Business Ethics Notes Etc

8/15/2019 Business Ethics Notes Etc

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Chapter 1:

People may face the need to make ethical decisions in their daily lives

and not every decision can be covered by economic, legal or company

rules and regulations. Responsible decision making must rely on the

personal values and pricnples of individuals involved.Before ethics and business was an oymoron of sorts. !his is because

people thought that business by nature was "wrong# or weird. $sort of

like today and politics% But now, people understand that there is too

much harm that occurs when there is a wrong ethical decision being

made. !oo many people are hurt, like in the case of &nron where

everyone remotely a'liated with the company was hurt. !he

conse(uences of unethical behavior and unethical business institutions

are too serious for too many people to be ignored.

Business should mind how they a)ect their stakeholders. *n a generalsense, a business stakeholder will be anyone a)ected, for better or

worse, by deciisons made within a +rm.

*t is now clear thata company can lose in the marketplace, it can go

out of business, and its employees can go to ail in case no one is

paying attention to the ethical standards of the +rm. -long with the

negative comes the positive. !here are bene+ts to having ethical

business practices such as a competitive business advantage. !his is

because a +rms reputation for being ethical or charitable can

encourage purchasers to buy from said company. -lso, internally,

organi/ational structure and e'ciency can increase due to trust,loyalty, commitment, creativity and initiative that 0ourish when a

company has ethical standards and meets them.

ome famous ethicists are -ristotle, 2ohn tuart 3ill, and *mmanuel

4ant. &thics refers not only to an academic discipline, but to that arena

of human life studied by this academic discipline, namely, how human

beings should properly live their lives.

-s individuals, we need to recogni/e that our social environment will

greatly in0uence the range of options that are opten to us and can

signi+cantly infelunce our behavior. 5therwise good people can, in thewrong circumstances, do bad things and less ethically motivated

indviduals can, in the right circumstances, do the right thing.

&thics is normative, in that it deals with our reasoning about how we

should act. ocial sciences such as psychology and sociology also

eamine human decision making and actions, but these sciences are

descriptive rather than normative. !hey eplain how and why pople do


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act the way they do while ethics is normative in that it says this is how

people should act. - normative discipline means that it deals with

norms, those standards of appropriate and proper $or normal% behavior.

6orms establish the guidelines or standards for determining what we

should do, how we should act, what type of person we should be.

3orality is the aspect of ethics referred to by the phrase personal

integrity. ocial ethics is the collective nature of everyone and raises

(uestions of ustice, public policy, law, civic virtues, organi/ational

structure, and political philosophy. 7ithin a business setting,

individuals will constantly be asked to make decisions a)ecting both

their own personal integrity and their social responsibilities.

&pressed in terms of how ew should lie, the maor reason to study

ethics becomes clear. 7hether we eplicitly &8-3*6& tehse (uestions

or not, each and every one of us -67&R them every day in the

course of living our lives. 5ur only real choice is whether we answerthem deliberately or unconsciously.

9alues are those beliefs that incline us to act or to choose one way

rather than another.

- corporations culture is a way of saying that a corporation has a set of

identi+able values that establish the epectations for what is normal

within that +rm.

&thical value serve the ends of human well being. -cts and choices

that aim to promote human welfare are acts and choices based on

ethical values. econ, the well being promoted by ethical values is not

a personal and sel+sh wellbeing. o one can say that ethical values are

those beliefs and pricniples that impartially promote human well being.

$"Controversy may arise when we try to specify more precisely what is

involved in human well being, but we can start with some general

observations happiness certainly is a part of it, as is respect, dignity,

integrity, and meaning. ;reedom and autonomy surely seema part of

human well ebing as do companionship and health.# 5nce again

controversy will arise because well being may be understood in many

forms. *n case you believe ina life after this oen, then well being would

mean doing what By this, can we all agree, that man, should he

completely left to himself, will hurt himself. 6ot necessarily destroy

$though possible%, but, hurt. *n case we can agree to this, then we can


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reali/e that not all of mans impulses, motivations, etc will bring about

well being. !he (uestion is then, to align the impulses one acts on with

ones beliefs and ideals as to reach a state of "well being# meaning in

line with ones beliefs about what is right and wrong. !o reach a state

of goodness and peace of mind where inner con0ict is minimali/ed

below the necessary threshold where contentment of heart is reachedand thus (uietness of mind%

*n the tradition of ethical values, one must consider the law. ?ou may

have @ options. 5ption 1 is the best A is less good more so and so on.

