This is Business Ethics
An Introduction
This is Philosophy
1. Edition June 2018
272 Pages, Hardcover
Wiley & Sons Ltd
ISBN:
978-1-119-05505-1
John Wiley & Sons
Further versions
Take a seat in the boardroom. What will you decide?
Corporations make difficult decisions about the right thing to do every day, but as an organization made up of people with different perspectives and values, how can a business behave ethically? This is Business Ethics offers a dynamic and engaging introduction to the study of corporate morality.
* Offers real-world practical advice for navigating ethical dilemmas in business, developed and explained through illustrative high-profile case studies like the Ford Pinto case, Enron, Walmart and British Petroleum.
* Explores how ethical theory informs business policy and practice.
* Presents unresolved contemporary case studies for consideration, inviting readers to participate in the decision-making and offer their own recommendations.
* The latest in the This is Philosophy series, This is Business Ethics features supplemental online resources for instructors and students at www.thisisphilosophy.com.
Preface xii
Part I Problems in Business Ethics 1
1 Ethics: Doing the Right Thing 3
Introduction to Ethics 3
What are ethical questions 3
How to answer ethical questions 4
Introductory Case Studies 5
Sam and the substandard notes 5
Casey and the overly-demanding internship 6
Tatiana and the fair distribution of chores 7
Alex and the too-easy-to-cheat course 8
Evaluating the Case Studies 9
Non-ethical guidelines for thinking about the cases 9
Ethical guidelines for thinking about the cases 11
Limitations of ethical evaluation: the problem of controversy 12
Reference 13
2 Business: Maximizing Profit 14
Theory of the Firm 14
Firm organization 15
Why the firm exists at all 16
Problems for firm organization 17
Business Decision-Making: Shareholders and Cost-Benefit Analysis 17
The Dominant Model 19
Shareholder Theory 22
Cost-benefit analysis 25
Business in Society: Consumers, Employees, and Community 27
References and Further Reading 31
3 Classic Business Ethics Dilemmas: When Doing the Right Thing Does Not Maximize Profits 32
Doing Right by Consumers: The Ford Pinto Case 33
Doing Right by Employees: The Walmart Case 38
Doing Right by the Community: The B.P. Case 40
Doing Right by Shareholders: The Enron Case 42
References and Further Reading 46
Case Cited 46
Part II Tools to Solve Business Ethics Dilemmas 47
4 Ethical Theories 49
The Three Major Ethical Theories 51
Utility-based ethics 52
Kant's duty-based ethics 61
Aristotle's virtue-based ethics 67
Other Bases for Ethics 72
Natural law theory 72
Contract theory 73
Ethics of care 74
Feminist ethics 75
References and Further Reading 76
5 Theories of Corporate Personhood 77
Businesses as Ethical Persons 78
Businesses as Bureaucracies 83
Businesses as Collective Persons 87
References and Further Reading 91
6 Theories of Political Economy 92
Private Property 95
The justification of private property 96
Distributive justice 106
The Division of Labor 112
Smith's productivity-based defense of the division 112
Marx's alienation-based criticism of the division 115
References and Further Reading 118
Part III Contemporary Case Studies 119
7 Business Ethics in Employment 121
Employment at Will: The Bechtel Case 121
Bechtel's corporate identity 122
Facts of the case 122
What happened 124
Historical significance 124
Ethical significance: conditions of employment 125
Executive Compensation: The A.I.G. Case 130
A.I.G.'s corporate identity 131
Facts of the case 131
What happened 133
Historical significance 133
Ethical significance: executive compensation 134
Preventing Discrimination and Achieving Diversity: The Google Case 136
Google's corporate identity 137
Facts of the case 138
What happened 139
Ethical significance: unconscious bias 141
Work-Life Balance: The Amazon Case 143
Amazon's corporate identity 144
Facts of the case 144
What happened 145
Historical significance 146
Ethical significance: work-life balance 146
References and Further Reading 147
Case Cited 148
8 Business Ethics in Advertising 149
Manipulative Advertising: The Four Loko Case 149
Phusion Projects' corporate identity 150
Facts of the case 150
What happened 151
Historical significance 152
Ethical significance: manipulative advertising 152
Targeted Advertising: The Facebook Case 155
Facebook's corporate identity 156
Facts of the case 156
What happened 157
Historical significance 157
Ethical significance: targeted advertising 158
The Dependence Effect: The Lipitor Case 158
Pfizer's corporate identity 159
Facts of the case 159
What happened 160
Historical significance 160
Ethical significance: the dependence effect 161
Discriminatory Advertising: The Abercrombie & Fitch Case 161
Abercrombie & Fitch's corporate identity 162
Facts of the case 163
What happened 163
Historical significance 164
Ethical significance: discriminatory advertising 164
References and Further Reading 165
9 Business Ethics in the Financial Sector 167
Predatory Lending: The Countrywide Financial Case 167
