Running head: PRINCIPLES OF RESPONSIBLE COMMERCE

Principles of Responsible Commerce (Authors name) (Institutional Affiliation)

PRINCIPLES OF RESPONSIBLE COMMERCE 2 Introduction A responsible business should have a positive impact on the society through wealth creation and employment creation. In addition, a responsible business should ensure that it produces goods and services that add value to customers. Furthermore, a responsible business upholds the principle of equity and fairness, to its employees, customers, suppliers, competitors and society in general. In light of this, this paper seeks to explore principles of a responsible business and ethical issues in the business environment including Kant's non-consequentialist approach to ethics. Principles of Responsible Commerce A responsible business is built on the foundation of trust and confidence. Confidence and trust sustain business while ethical practices form the basis for such confidence and trust. In contrast, lapses in integrity, whether among employees or employer, compromise confidence and trust thereby, affecting the ability of business to serve human needs. Thus, to have sustainable market business owners should ensure that, in their pursuit of profits, they should consider the needs of customers and other stakeholders in the business environment (Rieter, 2008). The self interest of pursuing profits, without taking into consideration the needs of other stakeholders, leads to business failure and may sometime lead to government enacting counterproductive measures to regulate such selfish business owners (Bowen, 2008). Therefore, business owners should at all times instill ethical leadership so as to have a sustainable and free market for their products. Equally important, for a business to survive in the competitive environment, the owner should ensure that the business is moral and responsible. For example, the business owner should ensure that he gives back to the society by engaging in activities that improve the living standards

PRINCIPLES OF RESPONSIBLE COMMERCE 3 of the local community. Being socially responsible makes the business have the approval of the society that can ultimately lead to higher profitability of the business. Kant's Non-Consequentialist Approach to Ethics Kant's Non-Consequentialist is the most famous ethical approach that lay more emphasis on the good will. According to Kant a person who has right motives always does the right thing since he has goodwill (Altman, 2011). For example, if an individual has good will he will perform his duties because they are his duties and not because he expects a reward. Thus, any rewards, punishments or happiness, which results after performing a duty, are inconsequential or are irrelevant. Ideally, the Kant's Non-Consequentialist approach to ethics advocates for treating

humans as ends and not as means to ends. This means that human life should override any decision i.e. protection of human dignity. Indeed, human beings should never be used, by other others, to achieve selfish benefits (Altman, 2011). This approach is applicable to all facets of a responsible business. For instance, a responsible business should always offer customers high quality goods and services because it is their duty (business) and not merely to make a profit. Another example is that businesses should remunerate the employees well as it is their duty and not merely to attract employees. In addition, Kant's Non-Consequentialist approach describe an act as moral if the actor would like to be treated the same if positions were swapped. It is an extension of the saying that you should treat others the way you would want them to treat you. Case study: Ford Pinto Case Pinto was a model of a car that was introduced by Ford. As the car was being manufactured and tests were done on it, it was discovered that the car had serious design problems. This is

PRINCIPLES OF RESPONSIBLE COMMERCE 4 because the gas tank was designed in a manner that if the car was involved in an accident the gas tank would explode and cause a fire (Bowen, 2008). Thus, after the tests the engineers concluded that the design was not satisfactory. Despite these defaults, the company issued confidential memo that directed assembling to continue and that the safety measures would only be adopted if the law required so. In this case study, Ford rushed the project of assembling a car and despite the engineers noticing that there were mistakes in the car design the management went ahead and directed the car to be assembled. The moral issue in this case is that Ford only cared about making a profit and did not consider the safety of its customers. In addition, they did not inform customers the defects that the car had. This shows that Ford was not responsible as a responsible business not only ensures that it produces goods of high quality but also ensures that the goods and services are safe(Altman, 2011). Application of Kant's Non-Consequentialist Approach into Ford Pinto Case In Ford Pinto case, Ford did not practice diligence and care to protect the rights of Pinto. Ford main aim was to produce cars so as to make a profit without caring about the safety of its customers. Thus, it can be said that Ford treated human beings as a means to make selfish benefits at the expense of customers (Painter-Morland, 2011). According to the case, Ford officials knew the car had defects but went ahead and manufactured the car by issuing a memorandum saying that the safety measures would only be put in place if the law required so. The best moral principle to describe Ford Pinto actions is egoism since it reiterates that an action is right if it promotes self interest. Fords actions were made for self interest because if they had the interest of others at heart, they would have corrected the defect that was in the car.

PRINCIPLES OF RESPONSIBLE COMMERCE 5 In applying Kant's Non-Consequentialist approach, Ford did not behave morally right as far as the two categorical imperatives are concerned. Firstly, it is mere common sense that the Ford engineers would not accept to ride the Pinto after noticing the defect (Altman, 2011). This contradicts the first imperative that sates that an action is right if the actor would be willing to be treated the same if positions were swapped. Secondly, Ford treated human beings as means to ends and not as ends since they only cared about their profits at the expense of customers safety. Critical Reflection on My Learning Journey Applying the submissions in week 3, the Ford Pinto case and Kant's Non-Consequentialist approach the following discussions shows the things that a responsible business should do. Responsible business conduct consists of many principles that recognize the fact that the market forces and laws are necessary. In addition, the principles appreciate the fact the laws and market forces are not sufficient in terms of providing clear guidelines on what constitutes responsible business conduct. The principles are based on ethical foundations of fairness and responsibility. They include responsible stewardship, mutual advantage, and respect of human dignity. Responsible stewardship means that the business should provide leadership that is fair and that can help in solving societal problems. Mutual advantage means that each partner involved in a business gains while, at the same time, the business gains that is a win win situation. On the other hand, respect for human dignity means that a business should not sell goods to customers that are harmful (Shaw, 2011). In order, to appreciate the principles, of a responsible business, it is vital to discuss qualities that make a business responsible by taking into consideration the key stakeholders of a business.