5ption 1, though ethical is completely illegal so you are forced to use

option A. ometimes the law will give you @ options but one of them

are unethical, for eample, the law doesnt say you cant +re an

employee for no reason, even though this is unethical.

Coporations hire ethics o'cers to make sure that they are in

accordance with the law. !hough this is common sense, thesecoporations may think "because we are abiding by the law, we are

ethical and need not do anything further since we are a good

company# however the book argues that it is not su'cient in order to

be an ethical company. &amples given are 6a/i


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"3ost of the cases of corporate scandal mentioned at the start of this

chapter involved attorneys and accountants who advised their clients

that what they were doing could be defended in court.# 7hat this

suggests is that when you are doing something unethical, because the

law cant grab hold of you, then you can go ahead and use the loop

hole anyway, which is wrong. !he history of ethics is the history of howosme of the most insightful human beigns have sought to answer the

(uestions of "how should we live.#

Practical reason deals with our choices, decisions, and actions and is

reasoning about what we should do and theoretical reason is reasoning

about what we should believe.

!heoretical reason is the pursuit of truth, which $according to the book%

is the highest standard for what we should believe. -ccording to this

tradition, science is the great arbiter of truth.


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Chapter A:

The frst step in the ethical decision making process is to determine

the facts. 3aking an hoesnt e)ort to understand the situation, todistinguish fact from opinion is essential. =owever perceptual

di)erences in how indivuduals eperience and understand siutations

can eplain many ethical disagreements.

The second step is to identify the ethical issues involved. ?ou need to

recogni/e a decision or issue as an ehical decision +rst because in case

you dont you can make decisions that dont take ethical matters into

account making you ethically accountable.

=ow does one determine that a (uestion raises an ethical issue at all>

7hen does a business decision become an ethical decision>*n order to know this one should be sensitive to ethical issues and

know that this sensitivity must be cultivated in ethically responsible

people. 5ne needs to ask how ones own decisions will impact the well

being of the people involved.

6ormative myopia, or short sightedness about values may occur when

one is so focused on the +nancial aspects of decisions and fails to

balance it against the ethical aspects so that it doesnt cross any

ethical boundaries.

The third step involved in ethical decision making involves one of itsmore vital elements. 5ne is to identify and consider all of the people

a)ected by a decision, the people often called "stakeholders.#

Considering issues from a variety of perspectives other than ones

own, and other than what local conventions suggest, helps make ones

decisions more reasonable and responsible. 3aking decisions from a

narrow and personal point of view likewise guarantees that one is not


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likely to make a decision that gives due consideration other persons

and perspectives.

The ourth step is to consider the available alternatives. 5ne can do

this by using creativity in identifying options or ones "moral

imagination#. Fsing ones moral imagination is one element thatdistinguishes good people who make ethically responsible decisions

from good people who do not.

The Fith step in the ethical decision making process is to compare

and weigh the alternatives. !his means to create a mental spreadsheet

that evaluates the impact of each alternative you have devised on

each stake holder you identi+ed. 7eighing the alternatives will involve

predicting the likely, the foreseeable, and the possible conse(uences

to all the relevant stakeholders. - critical element of this evaluation is

to try to +nd ways to mitigate, minimi/e, or compensate for any

possible harmful conse(uences or to increase and promote bene+cialconse(uences.

Conse(uences or usti+cations are not the only means for comparing

alternatives. ome alternatives might concern matters of principles,

rights, or duites that override conse(uences. !his is a matter of person

beliefs that one has. hould one stick to ones beliefs and face

discrimination, or assimilate $and in the process lose ones "identity#%

and face no discrimination.

7hen comparing and weighing alternatives one should oconsider the

e)ect of a decision on ones own integrity and character.

The Sixth step is to make a decision.

The seventh step is to monitor and learn from the outcomes and to

modify our actions accordingly when faced with similar challenges in

the future.

!he reason why "good# people do "bad# things is because of willfull

and intentional ignorance. ;or eample, some cognitive barriers are

rationali/ations of a decision made. 7e tell ourselves that it is ok, that

this isnt wrong, in order to remove any feelings of guilt from our

minds.

-nother cigintive barrier is that we sometimes only consider limited

alernatives. ;or eample, upon discovering a lost ipod, you might

conclude that in case you dont take it someone else will. Because the

original owner will lose out in boht cases, it is better that you

bene+tfrom the loss than someone else. *nstead one can discipline


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oneself to eplore additional methods of resolution and not allow the

"normative myopia# to pull ones attention away from the ethical issue

surround ones possible "gain# of an ipod.

