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Corporate Social Responsibility (Fach) / Chapter 1: Introduction to Business Ethics (Lektion)
Crane, Andrew, Matten 2010
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- What is Business Ethics? = study of business situations, activities and decisions where issues of right and wrong are adressed can be said to begin where the law ends "grey areas" of business primarily concerned with those issues not covered by the law no definite concesus on whether something is right or wrong
- Morality Definition Morality is concerned with the norms, values and beliefs embedded in social processes which define right or wrong for an individual or a community All individuals and communities have morality, a basic sense of right or wrong in relation to particular activities
- Ethics Definition 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 a given situation These rules and priciples are called ethical theories (Outcomes) represents an attempt to systematize and rationalize morality (typically into generalized normative rules) that supposedly offer a solution to situations of moral uncertanty
- Relationships between morality, ethics and ethical theory Ethics Morality → Ethics → Ethical Theory → Potential solutions to ethical problems
- Why is business ethics important Power and influence of business in society is greater than ever before. Large companies have too much influence on the decisions of their government. Business etics helps to understand why this is happening, what its implications might be and how we might adress this situation Business has the potential to provide a major contribution to our societies. Raises significant ethical issues. (McKinsey: 50 % of business executives think that corporations make a mostly/positive contribution to society, 25 % believe that their contribution is mostly somewhat negative) Business malpractices have the potential to inflict enormus harm on individuals, communities and the environment (business ethics = improve the human condition) The demands being placed on business to be ethical by its various stakeholders are constantly becoming more complex and more challenging. Business ethics can help to improve ethical decision-making by providing managers with appropiate knowledge and tools, to correctly identify, diagnose, analyse and provide solutions to the confronted ethical problems Business ethics provides us with a way of looking at the reasons of infractions (like fraud, fairness) and the ways in which such problems might be dealt with managers, regulators and others interested in improving business ethics Business ethics can provide us with the ability to assess the benefits and problems associated with different ways of managing ethics in organizations Business ethics provides confronts us with sme of the most important questions faced by society
- Globalization A Proces which diminishes the necessity of a common and shared teritorial basis for social, economic and political activities, processes and relations deterrtorialization of economic actitives particulary relevant for business ethics (culture, law, accountability)
- Accountability issues the more economic activities get deterritorialized, the less governments cant control them call for direct (democratic) accountability of MNC has become louder in recent years globalization leads to a growing demand for corporate accountability
- Key actors in business ethics Europe: Governmens, trade unions and corporate associations Asia: corporations Third Sector (NGO)
- Sources of difference between different regions globally differing cultural, economic and religious histories of the Europe and the US interest in broader macro issues of business ethics in europe after the second world war (politcal restructuring) corporate scandals in the US (focus on individual action)
- Sustainability and Business Ethics assessing not only business activites specifically, but industrial and social development more generally has become an increasingly common term in the rhetoric sourrounding business ethics Subtainable development = devleopment that meets the needs of the present withour compromising the ability of future generations to meet their own needs
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- Sustainability Definition refers to the long-term maintenance of systems according to environmental, economic and social considerations
- The Triple Bottom Line (TBL) represents the idea that business does not have just one single goal (namely adding economic value)
- Sustainablility - Different perspectives -Triple Bottom Line (TBL) Environmental concept of sustainability is generally regarded as having emerged from the environmental perspective (forestry management, later resource management) at the moment: sustainability is a purley environmental concept Economic economic perspective on sustainability initially emerged from economic growth models that assessed the limits imposed by the carrying capacity of the earth focuses on the economic performance of the corporation itself: the responsibility of management is to develop, produce and market those products that secure the long-term economic performance of the corporation Social relatively new development (emerged during the 1990s) regards the impacts of business activities on indigenous communities in less developed contries and regions key issue: social justice
- The triangle of national integration under the Westphalian order Politics Economy Civil Society = Social integration of the nation
- Regulatory problems due to globalization Absence of regulation in zones of conflict (e.g. Sudan) and weak states (e.g. Bangladesh) Absence of regulation or problematic regulation in repressive regimes or transformation states (e.g. Myanmar; China) Bargaining power of companies has increased (e.g. they can outsource) Problems with a transnational logic (global warming, financial markets, organized crime)
- The Westphalian organization of society centralization of political power in the state’s hands monopoly over the use of force (army and police) expanision of state administration and legislation