Countrywide Financial's corporate identity 168
Facts of the case 168
What happened 170
Historical significance 171
Ethical significance: predatory lending 171
Investment Risk: The Lehman Brothers Case 172
Lehman Brothers' corporate identity 173
Facts of the case 175
What happened 176
Historical significance 176
Ethical significance: investment risk 176
Short Selling: The Herbalife Case 178
Herbalife's corporate identity 179
Pershing Square Capital Management's corporate identity 179
Facts of the case 180
What happened 181
Historical significance 182
Ethical significance: short selling 182
Insider Trading: The Nomura Case 184
Nomura's corporate identity 184
Facts of the case 185
What happened 186
Historical significance 186
Ethical significance: insider trading 186
References and Further Reading 187
10 Business Ethics in the Environment 190
Water Supply: The Coca-Cola India Case 190
Coca-Cola India's corporate identity 191
Facts of the case 191
What happened 192
Historical significance 193
Ethical significance: tragedy of the commons 193
Indigenous Populations: The TransCanada Case 194
TransCanada's corporate identity 194
Facts of the case 195
What happened 196
Historical significance 196
Ethical significance: indigenous populations 197
Food Supply: The FieldScripts Case 198
Monsanto's corporate identity 199
Facts of the case 199
What happened 201
Historical significance 202
Ethical significance: data privacy and trust in business 202
Emissions: The VW Case 203
VW's corporate identity 204
Facts of the case 205
What happened 206
Historical significance 207
Ethical significance: emissions 207
References and Further Reading 208
11 Business Ethics in Globalization 210
Obtaining Raw Materials: The GlaxoSmithKline Case 210
GlaxoSmithKline's corporate identity 211
Facts of the case 211
What happened 213
Historical significance 214
Ethical significance: raw materials 214
Child Labor: The Victoria's Secret Case 214
Victoria's Secret's corporate identity 215
Facts of the case 215
What happened 217
Historical significance 217
Ethical significance: child labor 218
Different Cultures: The Yahoo! Case 218
Yahoo's corporate identity 219
Facts of the case 219
What happened 220
Historical significance 221
Ethical significance: repressive political regimes 221
Doing Business with Corrupt Regimes: The IKEA Case 222
IKEA's corporate identity 222
Facts of the case 223
What happened 223
Historical significance 224
Ethical significance: bribery 224
References and Further Reading 225
Part IV The Future of Business Ethics 229
12 Predicting and Preventing Future Business Ethics Scandals 231
Resolving Conflicts in Ethics 232
What kind of a person do you want to be 234
What kind of world do you want to live in 238
Looking for and Understanding New Cases 240
Patterns of wrongdoing 240
Key values for business 244
Technology and the Future of Business Ethics 245
Index 247
Part I Problems in Business Ethics 1
1 Ethics: Doing the Right Thing 3
Introduction to Ethics 3
What are ethical questions 3
How to answer ethical questions 4
Introductory Case Studies 5
Sam and the substandard notes 5
Casey and the overly-demanding internship 6
Tatiana and the fair distribution of chores 7
Alex and the too-easy-to-cheat course 8
Evaluating the Case Studies 9
Non-ethical guidelines for thinking about the cases 9
Ethical guidelines for thinking about the cases 11
Limitations of ethical evaluation: the problem of controversy 12
Reference 13
2 Business: Maximizing Profit 14
Theory of the Firm 14
Firm organization 15
Why the firm exists at all 16
Problems for firm organization 17
Business Decision-Making: Shareholders and Cost-Benefit Analysis 17
The Dominant Model 19
Shareholder Theory 22
Cost-benefit analysis 25
Business in Society: Consumers, Employees, and Community 27
References and Further Reading 31
3 Classic Business Ethics Dilemmas: When Doing the Right Thing Does Not Maximize Profits 32
Doing Right by Consumers: The Ford Pinto Case 33
Doing Right by Employees: The Walmart Case 38
Doing Right by the Community: The B.P. Case 40
Doing Right by Shareholders: The Enron Case 42
References and Further Reading 46
Case Cited 46
Part II Tools to Solve Business Ethics Dilemmas 47
4 Ethical Theories 49
The Three Major Ethical Theories 51
Utility-based ethics 52
Kant's duty-based ethics 61
Aristotle's virtue-based ethics 67
Other Bases for Ethics 72
Natural law theory 72
Contract theory 73
Ethics of care 74
Feminist ethics 75
References and Further Reading 76
5 Theories of Corporate Personhood 77
Businesses as Ethical Persons 78
Businesses as Bureaucracies 83
Businesses as Collective Persons 87
References and Further Reading 91
6 Theories of Political Economy 92
Private Property 95
The justification of private property 96
Distributive justice 106
The Division of Labor 112
Smith's productivity-based defense of the division 112
Marx's alienation-based criticism of the division 115
References and Further Reading 118
Part III Contemporary Case Studies 119
7 Business Ethics in Employment 121
Employment at Will: The Bechtel Case 121