Fsing a simple decision rule might appear to relieve us of

accountability for the decisiosn, weven when it may not be the bestpossible decision. ;or eample, "+nders keepers, losers weepers# or

"last in +rst out# $when +ring someone%. !his rules by which you are

basing your decision o) of may be (uestionable in and of themselves

but they will be used to relieve yourself of accountability.

-lso people do something callsed "satis+cing# which is that people

select the option that su'ces, even when its not the best one. -fter

spending an hour to reach a decision and a btter one is found, rarely

will somone $after a consensus is reached% say "7=5-, waiting a

minute, lets spend another couple of hours and +gure out a B&!!&R

answerG# !he very fact that a decision was reached by consensus canconvince everyone involved that it must be the most reasonable

decision.

5ther stumbling blocks are less intellectual or cognitive than they are a

(uestion of motivation and willpower. ometimes it is simply easier to

do the wrong thing.

*ts easy to cross your ethical boundary ust a bit this time. !hen a bit

more a second time. !hen a bit further. Fntil $after disaster strikes% you

reali/e that you are much further from your ethical boundaries than

you ever set out to be.

-lso people dont do the right thing because they lack the courage to

do the right thing. ometimes those in power force you, through

intimidation and fear, to stay (uiet in the face of ethically (uestionable

decisions.


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Personal and professional decision making are both decisions that we

have to make in our social roles as friends, sons or daughters, spouses,

or institutional roles such as manager, teacher, student body president.

3anagers, eecutives, and board memebrs have the ability to reate

and shape the organi/ational contet in which all employees make

decisions. !hey have a responsibility to promote organi/ationalarrangements that encourage ethical behavior and discourage

unethical behavior.

!he problem with cheating:

Cheaint occurs when a person obtains an unfair advantage. 7hen a

society condones this behavior in schools, eplicity or implicitly, by not

putting an end to it, it makes it all the more di'cult for us to maintain

vibrant, trusting communities as adults.

&ating at the dinner table together is important as studies show. !his isbecause kids can engage in conversation and become "aligned# with

their parents day after day and be eposed to their parents.

-lthough people rationali/e cheating as "its ust schoo# the reality is

that behavior in the classroom mirrors what happens in the so called

"real world.# !he student who sits behind you becomes the person who

sits net to you at the o'ce.

*6 a comple corporate situation, the indivudal re(uires and deserves

the support of hthe group. 7hen people cannot +nd such support in

their organi/ations, they dont know how to act. 3anagements

challenge is to be sensitive to the individual needs, to sheape them,

and to direct and focus them for the bene+t of the group as a whole.


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-nyone can o)er prescriptions for what you should do and how you

should act, but philosophical ethics answers the (uestion "why># as

well by connecting its prescriptions with an underlying account of a

good and meaningful human life.

Philosophical ethics deals with a basis that people, regardless of theirtheological perspectives, can agree on based o) of a "human# level of

understanding. "help the poor to go to heaven# would not be regarded

as philosophical ethics because it presupposes that you as a person

believe in an afterlife. =owever "help the poor to reduce human

su)ering# is something that many can agree on and therefore would

likely to consider from a =F3-6 perspective regardless of the

theological considerations.

!here are several persepectives from which we can view ethics. !he

perspective of utilitarianism which is an ethical tradition that directs us

to decide based on overall conse(uences of our actH deontologicalethical traditions, which direct us to act on the basis of maral principles

such as respectinghuman rightsH a theory of social ustice that takes

fairness as the primary social principle. !here is also virtue ethics,

which directs us to consider the moral character of invidiuals and how

various character traits can contribute to, or obstruct, a happy and

meangiful human life.

Ftilitarianism beigns with the convition that we should decide what to

do by considering the conse(uences of our actions. !he idea is to make

"better# decisions. "better# decisions are de+end as decisions which

lead to conse(uences that promote =F3-6 well ebing: the happiness,

health, dignity, integrity, freedom, and resepct of all the people

a)ected.

!o understand why democracy is a "good# thing we need to

understand its roots. Iemocracy is a reaction to the monarchy where

the mass is used to serve a few. !his is a monarchy, in history at least

monarchies are infamous for such. !o + this problem, democracy was

born which was the idea of helping as many people as possible reach

the maimum amount of happiness as possible. - decision that

promotes the greatest amount of values for the greatest number fopeople is the most reasonable decision from an ethical point of view $in

the lense of utilitarianism%. Ftilitarianism doesnt believe in something

as R*


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sociology, public policy, psychology and medical and health scieneces

could help determine the likely conse(ueneces of child labor in a

particular culture.

