Business Ethics

  • Created by: KMuir
  • Created on: 16-04-14 09:17

Business Ethics

Business ethics considers the ethical relationship between businesses, consumers and their employees.

Milton Friedman: only activities which increase profits are to be encouraged as this is the only way that companies will survive, therefore Friedman wouldn’t be interested in making a business more ethical as this means focuses less on profits and more on welfare standards.
Adam Smith: free market competition – gets rid of restrictions in business and so puts people into competition with each other. Free market helps create an equivocal relationship between employers and employees, making trade just and free.
Karl Marx: Marx criticised Smiths views, arguing that free market could lead to inequality and would not benefit the needs of the wider workforce.
Ted Snyder: ‘Profit is more important than principle’
Keith Tondeur: people should become more ethical in the way they live their lives, especially in a business sense, however people have criticised this a believe focusing on ethical business practices takes away from profit making which is most crucial.

Consumers now expect businesses to be socially responsible after the example has been set by organisations such as ‘The Body Shop’ (alternative ways to test beauty products) and ‘The Co-operative Bank’. Businesses are now increasingly looking how they can portray a more positive social image which will help reduce criticisms and increase appeal for consumers.

However, it is important profits are the main motives to keep a company in business as it is much harder to agree to make a more ethical workplace than a more profitable one. Businesses are multinational and will be serving different cultures and so will be difficult to agree on one moral code to work by.

Relationship between business and consumers: Consumer power is growing and now more than ever can consumers have a voice and be able to change the things they don’t like in businesses. Some companies have been the focus of consumer criticism and forced to change their practices e.g. Nike and Gap over child labour, which resulted in Nike now monitoring their factories following exposure by BBC panorama. Events like this may make businesses think how volatile a consumer’s voice can be and might encourage them to create a more ethically aware business.

Relationship between employers and employees: For this relationship to be successful the two must balance their interests: the employer wants to plan for the future, make profits and keep happy employees; the employee wants the best conditions and working standards and good pay. Employees are vital in how a business can flourish as happy employees encourages people to invest and buy your products, also along with consumers employees


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