Bechtel's corporate identity 122
Facts of the case 122
What happened 124
Historical significance 124
Ethical significance: conditions of employment 125
Executive Compensation: The A.I.G. Case 130
A.I.G.'s corporate identity 131
Facts of the case 131
What happened 133
Historical significance 133
Ethical significance: executive compensation 134
Preventing Discrimination and Achieving Diversity: The Google Case 136
Google's corporate identity 137
Facts of the case 138
What happened 139
Ethical significance: unconscious bias 141
Work-Life Balance: The Amazon Case 143
Amazon's corporate identity 144
Facts of the case 144
What happened 145
Historical significance 146
Ethical significance: work-life balance 146
References and Further Reading 147
Case Cited 148
8 Business Ethics in Advertising 149
Manipulative Advertising: The Four Loko Case 149
Phusion Projects' corporate identity 150
Facts of the case 150
What happened 151
Historical significance 152
Ethical significance: manipulative advertising 152
Targeted Advertising: The Facebook Case 155
Facebook's corporate identity 156
Facts of the case 156
What happened 157
Historical significance 157
Ethical significance: targeted advertising 158
The Dependence Effect: The Lipitor Case 158
Pfizer's corporate identity 159
Facts of the case 159
What happened 160
Historical significance 160
Ethical significance: the dependence effect 161
Discriminatory Advertising: The Abercrombie & Fitch Case 161
Abercrombie & Fitch's corporate identity 162
Facts of the case 163
What happened 163
Historical significance 164
Ethical significance: discriminatory advertising 164
References and Further Reading 165
9 Business Ethics in the Financial Sector 167
Predatory Lending: The Countrywide Financial Case 167
Countrywide Financial's corporate identity 168
Facts of the case 168
What happened 170
Historical significance 171
Ethical significance: predatory lending 171
Investment Risk: The Lehman Brothers Case 172
Lehman Brothers' corporate identity 173
Facts of the case 175
What happened 176
Historical significance 176
Ethical significance: investment risk 176
Short Selling: The Herbalife Case 178
Herbalife's corporate identity 179
Pershing Square Capital Management's corporate identity 179
Facts of the case 180
What happened 181
Historical significance 182
Ethical significance: short selling 182
Insider Trading: The Nomura Case 184
Nomura's corporate identity 184
Facts of the case 185
What happened 186
Historical significance 186
Ethical significance: insider trading 186
References and Further Reading 187
10 Business Ethics in the Environment 190
Water Supply: The Coca-Cola India Case 190
Coca-Cola India's corporate identity 191
Facts of the case 191
What happened 192
Historical significance 193
Ethical significance: tragedy of the commons 193
Indigenous Populations: The TransCanada Case 194
TransCanada's corporate identity 194
Facts of the case 195
What happened 196
Historical significance 196
Ethical significance: indigenous populations 197
Food Supply: The FieldScripts Case 198
Monsanto's corporate identity 199
Facts of the case 199
What happened 201
Historical significance 202
Ethical significance: data privacy and trust in business 202
Emissions: The VW Case 203
VW's corporate identity 204
Facts of the case 205
What happened 206
Historical significance 207
Ethical significance: emissions 207
References and Further Reading 208
11 Business Ethics in Globalization 210
Obtaining Raw Materials: The GlaxoSmithKline Case 210
GlaxoSmithKline's corporate identity 211
Facts of the case 211
What happened 213
Historical significance 214
Ethical significance: raw materials 214
Child Labor: The Victoria's Secret Case 214
Victoria's Secret's corporate identity 215
Facts of the case 215
What happened 217
Historical significance 217
Ethical significance: child labor 218
Different Cultures: The Yahoo! Case 218
Yahoo's corporate identity 219
Facts of the case 219
What happened 220
Historical significance 221
Ethical significance: repressive political regimes 221
Doing Business with Corrupt Regimes: The IKEA Case 222
IKEA's corporate identity 222
Facts of the case 223
What happened 223
Historical significance 224
Ethical significance: bribery 224
References and Further Reading 225
Part IV The Future of Business Ethics 229
12 Predicting and Preventing Future Business Ethics Scandals 231
Resolving Conflicts in Ethics 232
What kind of a person do you want to be 234
What kind of world do you want to live in 238
Looking for and Understanding New Cases 240
Patterns of wrongdoing 240
Key values for business 244
Technology and the Future of Business Ethics 245
Index 247
TOBEY SCHARDING is Visiting Assistant Professor at Rutgers Business School and Assistant Professor of Philosophy at the Bloomsburg University of Pennsylvania. She specializes in business ethics and finance ethics, with a focus on issues concerning risk and uncertainty. Her articles have appeared in leading academic journals such as Business Ethics Quarterly, Public Affairs Quarterly, and Georgetown Journal of Law and Public Policy.