Ftilitariansim answer the fundamental (uestion what should we do byreferring to the rule "maimi/e the overall happiness.# =ow then do we

do this is the (uestion. !he book states two ways with which this isi

possible. 5ne way is through government bodies who are trained to

manage societies $yeah right% and the other is the consumer based

"market# approach where consumers are to make decisions for

themselves with regards to which decisions they would like to make in

the free market. -s in they are to decide which risks they are to take.

!he products with the highest risks of course will be cheaper $because

people will not buy them% and thus the market will produce products

that are safer. !his means that the legislative body is not needed toforce people to be in any certain way or producers to produce in any

certain way. !hey will be guided by "the invisible hand#. !his dispute is

the dispute between the "administrative# and the "market# verisons of

utilitarianism.

Ftilitarian ethics is not without its down sides. !he more people you

consider in utilitarian thinking, the less feesable it becomes. ome

people argue that all beings capable of feeling pleasure and pain

should be considered when a decision is made, whether they be of

present or future generations as well.

Ftilitarian ethics also states $in one way or another% that the end

usti+es the means. =owever this goes against the idea that there are

certain duties that one needs to uphold regardless. !hey state that one

does not need to be held accountable to any certain rule ecept to

increasing the overall happiness. 5ne can break a contract in case it

will hurt the overall happiness. 5ne doesnt need ustice, fairness, etc

in case it doesnt increase the overall happiness.

But utilitarian ethics does contribute positively in the sense that we are

reminded of the signi+cance of conse(uences.

Responsible decisiosn making also involves matters of duties,

principles, and personal integrity. uch philosophy is epounded upon

in the light of deontological thought where one makes decisions based

on ethical principles. !his approach follows rules that should be

followed even when doing so prevents "good# conse(uences from


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happening or even in case it results in bad conse(uences. !here are

legal rules, organi/ational rules, role based rules, and professional

rules. !hese rules are a part of a social agreement or social contract

which functions to organi/e and ease relations between individuals. 6o

group could function when members are free at all times to decide for

themselves what to do and hwo to act.


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!hese two factors together are what come together as the "original

position#. !hese attempt to make the priniples chosen to be fair. =is

idea is that our decisions out to be made in such a way, and oru social

institutions ought to be organi/ed in such a way, that they would prove

acceptable to us no matter whose point of view we take.

$the idea of "greed# and self interest as many times an "antiEmakeup#

to behavior. omething that makes things uglier. 5ne says "every

action is a greedy one#. ;ine, this is possible. !here seems to be an

apparent struggle between "self itnerst# and "altruism# or between

motivation that is "self regarding# and motivation that is "oterh

regarding# but * doubt that any one decision is completely one or the

other. By taking care of yourself you take care of others and when you

take care of others you take care of yourself. 5ur interest lies in all of

us. 5ur individual interest lies in the interest of all of us. -nd the interst

of all of us lies in the interest of each of us.%

9irtue ethics:

- branch within philosophical ethics which deals with what tpype of

person you should become $by the character traits or virtues which

youd embody% that would be necessary to lead a full and good human

life. 9irtue ethics seeks to undersand how traits are formed and which

traits bolster and which undermine a meaningful, worth while, and

satisfying human life so that we can take responsibility for the person

we become. 9irtue ethics calls on us to re0ect on two deeper

(uestions. 9irtue ethics

also reminds us to oibserve how character trais are formed and

conditioned. 9irtue ethics reminds us to look to the actual practices we

+nd in the business world nd ask what type of people tehse practices

are creating. =ow can one disassociate himself and his own vales from

his work, and the social institutions and practices that encrouage it.

!o make ethical decisiosn look at page JJ that has the decision making

process for ethical decision making.

=umn rights versus legal rights:

=uman rights di)er from legal rights in that , unlike legal rights, the

eistence of human rights is not contingent upon any institution.


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$end of chapter %


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Chapter K:

*ndividuals can be hindered or helped in making the right, or the

wrong, decision by the epectations, values, and structure of the

organi/ation in which they live and work.

&very organi/ation has a culture which is fashioned by a shared patternof beliefs, epecations and meanings that in0uence and guide thinking

and heaviors of the members of that organi/ation.

