Business Ethics

Kant and Duty

(8 mins)

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Issue - Globalisation

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Issue – Profit Motive (Friedman’s
argument)

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Issue - Whistleblowing

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Issue – Stakeholder Theory & Conflicting
Interests
• Stakeholder theory argues that businesses need to consider every person
who is affected by their decision.
• Much wider than just employees and customers.
• Includes the local inhabitants, suppliers, overseas workers in the supply
chain.
• In 2013 Rana Plaza Garment factory collapsed in Bangladesh, killing
1,000 workers. Who is responsible?
• In reality, duties conflict with each other.

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Corporate Social Responsibility
Definition Corporate Social Responsibility (CSR) implies that organisations
consider the interests of society by taking responsibility for the impact of
their activities on:
• customers
• employees
• shareholders
• communities
• the environment
in all aspects of their operations – it is the moral duty in the global world
where stakeholder interests must be considered

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European Commission Definition of CSR
• "A concept whereby companies integrate social and environmental
concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis." European Commission
• "Corporate Responsibility is about ensuring that organisations manage
their businesses to make a positive impact on society and the
environment whilst maximising value for their shareholders." Institute
of Chartered Accountants in England & Wales

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Possible Benefits of Corporate Social
Responsibility
• Improved productivity (output per hour) of the workforce
• Improved community relations (and trade-off of community benefits in
exchange for planning consent)
• Improved financial performance may result if…
• Improved image with consumers and hence marketability of products
• Improved share price – of shareholders are looking for ethical elements to a
business
• Improved recruitment of top-level staff – eg graduates make be seeking
ethical elements
• Improved environmental protection

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Universalise your behaviour
• Can you turn your business behaviour into a universal law which everyone
follows so “always take care of the environment?”
• Step 1 as business leader - take an imaginative step away from this situation
• Step 2 imagine a world where everyone in similar situations cared for the
environment
• Step 3 ask yourself if this world would be a better or worse place to be
• Step 4 ask yourself: what would happen in the long run if the environment was
degraded? Is it equivalent to a form of suicide (self-destruction)?

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Trafigura Case Study – BBC Report (7
minutes)

• https://www.youtube.com/watch?v=hWIR6bHugSY

• This report was first shown on BBC Newsnight's "Dirty tricks and toxic
waste in Ivory Coast", 13 May 2009

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Trafigura and Toxic Waste 2006
In ethics three factors are important:
• Motive – self-interest, duty or ?
• The action itself – is it consistent with moral norms?
• The consequences – were the results ‘good’ or ‘bad’?

But..remember
• Two ‘goods’ can conflict – eg profit (for shareholders) and environmental
protection (for all of us)
• Consequences can be an unreliable guide – we may not be able to predict them

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Trafigura Foundation
• Today The Trafigura Foundation (established 2008) provides long-term
funding and expertise to improve socioeconomic conditions for vulnerable
communities around the world.
• In 2015, the Trafigura Foundation supported 51 programmes with 44
partners across 29 countries.
• $43m has been distributed worldwide since 2008 (33% to Africa)

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What are the issues arising?
• Profit or ethical responsibility?
• Issues of justice for the poor? (Compare with compensation on the US BP
oil rig blow out in the Gulf of Mexico)
• Issues of corporate power versus press and individual freedom?
• “Kantian ethics is the best approach to issues surrounding corporate
social responsibility”. Discuss

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