Business ethics case study

Evaluating Business Ethics Normative Ethical Theories

Having completed this chapter you should be able to:

Explain the role of normative ethical theory for ethical decision-making in business.

Understand and apply Western modernist ethical theories, i.e. utilitarianism, ethics of duty, rights and justice, and social contract theory.

Understand and apply alternative ethical theories, i.e. virtue ethics, ethic of care, discourse ethics, and postmodernism.

Conduct a pluralist business ethics evaluation.

Key concepts

Normative ethical theory

Ethical egoism

Utilitarianism

Ethics of duty

Categorical imperative

Human rights

Justice

Social contract

Virtue ethics

Ethic of care

Discourse ethics

Postmodern ethics

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INTRODUCTION Whether we are fully aware of it or not, ethical judgements are a part of our everyday lives. We constantly come up against situations where values are in conflict and we have to make a choice about what is right or wrong. Maybe it is a question of whether to lie about something in order to protect a friend’s feelings, or driving over the speed limit when rushing to avoid being late for a date, or perhaps deciding whether to report a classmate you have seen cheating on their assignment. The point is that we all have some prior beliefs about what is right or wrong that help us to decide what to do. In most cases, the situations we are faced with in our personal lives are not very dramatic, and are pretty much within the scope of what a typical person would be able to decide. For those living in a complex social setting like a warzone, individual decision-making and ethics become more complicated and challenging, and very few will have had the advantage of being taught frameworks and concepts to help them unpick the issues. In certain professions, such as the legal or medical profession, decisions will sometimes have enormous, even life or death consequences, and legal and medical ethics are highly developed areas of academic study to help lawyers, nurses, and doctors work through the ethics of their practices (Beauchamp and Childress 2012). In a business context, too, we face complex situations, sometimes with global impact, in which even the best of us could use some help in untangling the rights and wrongs. Luckily, as we will see in this chapter, such help is readily at hand.

Consider the case of a multinational company intending to establish a subsidiary in a developing country. There are a number of ethical problems that may arise—maybe the local public authorities expect to receive bribes for granting planning permission, perhaps labour standards in the country are particularly low, or possibly workplace discrimination is much more common than back home. There is also the additional problem that a variety of people will be involved, all of whom might have different views and attitudes towards these issues. Consequently, coming to an ethical conclusion in business situations is far more complex than in most of the situations where we, as private individuals, have to make ethical decisions.

Perhaps more importantly, in a business context there is often a need for these decisions to be based on a systematic rationale and widely understandable argument, so that they can be adequately defended, justified, and explained to relevant stakeholders. Similarly, if we believe that an organization has acted unethically in responding to these issues, we need some basis from which to argue our case. After all, at what point can we say that a particular behaviour is more than just different from what we would have done, but is in some way actually wrong? This is the point where normative ethical theories come into play. By normative, we mean ethical theories that aim to prescribe the morally correct way of acting; that is, how we ought to behave. It is worth noting that the normative perspective has a counterpoint in descriptive ethical theory. While both normative and descriptive approaches seek to inform morality, normative theory can best be understood as a code of conduct that all rational beings would adhere to. Descriptive morality, on the other hand, applies to a code of conduct adopted by a particular group or society; it may be the guidelines of a religion, for instance (Gert and Gert 2017), which we discuss in more detail later in the chapter. Hence, whereas a commitment to do no harm might be considered a normative guideline that all can arrive at, the French Declaration of the Rights of Man1 and of the Citizen of 1793 outlines the emphasis on equality and liberty that remain guiding values of individual behaviour in France to this day. The lines are a little blurred here, since descriptive ethical theories need to be evaluated as to whether they are morally sound (that is, they also

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have a normative component), but for our purposes, we are most concerned with normative ethical theories which are widely applicable, not just of interest to a certain sector or group of society.

Normative ethical theories Rules, guidelines, principles, and approaches that determine right and wrong.

In this chapter we will take a look at the major ethical theories and analyse their value and potential for business ethics. To begin with, though, we first need to be clear about how exactly we shall be using ethical theory in the context of this chapter and in the rest of the book.

THE ROLE OF ETHICAL THEORY Next time you are all together, take a look around your class—do you anticipate that you will all have the same preferences and beliefs about right and wrong? Do you believe there are some universal ideals accepted by all? This will no doubt be a theme running through your study of business ethics, and here is where ethical theory can begin to be helpful (Fryer 2016). Let’s start with the idea that it is possible to discern just one way of looking at right and wrong; that is, ethical objectivism, or absolutism, versus the subjective, context- specific approach of relativism.

Ethical absolutism. On one side of the spectrum would be a position of ethical absolutism, which claims that there are eternal, universally applicable moral principles. According to this view, right and wrong are objective qualities that can be rationally determined, irrespective of the circumstances.

Ethical relativism. The other extreme would be a position of relativism, which claims that morality is context-dependent and subjective. Stemming in part from anthropological studies of culture, relativists tend to believe that there are no universal right and wrongs that can be rationally determined—it simply depends on the traditions, convictions, or practices of those making the decision. In business ethics studies, the notion of relativism occurs frequently in international business issues, where it is argued that a moral judgement about behaviour in another culture cannot be made from outside because morality is culturally determined. Ethical relativism is different from descriptive relativism: while the latter merely suggests that different groups have different ethics, the former proposes that both sets of beliefs can be equally right. Ethical relativism, as we use it here, is still a normative theory (Gowans 2018).