Culture of an organi/ation is something that you can either work well

with or it will work against you. !hey are the written and unwritten

rules of the work place. !his occurs namely because people hide things

from themselves and dont want to admit them openly $unwritten

rules% and others they dont mind to $written rules%. 5ne might enter a

corportate culture with ones own epectations and be surprised to +nd

the culture (uite di)erent from the one he was epecting and may

clash $for better or worse%. Culture changes and in order for one tochange the culture, strong leaders are necessary to have a signi+cant

impact on a culture.

Culture is present in and can be deteremined by eploring any of the

following, among others:

!empo of work, the organi/ations approach to humor, methods of

problem solving, the competitive environment, incentives, individual

autonomy, hierarchical structure.

Culture can be so apart of a person that one does not recogni/e its

eistence.

*6 situations wehre the alw is an incomplete guide for ethical decision

making, the business culture is likely to be the determining factor in

the decision.

Corporate culture can help or hurt ethical decision making. *t is the

sum total of all the corporate practices that encourage, shape, or allow

some types of decisions and discourage others.

!he cultivation of habits, including the cultivation of ethical virtue, is

greatly shaped by the culture in which one lives.

Corporate culture shapes you and you shape the culture. *ts said in the

book that the culture shapes you more so that you shape it $but *

suppose thats the whole nature vs. nuruture debate again%.

Corporations can have one of two cultures. *t can have a "compliance

based culture# or a "values based culture#. - values based culture

perceived as more 0eible and far sighted. - value absd culture is one


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that reinforces a particular set of values rather than a particular set of

rules. !hey have their codes of conduct but value based culture

recogni/es that where a rule does not apply, the +rm must rely o the

personal integrity of its workforce when decisions needs to be made.

=owever on the other end there is the "compliance based culture#where obedience to the rules as a primary responsibility of ethics is

emphasi/ed. !hey care a lot about compliance with the law and with

internal codes. !his works well in some cases but is problematic

because its only as good as the speci+cs of the particular rules that are

laid out for people.

&thical leadership and corporate culture:

7hen there are ethical bossed and they are people oriented, receptive,

when they listen and are open and have traits of integrity, honesty and

trustworthiness this sets a tone at the top management level whichresonates throughout the rest of the culture. People see ethical

leaders goal is not simply ob performance, but performance that is

consistent with a set of ethical values and principles. Behaviors and

traits must be visible. Luietly ethical people at top management wont

necessarily set the tone. !raits and behaviors must be socially visible

and understood in order to be noticed and in0uence perceptions. 7hen

a company allocates money towards a people they show how

important these people are through thebudget that they allocate to

them. ;or eample in case there are "ethical o'cers# that eamine the

ethical nature of a company and they are highly paid, have eclusive

positions, and are highly trained, then the corporation will see that it is

really important to have an ethical culture. =owever in case these

people only work part time, are voulenteers, and know ethical behavior

through the goodness of their hearts $however beautiful that is%, the

employees cant take such a person seriously nor the notion of ethics.

Budgeting determines importance.

5ne can distinguish between good leaders and ethical leaders.


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Building a values based corporate culture:

&very person has an impact on the coroporate culture, although,

ecept for perhaps the key leadership, no one individual can build or

change the culture alone. Culture derives from eladership, integration,and assessmentMmonitoring.

Before impacting the culture through a code of conduct or statement of

values, a +rm must +rst determine its mission.

-s with the construction of a personal code or mission, it is critical to

+rst ask yourself what you stand for or what the company stands for.

7hy does the +rm eist, what are its purposes, and how will it

implement these obectives. 5nce you make these determinations,

how will you share them and encourage a commitment to them amongyour colleagues and subordinates. econd step is developing a set of

guiding principles for the +rm to articulate the vision clearly with

regards to the +rms direction.

!hird step is to identify clear steps as to how this cultural shift will

occur. ?ou need to have a process and prcodueres in place that support

and then sustain your vision of ethical business practice to pro+t.

;inally, to have an e)ective code that will successfully impact culture,

there must be a belief through the organi/ation that this culture is

actually possible, achievable. 7hen con0icts remain that will preventcertain components from being reali/ed, or when key leadership is not

on board, no one will have faith in the changes articulated.

Communication of culture must be incorporated into the +rms

vocabulary, habits, and attitudes to become an essential element in

the coporate life, decision making, and determination of success.

*n the corporate world its important that ethical decision making be

apart of a workers performance review in order for it to be taken

seriously. !here are problems with ethical decision making behavior.

!he issue is the barrier that has been put up in the psyche of a childsmind that is reinforced into adulthood. !his barrier is the memory of

the negative social conse(uences of being a "tattle tale# or a "snitch#.

