an office party, the wife of one of her co-workers approached her. She wanted to know exactly what was going on during these trips. Cindy was frustrated to be put in this situation by her co-workers and she didn't know what to say. Should she put herself in the middle of a coworker's marriage and tell the truth about the situation? Is there another option? She didn't want to damage the team and be looked at as an outsider. She knew that she was not involved at all in these behaviors, but she still felt very uneasy about the situation.

• How should Cindy react in this situation? Is it Cindy's place to step in and say anything, or should she stay out of the situation all together? With so many different loyalties, between her co-worker, her own values, her co-worker's wife, and her job, what is most important in this situation?

Flash, Ahhhh, the Pacemaker has failed again!...

• It's 1975, and you are on the board of directors of a company that makes transistors. Among the many companies with whom you have a contract is one that makes heart pacemakers.

• Pacemaker technology is in its infancy. When doctors implant a pacemaker, the patient's normal heartbeat is disabled, and he or she relies entirely on the device. If it fails, the patient's heart stops. Doctors are not very adept at installing the pacemakers, which are extremely delicate; there is even a story of a person yawning deeply, pulling the pacemaker wire in his chest, and dying.

• After that and many similar incidents, the board begins to reconsider whether your company should sell to the pacemaker company. Members of the board feel this situation is a major lawsuit just waiting to happen and your company, as well as the company you supply, will be liable. In addition, you feel the specs the pacemaker company uses to test the transistors are not very strong.

• You and the board decide to get out of the business before it's too late. You tell the pacemaker company representatives about your conclusion, and they respond, "You can't stop selling us the transistors. You are the sole remaining supplier for us. Everyone else has backed out for the same reasons you're giving. If you don't sell us the product, we'll go out of business. Pretty soon, no one will be making heart pacemakers, and many people need them. Without the pacemaker, people don't even have a chance."

• What do you do?

Go on now Go! Walk out the Door!• Shareholders have been complaining to you about the declining fortunes

of the company. Many of your competitors have moved their operations to less-developed countries, where their operating costs are less than in the United States, and you have begun to consider whether to relocate a number of plants to offshore sites. You are a major employer in each of the U.S. cities where it is located, and you know that a plant closure will cause economic dislocation in these communities. You know that the employees who will be laid off because of plant closures will have difficulty finding equivalent positions and that increased unemployment, with its attendant social costs, will result. However, you are aware of many other corporations, including your competitors, that have shut down their U.S. operations, and it is something that you are willing to consider.

• What should you do?