BUSINESS ETHICS IN

ACTION LAW: AN
INTRODUCTION

LECTURE 2: EXAMINING
ETHICS

Sanjiv Sachdev
Exercise 1.

 Is this a good
question?
 Define ‘Good’
 What constitutes a ‘Good’ Q?
 Provokes thought, stimulates
discussion, leads to interesting &
innovative ideas?
 Prompts the Q – What is a ‘bad’
question?
 Unstructured, vague?
 Structure
Introduction: Tutor, Module Handbook, Content and
Assessment, Resources
What are ethics?

 Definitions
 Why are they important?
 Business ethics
 Morality & ethics
What is
The Business Ethics in Action
team
 Module leader & Course Leader: Sanjiv
Sachdev Sanjiv.Sachdev@uwl.ac.uk
 Lecturer: Vivek Chitran

Vivek.Chitran@uwl.ac.uk
 Module administrator: Susan

Broomfield
Susan.Broomfield@uwl.ac.uk
 Aim of the module
 Understand the main conceptual frameworks that
inform ethical judgment.
 Enhance a contemporary outlook of ‘ethical’ debates

that surround the external and internal environments

of organisations.
 Develop a set of practical skills necessary to identify

and discuss ethical business dilemmas.

 Foster learning through discussing ethical behaviour.
 Study Themes
1: The role of Ethics in Business legality, morality and beliefs (bribery, ‘pseudo-bribery’ co-op/green). The
importance of trust in organisations.
2: Consequences of human actions. Decision making process. Triple Font theory.
3: Ethical judgement and evaluation of decisions. Role of Normative theories and models.
4: Understanding and explaining ethical decisions. Role of descriptive theories. Individual and situational
factors that influence decisions.
5: Wisdom in leading organisation. Ethical leadership. Virtue ethics. Role of prudence and main virtues of a
leader.
6: Organisational Ethics. Stakeholders. Managing Business Ethics. Corporate governance. Ethical codes.
Ethical training programmes.
7: Human work. Employees as stakeholders. Ethical issues in the workplace.
8: Corporate Social Responsibility. Non-profit sector. Corporate volunteering. Social enterprises.
9: Frequent ethical issues in Business.
10: Marketing ethics. Ethical consumption. Sustainable consumption.
11: Sustainability. Environmental business ethics.
 Assessment 1: Coursework
(individual)
Identify and critically analyse the ethical issues confronting a business sector from list
A. The analysis should apply normative theories and provide policy recommendations.
The assessment has two parts:
a) An ‘in-class’ presentation outlining the scope and focus of intended
review (24th Feb). This is not awarded module marks, but must be approved by the
module tutor(s) before progressing to the written report.
b) A written report.
List A. Select from the following: car manufacturing; financial sector and banking;

consultancy; Hospitality and Restaurants; Mass media; Food retailers (supermarkets);

pharmaceutical.
Weighting: 50% Submit by: 16th March 11.59pm (Week 9); Word Limit: 2000

 
 Assignment 2: Coursework (group
work: a maximum of 4 students in
each).
A video presentation outlining the content of the ethical audit. Each
a)
  should be a maximum of 5 mins. (10% of the final mark).
video
b) A written report: You are a group of ethical consultants. You are
required to prepare an ‘ethical audit’ of an organisation with which
you are familiar (90%). This entails a critical evaluation of TWO
of the following:
c) The organisations approach to Corporate Governance.
d) The organisations approach to Corporate Social Responsibility (CSR).
e) A critical appraisal of the organisations systems and processes for the
management of Business Ethics.
f) The organisations approach to Sustainability .
Assignment 2
 Weighting: 50%
 Submit by: 6th April 11.59pm (Week 12) via