7histleblowing in the coporate world however is a positive thing with

regards to eposing bad behavior such as harassment or

embe//lement, fraud, etc. =owever there are many negative

conse(uences to both the +rm and the whistleblower which is why


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$according to the book% its best to try to resolve the con0ict internally

+rst and also advises the company to have mechanisms that are

e)ective for employees to be able to report any behavior that was

unethical.

-n unethical corporate culture can cause an internal risk to thecompanys business practices and can harm stock holders and other

stakeholders $both internally and eternally%. !his is why its important

to + these problems right away. - +rst clear sign of a toic corporate

culture would be a lack of generally accepted base values for the

organi/ation. =ow does the +rm treat its customers, suppliers, clients,

and workers> 3anagement of its internal and eternal stakeholders are

a good measure of the +rms internal values. 3anage +nances>

-fter the chapter +nishes, the "readings# section talks about how one

must balance between di)erent stakeholders in order to stay in line

with the companies epectations of itself. ;or eample, the adage "thecustomer is always right# isnt necessarily always right. ometimes the

+rm needs to +re a customer because the customer has hurt one of the

+rms employees. 6ot all +rms put their customers +rst, other +rms put

their employees +rst.

Chapter @:

CR $corporate social responsibility% encompasses the responsibilities

that businesses have to the societies within which these businesses

operate. 5r a concept whereby companies decide voluntarily to

contribute to a better society and a cleaner environment. *t might be a

good idea for business to identify its stakeholder groups and

incorporate their needs and values within its strategic and operational

decision making process.

Coproprate citi/enship model of CR often eists where there is a

strong leader with a sense or responsibility and connection to thecommunity. !hese CR e)orts are solely for the public good and do not

epect a commercial reutn on their contributions.

ocial Contract model of CR holds that there is a corporate

responsibility to respect the moral rights of various stakeholders due to

the argument that corporations reap the bene+ts of serving as a


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community citi/en and therefore owe a reciprocal obligation to that

community.

&nlightened self interest model of CR states that incorporating CR

can lead to di)erentiation and competitive market advantage for the

business, something that can contribute to the companys brand forthe present and future. *ts a business strategy to reduce risk, incrase

market reputation, enhance brand image, strengthen stakeholder

relationships, and protect longEterm strategic interests.

&thical custom seems to be a restricting function on businesss pursuit

of pro+ts as well as the legal constraints of the law.

!he prioriti/ation of stakeholdres is often determined by acompanys

mission, practice, board, or custom. -ll too often,however, the

prioriti/ation is presumed rather than intenonally discussed and

challenged, which might lead to entrenchment rather thanenhancement of the +rm. !oo true, even in life, where people are in

relationships and they dont really discuss their code of conduct on

what they think is right and wrong, they reali/e down the line, that the

gaps between them are big and that its best they part ways. !his

happens after a large initial investment into the relationship which is a

waste in my opinion. !o avoid this one should +rst be skeptical and look

for "deal breakers# rather than attempt to get so close to someone

only to reali/e later on that you have to leave them after all the

investment because they didnt change like youd hope.

9estment in loyalty and shared beliefs between the manufacturer andits customers has been shown in countlress industries to be a

pro+batle pro+t maimi/ing process.

Businesss social responsibilities is to be concerened with societys

interests that restrict or bind businesss behavior. ocial responsibility

is what a businesses should or ought to do for the sake of society. ;irst

it has the responsibility to obey the law. 6ot to cause harm to others,

to prevent harm even in those cases where one is not the cause $this is

less binding than the +rst%, responsibilities to do good. &ven when not

eplicitly prohibited by law, ethics would demand that we not cause

avoidable harm. -lso not to violate anyones rights.

!o further understand what giving back to the society means in the

contet of preventing harm where one is not the cause we can look at

one such Pharmaceutical Company called 3erck. 3erck has donated

NOO million tablets of a drug called 3ecti/an which has helped people

living in -frica, asia, central -merica and south -merica be healed from


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river blindness which causes people to eventually lose their eye sight.