THINK THEORY

Think about the concepts of absolutism and relativism in the context of bribery. How would each theory conceptualize the problem of bribery and what course of action might they suggest for someone faced with a corrupt official?

Visit the online resources for a suggested response.

Most traditional Western modernist ethical theories tend to be absolutist in nature. They seek to set out universal rules or principles that can be applied to any situation to provide the answer as to what is

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right or wrong. Contemporary ethical theories provide us with some alternative perspectives on ethical theory. They often tend towards a more relativistic position. However, in the course of this chapter we want to show that, for the practical purposes of making effective decisions in business, both of these positions have limitations.

Our position is one of ethical pluralism. This is something of an alternative approach to absolutism and relativism. A pluralist approach accepts that we ought to recognize that incompatible values can be equally legitimate and tolerate them as such (Liu 2018). According to Elinor Mason (2018), pluralism thus differs from (a straightforward understanding of) relativism and absolutism in that it neither puts all ethical perspectives on an equal footing, nor favours one approach over others. Irene Liu (2018) notes that ‘a worry for pluralism is that it is overly tolerant. Some ways of life, practices, institutions, or traditions really are deeply misguided, and in their cases, tolerance is inappropriate.’ The potential of radical conflict between logical theoretical perspectives is an inevitable part of pluralism and has to be addressed. We take inspiration from Nobel Prize-winning economist and philosopher Amartya Sen (2000), who acknowledges the profound complexity of the changing world and the value therein of a pluralist approach rather than seeking a universal general theory. He argues that pluralism allows an important openness and sensitivity to new realities.

Ethical theories, as we shall show, can help to clarify different moral presuppositions of the various parties involved in a decision— one person may tend to think in terms of one theory, while another might think in terms of a different theory. In making good business decisions, we need to understand this range of perspectives in order to establish a robust and defensible decision on the solution to ethical problems (Fryer 2016). The primary value of ethical theories lies in the fact that they help to rationalize, explain, and understand the hunches or gut feelings we all have about what is right or wrong. Furthermore, they make it possible to engage in a rational discourse between individuals whose moral values are different from each other.

Though our core focus in this chapter is on European and North American approaches, we acknowledge that there is a growing debate and literature on African, Asian, and Latin-American perspectives on business ethics. Confucian ethics (Kennedy, Kim, and Strudler 2016), for example, has received a growing amount of attention in recent years, and so, as we mentioned in Chapter 1, has the African Ubuntu ethics (Naude 2017). There are many more ethical theories which help to balance the theories presented here.

As we indicated in Chapter 1, there is of course a wealth of ethical thinking in business. One of the arenas we have not yet discussed in any detail is the role that religion can play in offering an ethical framework, which we noted above is both descriptive and normative ethical theory. Religion is not a key element of our book or approach, but for some it is an important influence in deciding on ethical practice, so we briefly introduce this perspective here.

Before we proceed with some tricky ethical theory, let’s pause to hear from Dr Nolywé Delannon, who is living business ethics through her important work giving voice to the marginalized in society in Practitioner Spotlight 3. As you learn about theory, it is worth keeping in mind how very practical trying to ‘make a difference’ is, and how the theory can help you to structure your ideas and be more effective in achieving change. We will come across other such ethically inspired entrepreneurs in Ethics in Action 7.1: When saving the world is your day job.

PRACTITIONER SPOTLIGHT 3 Inspiring ethics leaders of tomorrow

Photo credit: Sébastien St-Jean/Agence QMI

Business and management schools are often critiqued for promoting short-term thinking over a longer-term and more sustainable orientation. But exactly how do we embed business ethics within business and management scholarship? We spoke to Nolywé Delannon, Ph.D., Assistant Professor at Université Laval in Québec, Canada to learn more about how her teaching and research is driving more equitable and inclusive societies.

Please can you tell us a bit about how your current job role connects with business ethics? As a professor of International Management in a business school, I aim to fuel conversations on business ethics with students who would not have necessarily attended a class dedicated to the topic. Also, as a researcher and a citizen, I choose the phenomena and challenges I want to research based on my commitment towards issues of business ethics and CSR. For example, until recently I was sitting on the board of a non-partisan political organization for four years— including two as president—and defended young workers’ rights and intergenerational equity in Canadian public policy. Ethics and CSR have always guided my public interventions. And as I continue to get invited to address a variety of audiences on issues related to equality and inclusion, I strongly rely on my expertise in CSR to discuss and challenge business–government–civil society relations.

What practical skills are needed to do your job? In a way, I see myself as an entrepreneur; a knowledge entrepreneur. This means that I have to be creative and persistent, to be a multi-tasker, while remaining clear on my limitations in order to know when to search for resources. In fact, being an engaged scholar means navigating different worlds and striving to be both rigorous and relevant; to act as a translator. More challenging, it also means being continuously exposed to criticism from perspectives that are hardly reconcilable. In such a context, my most practical skills are certainly my optimism and my ability to believe so hard in what I do that I keep my eyes on the horizon even when I stumble and fall.