turnitin
 Word count: 2000
 Readings
• Beauchamp, T. Bowie, N. and Arnold, D. (2009) Ethical theory & Business, Pearson
• Crane, A. and Matten, D. (2016) Business Ethics, Oxford
• Fisher, C. and Lovell, A. (2009) Business Ethics and Values, Prentice Hall
• Mallin, C. (2010) Corporate Governance, Oxford
• Mele, D. (2009) Business Ethics in Action, Palgrave Macmillan
• Tricker, B. (2012) Corporate Governance Oxford
• Chryssides, G. and Kaler, J. (1999) “Essentials of Business Ethics” McGraw Hill
• De George, R. T. (2006) Business Ethics (6th Edition) Pearson
• Dienhart, J. W. (2000) Business, Institutions, and Ethics OUP
• McIntosh, M. et al (2003) Living Corporate Citizenship, Prentice Hall
• Post, J., Lawrence, A. and Weber, J. (2005) Business & Society, McGraw Hill
• Wicks, A., Freeman, R., Werhane, P. and Martin, K. (2010) Business Ethics, PrenticeHall
 Learning Resources
• www.ibe.org.uk - Institute of Business Ethics
• www.eoa.org - Ethics Officers Association
• www.sustainability.co.uk - Company that developed ‘triple bottom
line’ methodology
• www.worldbank.org - The World Bank
• www.weforum - World Economic Forum
• www.bsr.org - Business for Social Responsibility
• www.wto.org - World Trade Organization
• www.wtowatch.org - NGO oversight group
Podcasts
 FT Big Read
 FT World Weekly

 BBC Thinking Allowed

 BBC Free Thinking

 BBC Analysis

 Guardian The Long Read

 What are ethics?
Derives from the Greek ‘ethos’ – ‘custom’ or ‘habit’ belonging to
character and virtues (the attitudes or dispositions of an individual
for a good life). Developed into frameworks of behaviour:
 Kant: ‘the categorical imperative’: we should never treat others as means
but always as “ends in themselves”
 Bentham: ‘the greatest good for the greatest number’ [overall well-being]
 John Rawls/Scanlon:‘contractualism’-‘an act is wrong if its performance
under the circumstances would be disallowed by any set of principles for
the general regulation of behaviour that no one could reasonably reject as
a basis for informed agreement’
 Exercise 2: The ‘Trolley’ problem
1. There is a runaway train. You are in control of the track switch. If it takes
route ‘A’ it will kill 5 people; if it takes route ‘B’ it will kill 1. What do you
do?
2. The Bridge variant: There is a runaway train. If it takes route ‘A’ it will kill
5 people; if you push a large man off a bridge to trigger the train’s
automatic brake they will be saved. What do you do?
3. If you knew that route ‘A’ would kill five habitual child killers, and that on
route ‘B’ there is a healthy 10 year old who has been tied down by these
killers, would that change your mind?
What are Business Ethics?

‘Business ethics is the study of

business situations, activities, and
decisions where issues of right and
wrong are addressed’
- Issues of morality
Crane and Matten (2016: 5)
 Morality & ethics
• Morality is concerned with the norms, values and beliefs
embedded in social processes which define right and
wrong for an individual or a community.
• 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 any given
situation.
• These rules and principles are called ethical theories.
 The relationship

Ethics … to
rationalises produce …that can
morality … ethical be applied
theory … to any
Potential
Morality Ethics Ethical situation.
solutions to
theory ethical
problems
Ethics & the law
 Ethics

grey
area
 Why is Business ethics important?
1. Business has huge power in society
2. Business can make a major contribution to society
3. Businesses can inflict enormous harm
4. Increasing demands from stakeholders
5. Employees face significant pressures to compromise
ethical standards
6. Continued occurrence of ethical infractions/dilemmas
7. Evaluating different ways of managing business ethics
Why do firms pay attention to
ethics?
• Recover Image
• Enhance Corporate Reputation
• Enhance Stakeholder Relationship
• Act with real commitment
Ethics in large companies. Source:
Ethics Resource Center (2013)