!he company has given all these tablets because "we are in the

business of preserving and improving human life.# 7=-! - BF*6&G

o they did that by giving back. !hey werent obliged to, but the

(uestion is, when theres a blind man heading towards a pit, how

obliged are you to scream and stop him from falling in.

ome companies engage in CR but dont tell anyone about it. $P<

spend A.@ million in cash and products to help at the QM11 site%. 5thers

spend a lot to publici/e the good that they do $Philip 3orris Co. spent

A@O million dollars on an advertising campaign that communicates its

charitable activities% !he reason companies do this is because of

reputation mangamgemnt which works to make the +rm look better in

peoples eyes. !his develops something called a trust bank, which is

when consumers or other stakeholders teem to give the company slack

in case they hear something bad about the company. =owever some

+rms think theyre doing good and market all the good that they do

while these same +rms community development proects have created

community rifts in areas where their proects are at work. Can you

really say that theyre good or bad then unless you eamine all the

facts for yourself> Ioes the company show you all the good and bad so

that you can udge for yourself or does the company only tell you how

awesome it is>

ome +rms engage in CR only to make more money. !he reason for

this is that a company $like a certain tobacco company% was +nancing

the arts of a certain community $a socially charitable event% only to beable to target these people and improve revenues for the company.

=ow sick is thatG>

Ioes good ethics mean good business> !heorists continue to dispute

whether ethical decisions lead to more signi+cant pro+ts than unethical

decisions. 7hile we are all familiar with eamples of unethical

decisions leading ot high pro+ts, there is a general agreement that, in

the long run, ethics pays o). Better good will, better reputation, less

risk. -ccording to the book, it is better for the business to stick with the

good path because it is more pro+table in a sustainable manner rather

than (uick pro+ts that will eventually cause it to lose out $&6R56%.

Chapter Q notes:


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&nvironmental protection is an important aspect of eithical decision

making. 7hen doing business one must be aware of something which

is the fact that one lives inside the environment and is not distinct from

it. 3an is made from the &arth. *n a book called Collapse it was noted

how environmental degredation has caused the collapse of societies

before this one. !he idea now is to see environmental protection not somuch as a burden to business growth but rather a necessary part of it.

!his !riple Bottom ine approach takes economic, ethical and

envrinoemtnal sustainability into consideration.

!he nautral envirnoemnt is viewed as essential and vaulble to protect

human life and health but also for other reasons. Beauty and grandeur

of the natural world provide great aesthetic and inspirational value and

pschologcal values as serenity and ehilaration.

-long with the "environment# which can be viewed as trees,

mountains, rivers, lakes, forests, deserts, etc there are those that livewithin that ecosystem. !he animals. !he animals do feel pain because

they have central nervous systems as humans do meaning that they

have the capacity to feel pain. !hat being said, shouldnt man be

responsible to treat these less powerful beings with kindness> *mmerse

yourself in the words of Black -dam, an antihero from the IC Fniverse,

"when you crush an ant beneath your feet do you feel remorse> 6o. *s

this because you are evil or because you recogni/e yourself as a higher

form of life># Dsomething to think about.

!he clean air act of 1QNO, federal water pollution act of 1QNA, and the

endangered species act of 1QN were part of the F national

consensus for addressing environmental problems.

ociety had two options to further help these laws enacted. !hey could

demand environmentally friendly products in the marketplace. -s

citi/ens, individuals could support envionrmental legisltation.

ustainable development and sutainable business practice suggests a

readically new ision for integrating +nancial and envionrmental goals,

copared to the growth model that preceeded it. !hese are three goals,economic, eivnormental and ethical stuatianbility are referred to as the

three pillars of sustainability.

!he goal of this practice would be to develop recommendations that

would pave roads towards economic and social development that

would not achieve short term encomic growth at the epense of long

term einvornmental and economic sustainability. "sustainable


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development is development that meets the needs of the present

without compromising the ability of future gneratiosn to meet their

own needs.#

!he Circular 0ow model is critici/ed due to two things. Resources are

treated as in+nite, and as a result, economic growth seen as in+nite aswell. o the idea is to devlop an economic system that uses resreouces

only a ta rate that can be sutained over the long term and that

recycles or resuses both the by products of the production process and

the products themselves.

5ver the long term, reserouces and energy cannot be sued, nor waste

produced at rates at which the biospohere cannot resplace or absorb

them without eopardi/ing its ability to sustain human life. !hese are

called the "biophyslca limits to growth# !he biosphere can produce

resources inde+nitely and it can absorb wastes inde+nitely but only at

a certain rate and with a certain type of economic activity. !his thegoal of sustainable development.

!he conclusion is that over the long run, resources and energy cannot

be used, nor waste pproduced, at reates at which the biosphere cannot

replace or absorb them without eopardi/ing its ability to stuain human

life.

Backcasting is a lot like forcasting ecept for the fact that its the eact

opposite. Back casting is looking at the future and what we know what

the future must be because of present constraints then looking back at

the past to see how we need to shape the present so that it reaches

the future.

