BSB119 Lecture Notes - Lecture 9: John Stuart Mill, Cultural Relativism, Morality
Week 9 Global Business Lecture Notes
Ethical Issues
What is Ethics?
• "Ethics has to do with what my feelings tell me is right or wrong.“
• "Ethics has to do with my religious beliefs."
"Being ethical is doing what the law requires.“
• "Ethics consists of the standards of behavior our society accepts.“
• "I don't know what the word means."
Ethics→ Early Philosophical Approaches
• Utilitarianism (David Hume/Jeremy Bentham/ John Stuart Mill)
o Importance of ‘consequences’
o An ethical action should lead to the best possible of good consequences over
bad consequences
o Problem: unjustified treatment of the minority
• Kantian (Immanuel Kant)
o People should not be treated as ‘means to the ends’ (people are not machines -
they have dignity and should be respected as such)
o Problem: no consideration for moral emotions/sentiments (eg. sympathy or
caring)
• Freidman Doctrine (Milton Friedman)
o The social responsibility of business is to increase profits within the rules of
law (responsibility to shareholders should be the priority)
o Problem: should a business sacrifice ethics for profits?
• Cultural Relativism
o Ethics are culturally determined (firm should adopt the ethics of the culture in
which it is operating)
o Problem: what is culturally appropriate may not be ethically justified
• Righteous Moralism
o MNC’s home-country standards of ethics are the appropriate ones to follow in
foreign markets
o Problem: it may not always be appropriate to adopt home-country standards
• Naïve Immoralism
o A manager should not follow ethical norms in a host nation if firms from other
nations are not following
o Problem: does this mean that we can conduct a business unlawfully if other
firms are doing so in the host nation?
What is Business Ethics?
• Ethics is defined as an individual's personal beliefs about right and wrong
behaviour. Ethics is not just the practice of individuals; it is a value shared by
society as a whole.
• Based on well-established standards of right/wrong, obligations, fairness, etc.
• Applied to business, ethics attempts to describe how people should act within given
business structures.
• Some recent cases…
o Volkswagen scandal, FIFA corruption case, Barclays Bank Libor-rigging
scandal, etc.
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