 %
Differences across organisational
types
Stakeholders Large Small Civil society Public sector
corporations businesses organisations organisations

Financial integrity, Rule of law,

Main priorities in Financial integrity, corruption, conflict of
employee/
addressing ethical employee/ customer issues interest; procedural &
issues customer issues accountability

Formal, public
Approach to Informal, trust- Informal, values- Formal,
relations and/or
managing ethics based based bureaucratic
systems-based

Responsible General public,

and/or Shareholders and higher level
Owners Donors and clients government
accountable to other stakeholders
organisations

Shareholder
Main constraints Lack of Lack of resources Inertia, lack of
orientation; size
resources and and formal training transparency
and complexity
attention
Globalisation
• According to Scholte (2005) globalisation is NOT
– ‘internationalization’
– ‘liberalization’
– ‘universalization’
– ‘westernization’
• Globalisation is: ‘a process which diminishes the
necessity of a common and shared territorial basis for
social, economic, and political activities, processes,
and relations’.
– ‘deterritorialization’
 Ethical impact of globalisation
Stakeholders Ethical impacts of globalisation
Globalisation provides potential for greater profitability, but also greater risks. Lack of
Stakeholders Globalisation
regulation provides
of global potential
capital forleading
markets, greatertoprofitability, but also greater
additional financial risks.
risks and Lack of
instability.
Stakeholders regulation of global capital markets, leading to additional financial risks and instability.
Corporations outsource production to developing countries in order to reduce costs in
Employees global marketplace - this provides jobs but also raises the potential for exploitation of
Employees
employees through poor working conditions.
Global products provide social benefits to consumers across the globe, but may also
Global
meet products
protests aboutprovide social
cultural benefitsand
imperialism to consumers across
westernization. the globe, but
Globalisation canmay
bringalso
Consumers meet protests
cheaper prices toabout culturalbut
customers, imperialism
vulnerable and westernization.
consumers Globalisation
in developing canmay
countries bring
Consumers cheaper
also prices
face the to customers,
possibility but vulnerable
of exploitation by MNCs. consumers in developing countries may
also face the possibility of exploitation by MNCs.
Suppliers & Suppliers in developing countries face regulation from MNCs through supply chain
Suppliers & Suppliers in developing
management. Small scalecountries
indigenous face regulationexposed
competitors from MNCs through global
to powerful supplyplayers.
chain
competitors management. Small scale indigenous competitors exposed to powerful global players.
competitors
Global business activities brings the company in direct interaction to local
Civil society Global business activities brings the company in direct interaction
Civil society communities with possibility for erosion of traditional community life; to local active
globally
(NGOs, etc) communities
pressure groupswith possibility
emerge for erosion
with aim to “police“of traditional community
the corporation wherelife; globally active
governments are
(NGOs, etc) pressure groups emerge with aim to “police“ the corporation where governments are
weak and tolerant.
Globalisation weakens
weak and tolerant. governments and increases the corporate responsibility for
Government & Globalisation
jobs, weakens governments
welfare, maintenance and increases
of ethical standards, the corporatealso
etc. Globalisation responsibility
confronts for
Government &
regulation jobs, welfare,
governments maintenance
with corporations of from
ethical standards,
different etc.expectations
cultural Globalisationabout also issues
confronts
such
regulation governments with corporations from different
as bribery, corruption, taxation, and philanthropy. cultural expectations about issues such
as bribery, corruption, taxation, and philanthropy.
Sustainability
• Sustainable development is development that
meets the needs of the present without
compromising the ability of future generations to
meet their own needs. (World Commission on
Environment and Development, 1987)

• Sustainability refers to the long-term maintenance

of systems according to environmental, economic
and social considerations
The three components of
sustainablilty

Economic Social

Environmental
The triple bottom line
• Coined by John Elkington
• Bottom line thinking suggests sustainability
as a goal
• Three dimensions:
– Environmental perspectives

– Economic perspectives

– Social perspectives
Questions