Is business ethics an oxymoron? (Part 1)

This assignment discusses whether business ethics is an oxymoron or not. The assignment identifies the growing recognition of business ethics as a discipline concerned with the social and economic impact of organizations within their internal but also external environment (Moore, 1999). The assignment provides an overview of business ethics as this is situated in the academic literature.

Business Ethics

According to Idowu and Filho (2008) the study of business ethics began as a discipline from the wider realisation that organizations do not only generate wealth and profit for the benefit of their stakeholders alone. Instead, their corporate actions carry implications for the employees internally, but also, for the wider society (Kaler, 2003). Such influence originates from the wider study of ethics as a discipline concerned with the constitution of what is ‘right’ or ‘wrong’ (Weiss, 2008). Morality constitutes the area where ethical values and norms are thought to apply within a specific social context (Paliwal, 2006). However, is widely suggested that the application of morality onto organizations remains challenging for three reasons (McDonald, 2014). Firstly, is thought that corporations are typically regarded as ‘artificial persons’ in the eyes of the law (Moore, 1999). Secondly, corporations are notionally ‘owned’ by shareholders, but exist independently of them (Mesmer-Magnus and Viswesvaran, 2005). Thirdly, managers and directors have a fiduciary responsibility to protect the investment of shareholders (Liyanarachchi and Newdic, 2009).

In contrast to the above proposition it is also suggested that organizations carry power in the way they allocate, manipulate, and exploit resources. For this reason, Moore (1999) suggests that attention was paid to the ways with which it could be academically viable to study how and when organizations can be considered as responsible for their business decisions. Hence, the emergence of business ethics is not an oxymoron, because, it is concerned with how and why organizations generate actions that have moral implications and which cannot be easily controlled (Crane and Matten, 2016).

For example, the exploitation of natural resources like, oil and gas can have important implications for the people that live within the specific geographical location. For example, it is argued, by Crane and Matten (2016) that the large oil refining company Shell spent considerable effort in order to exploit oil in Nigeria and without accounting for the physical destruction of its oil drilling for the local communities. Furthermore, it is suggested that the local communities on the Delta did not benefit from Shell’s economic exploitation of its natural resources (Crane and Matten, 2016).

In particular, environment protection organizations like the non governmental Greenpeace, suggested that substantial resources where challenged to the political parties (Crane and Matten, 2016). The mismanagement of resources meant that people were not actually benefitting from the company’s selling of products and services in order to improve their standard of living (Crane and Matten, 2016).

A similar argument is also expressed with the growing economic power of organizations that decide to stop their operations within a particular region or/and country (Weiss, 2008). For example, even though products like coffee and bananas can be sourced at a low price from producers, supermarkets hold considerable purchasing power. Hence, consumers need to pay the price determined by the additional margins added by supermarkets and which cannot be regulated (McDonald, 2014).

For this reason, McDonald (2014) argues that corporations, such as supermarkets, are benefitting from the profit margins but which are not passed onto the final consumer. Following the above discussion a definition of business ethics is suggested by Carroll and Buchholtz (2000:35) stating that it is “responsibility that encompasses the economic, legal, ethical, and philanthropic expectations placed on organizations by society at a given point in time.”

References

Carroll, A. & A. Buchholtz (2000)Business and society: ethics and stakeholder management, (4th ed). Cincinatti: Thompson Learning.

Crane, A., Matten, D., (2016) Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford University Press.

Idowu, S. O., Filho, W.L. (2008) Global Practices of Corporate Social Responsibility. Business and Economics. Berlin Heidelberg: Springer

Kaler, J. (2003), ‘What is a business?’, Philosophy of Management, 3 (2): 57-65.

Liyanarachchi, G. and Newdick, C. (2009) ‘The Impact of Moral Reasoning and Retaliation on Whistle-Blowing: New Zealand Evidence’, Journal of Business Ethics, (89):37-57

McDonald, G., (2014). Business Ethics. Cambridge University Press.

Mesmer-Magnus, R. J. Viswesvaran, C. (2005) ‘Whistelblowing in Organizations: An Examination of Correlates of Whistleblowing Intentions, Actions and Retaliation’, Journal of Business Ethics, (62):277-297

Molyneaux, D. (2003) ‘ “Blessed are the Meek, For the Shall Inherit the Eart” – An Aspiration Applicable to Business?’ Journal of Business Ethics, (48): 347-363

Moore, G. (1999) ‘Corporate Moral Agency: review and implications’, Journal of Business Ethics, 21 (4): 329-43.

Paliwal, M. (2006) Business Ethics. New Delhi: New Age International.

The Guardian (2017) Cambodian female workers in Nike, Asics and Puma factories suffer mass faintings [ONLINE] Accessed on 18.1.18 from URL: www.theguardian.com

Weiss, J., (2008) Business Ethics: A Stakeholder and Issues Management Approach. Cengage Learning.

 Image: https://pixabay.com/en/business-idea-style-concept-goals-1753098/

Leave a Reply

Your email address will not be published. Required fields are marked *