PRINCIPLES OF RESPONSIBLE COMMERCE 6 The key stakeholders of a business are those individuals who have an effect on success or failure of a business. Indeed, ensuring that each and every stakeholder is satisfied helps a business to be sustainable and profitable. The stakeholders include customers, competitors, employees, suppliers and the community (Caroll, 2009). It is important to note that in as much as the business is dependent on the stakeholders the stakeholders are also dependent on the business. For example, customers depend on the business to supply goods and services. On the other hand, employees depend on business as a source of income in terms of wages and salaries. Given the aforementioned, each stakeholder will be discussed along with the duties of a responsible business. Customers Customers are the main reason why a business exists since they create demand for the good and services being sold by a given business enterprise. Thus, they help in providing revenue to a business. A business that takes care of the customers needs increases customer loyalty that in the long run increases the business profitability (Caroll, 2009). A responsible business not only takes care of its of its customers by producing high quality goods that meet customer requirements but also provides goods that are safe for consumption. In addition, a responsible business respects the different cultures of customers in terms of the way the products are marketed and advertised (Vilcox, 2007).

Employees Employees help in providing labour needed in production of goods and services. Hence, treating employees well is vital since, without employees, the business would cease to operate. A business that is responsible not only ensures that the employees are remunerated fairly but also

PRINCIPLES OF RESPONSIBLE COMMERCE 7 ensures that the employees are provided with a safe working environment (Rieter, 2008). Also, a responsible business listens to employee complaints and addresses them in a timely manner. Moreover, a responsible business ensures that it does not engage into unethical labor practices that are prohibited by the government such as child labor. Competitors Competitors are important in a business environment since they help in creating efficient markets. Without competitors, the market becomes inefficient since monopolies makes entry into markets difficult. For instance, monopolies may sell products at low prices making entry by new businesses difficult (Caroll, 2009). A business that is responsible participates in fair competition with an aim of creating wealth that ultimately promotes fair distribution of goods and services. Also, a responsible business does not engage in anti competitive behavior such as, obtaining competitive information unethically, lack of respect on intellectual property and collusions in the market place. Government Government provides conducive environment for a business to conduct its activities. This is because the government puts measures to protect business from external attacks and unfair competition practices. For instance, the anti dumping policies help to protect local industries from cheap foreign imports. Thus, a responsible business should always pay taxes to the government(Shaw, 2011). Community

PRINCIPLES OF RESPONSIBLE COMMERCE 8 The community approves the existence of a business and also provides social and operational security to a business. A responsible business ensures that it contributes to the common good of members of the society through proper waste disposal, prevention of pollution, improvement of infrastructure and creating employment to the locals to name but a few. Shareholders Shareholders provide the capital needed to fund the various activities of the business. A business that is responsible ensures that it acts in good faith and protect the right of shareholders. This can be achieved through engaging services of professionals, who are diligent, so as to maximize returns on shareholders investment (Rieter, 2008). In addition, a responsible business should not only publish results and disclose vital information to shareholders but also should respect the views, complaints and resolutions of shareholders. Suppliers Suppliers help in creating supply of goods and services to a business. They are important since, without them, a business would have no goods and services to sell. A responsible business should treat its subcontractors and suppliers fairly and with mutual respect. This is achieved through timely payment of supplies, fairness in awarding of tenders and sharing of relevant information with the suppliers (Rieter, 2008).

Conclusion This reflective essay has discussed the various foundations that make a responsible business. A responsible business is built on pillars of truth trust and confidence. In addition, the

PRINCIPLES OF RESPONSIBLE COMMERCE 9 essay has used the case study of Ford Pinto to explain Kant's Non-Consequentialist approach on ethics. Kant's Non-Consequentialist approach on ethics necessitates the need for human beings to have good will and to treat other people as ends and not as means to ends and also, to treat them fairly. References Altman, M. C. (2011). Kant and applied ethics: The uses and limits of Kant's practical philosophy. Malden, MA: Wiley-Blackwell. Bowen, W. R. (2008). Engineering Ethics: Outline of an Aspirational Approach. New York: Springer. Carroll, A. B. (2009). Business & society: Ethics & stakeholder management. Mason, OH: SouthWestern Cengage Learning. Painter-Morland, M., & ten, B. R. (2011). Business ethics and continental philosophy. Cambridge, UK: Cambridge University Press. Rieter, E. R., & Waele, H. C. F. J. A. (2008) Evolving principles of international law: Studies in honour of Karel C. Wellens. Leiden: Martinus Nijhoff Publishers. Shaw, W. H. (2011). Business ethics. Boston, MA: Wadsworth/Cengage Learning. Vilcox, M. W., & Mohan, T. O. (2007). Contemporary issues in business ethics. New York: Nova Science Publishers.