7hy reach sustainability in the +rst place>

ustainability is a prudent long term strategy that enables us to keep

active during the times where business is rough. *t allows businesses to

be able to survive while resources are low because they were not

frguile, but resrouceful and e'ecient, during the times where materials

were abudnent. o when demand for resrouces increases due to

increase in population and overall epectations in consumer lifestyle

and resources diminish, the best would be those that would be able to

best use there resources long term.

!he huge unmet market potential among the worlds developing

economies can only be met in sutainable ways. *n case China were to

consume oil at the same rate as the Fnited tates, it alone would

consume more than the entire worlds daily production and would more

than triple the emission of atmospheric carbon dioide. !o meet


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Chinese demand, new sustainable technologies and products will be

needed.

igni+cant cost savings can be achieved through sustainable practices

because when you are e'cient and use energy wisely, you dont waste

money on wasted resrouces.Competitive advantages eist for sutainable businesses.

&nviornmentally conscious consumers and enoy competitive

advantage attracting workers who will take pride in working for

progressive +rms. $bit of a stretch, and potential isnt shown to be

limited as the market would say it is%

ustainability is a good risk management strategy. teer away from

government sanctions due to unsustainable practices. o its best to

stay ahead of the curve to avoid being left behind plus you can set the

stage for what the regulations should be since you would be the "bestpractice# company that would set the standard. Consumer boycotts of

unsustainable +rms.

&coe'ciency is the idea that resources should not be used or

consumed faster than the envirnoments ability to produce them.

Biomimicry in the business sense is where one +rm uses the wastes of

another +rm to make its own products. *t is broken down into two

words. Bio meaning life and mimicry is the imitation of a process.

Businesses seek to use biomimicry in the sense of using waste $such as

a plant using C5A% to create its food.

Cradle to greave, or lifecycle means that the business is responsible

not only for producing the product but for the entire life of its products

including the ultimate disposal even after the sale.

Cradle to cradle responsibility ups the ante even further and says not

only should the business be responsible for properly taking care of the

product from production to "death# in its lifecycle but it should also

reincorporate it into another production process after it is disposed of

as waste to further increase productivity.

o far we have ecnoe'ciency and biomimicry. - third sustainablebusiness principle involves a shift in business model form products to

services.

ervice based economy is di)erent from envisioning an ecnomy based

o) of need of products. *nstead of looking at an issue as a need for

washing mahines, you would look at it as clothes cleaning. *nstead of

carpets it would be 0oor covering, air conditioning, cool air. -nd so


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forth. !his view recogni/es that there is more than one way to satisfy

the need that said product does satisfy opening the 0oor for ingenuity

and innovation.

"if environmentalists want business to produce products that arefriendlier to the environment, they must convince -mericans to

purchase them. Business will respond to the market.#

5ur stolen future $1QQ% a groundbreaking study on certain sytheitc

chemicals and the environment, assert that astoundingly small

(unitities of these hormonally active compounds can werak all manner

of biolocial havoc, particularly in those eposed in the womb.

Cradle to cradle vs. cradle to the grave. Cradle to cradle is having

responsibility of your product from the cradle $meaning its

inceptionMbeginning% to the cradle of another production line whereyour waste becomes the compononet in another assembly so that it is

reused as biomimicry would suggest. 7here the "waste# of a plant $say

the fallen leaves of a tree% become a part of the production of fertile

soil. !his is where cradle to cradle is more alert to the environment

with regards to biomimicry $a more sustainable approach to production

and waste disposal% than cradle to grave production where the

products usefulness ends at the end of its life cycle.

*n case peple are to prosper within the natural world, all the products

and materials manufactured by industry must after each useful life

provide nourishment for something

!here is no need for shampoo bottles, toothpaste tubes, yogurt

cartons, uice containers, and other packaging to last decades $or even

centuries% longer than what came inside them. =igh (uality plastic

computer cases would continually circulate as high (uality computer

cases, instead of being downycled to make soundproof barriers or

0owerpots.

"!=& 6&8! *6IF!R*- R&95F!*56#

• *ntroduces no ha/ardous material into the air, water or soil• 3easures prosperity by how much natural capital we can ccrue in

productive ways

• 3easures productivity by how many people are gainfully and

meaningfully employed

• 3easures progress by how many buildings have no smokestacks

or dangerous eSeunts


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• Ioes not re(uire regulations whose purpose is to stop us from

killing ourselves too (uickly

• Produces nothing that will re(uire future generations to maintain

vigilance

• Celebrates the abundance of biological and cultural diversity and

solar income

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