2. Business ethics: Purpose of business
- Created by: Alasdair
- Created on: 23-06-17 13:42
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- 2. Business ethics: Purpose of business
- Milton Friedman
- "The purpose of business is to make money"
- Maxwell
- "There is no such thing as business ethics"
- There are no moral obligations for business and employers/shareholders
- Corporate Social Responsibility (CSR)
- To be morally responsible for corporate actions and to the environment and stakeholders (consumers, employees, investors, communities and others)
- Example
- The Body Shop which tackles animal rights and Fair Trade issues
- Stakeholder Theory
- Will Hutton
- All stakeholders should have a share in the business
- Adam Smith and ethical egoism
- Businesses are "led by an invisible hand"
- Which is a price mechanism that leads to price rises when there is a shortage, and price reductions when there is competition
- Consumer choice drives the market into a "win-win" situation
- Where consumers want fair prices and good quality and this leads to businesses that provide good quality and fairly priced products being rewarded
- Consumers save money and businesses make profit
- Where consumers want fair prices and good quality and this leads to businesses that provide good quality and fairly priced products being rewarded
- The "win-win" view is utilitarian, but Smith argues that self-interest is not selfishness (ethical egoism)
- by pursuing self-interest, a person is putting the business first, which can serve common good of others (e.g. stakeholders)
- Louis Pojman
- "We are concerned to promote our own good, but not necessarily at any cost"
- Julian Baggini: "Good ethics is not necessarily good business"
- Businesses are "led by an invisible hand"
- Milton Friedman
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