What has been your career path to date? My pathway towards sustainability was far from linear. Being born and raised in French Guiana, a territory 95% covered by the Amazon forest and long protected by traditional knowledge and practices, certainly infused me with the belief in the strong interconnectedness between the environment, society, and the economy. But I was trained in political science and international relations, and I only came to fully realize and formalize my engagement towards sustainability while undertaking graduate studies. I then briefly worked in a consulting company specialized in the facilitation of business–local community relations in major infrastructure projects in Canada. This professional experience was a true revelation for me and I decided to undertake a Ph.D. in Management with a specialization

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in CSR, more specifically looking into how business interacts with marginalized stakeholders around sustainability issues.

What are the key benefits and challenges of your role from an ethical perspective? One of the key benefits of being a scholar is being able to take advantage of academic freedom. I can publicly discuss issues that I consider important without having to worry about sanctions from my institution. This is a rare privilege and I believe it comes with tremendous responsibility to speak up on important and sometimes difficult societal issues. As regards challenges, I would say that relevance is one that haunts me. How can I make sure that my work, both research- and teaching-wise, actually has some impact, at a very local scale? This is one of the reasons why I have chosen to dedicate significant time to contributing to public debate and policy. Recently appointed by the Québec government to a working group on the collaborative economy, I rely on my expertise in CSR to conduct wide consultations with businesses, non-profits, and civil society organizations to inform public policy.

If you could change one big world issue, what would it be? As we are seeing increasing divides within contemporary societies at a global scale, I consider mis- and under-representation of the marginalized as a big world issue that should be addressed with no delay. By the term ‘marginalized’, I refer to individuals, collectives, as well as territories that are either absent, minored, or silenced. We can naturally think of migrants and refugees that are the target of growing populist movements across Europe and North America. But we can also think of Indigenous people, racialized people, and precarious workers—groups among which women tend to be over-represented—whose voices are seldom heard first-hand. I believe that we, as academics and practitioners of business ethics, should constantly challenge ourselves to become more inclusive in both our discourse and practice.

SOURCES https://www.ulaval.ca https://www4.fsa.ulaval.ca/enseignants/nolywe-delannon https://postmedia.us.janrainsso.com/static/server.html? origin=https%3A%2F%2Fmontrealgazette.com%2Fbusiness%2Fnew- committee-to-study-airbnb-uber-and-others-in-review-of- sharing-economy

Visit the online resources for more Practitioner Spotlight interviews.

NORMATIVE ETHICAL THEORIES AND RELIGION Religious teaching about ethics and normative ethical theory from philosophy both tend to have the same aim when applied to business, namely how to decide what is the right thing to do when faced with moral problems in commerce. Both are therefore focused on ensuring that business is responsible, avoids doing harm, and contributes to societal benefits. However, there are two main differences between the approaches:

Source of rules and principles. Religions typically invoke a deity or an organized system of belief (e.g. the teachings in the Qu’ran or the Talmud) as the source of determining right and wrong. Faith is considered the critical requisite for acting ethically. Philosophical theories, on the other hand, are based on the belief that human reason

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should drive ethics. Thus according to philosophical perspectives, rationality is the critical requisite for acting ethically.

Consequences of morality and immorality. In religious teaching, there is an important element of spiritual consequence for the decision-maker. These consequences might include salvation, enlightenment, reincarnation, or damnation.

Of course, different religions often have very different things to say about how to go about achieving the goals of ethical business. One example of religious observance for followers of Judaism, for example, is specific periods of abstinence from economic activity. In Jerusalem, this has given rise to a long-running ‘Sabbath war’ between secular and orthodox residents over whether shops, cinemas, and bars should remain open on the Jewish day of rest (Dunn and Jensen 2018). Islam also provides certain rules about appropriate business practices which has given rise to a distinct system of banking consistent with the principles of Sharia Law that forbid the charging of interest, part of a wider approach to Islamic finance (Hussain, Shahmoradi, and Turk 2016) that we shall discuss in Chapter 6.

In many parts of the world, the influence of religious principles is less direct, but they continue to shape business conduct, even if most economic actors are not devout followers. One such example that has its roots in the Protestant denomination of Christianity is the Protestant Work Ethic, as developed by German Sociologist Max Weber (1905). His position is that ‘egalitarian principles, a disdain of leisure activities, and the belief in the importance of hard work were responsible for economic successes seen in the USA and Europe during the turn of the twentieth century’ (Zabel et al. 2017: 301). These days the link to Christianity is almost entirely gone, with conceptualizations of the Work Ethic in other religions and none. For instance, Selcuk Uygur has extended this perspective to develop ideas around an Islamic work ethic, which he finds gives moral energy to small business owners in Turkey who are committed Muslims (Uygur et al. 2017).

Clearly, religion is an important part of life for some individuals. Nevertheless, we would not want to overemphasize differences in religious principles when it comes to business. Interfaith groups have long promoted their common cause of improving ethical practices in business. The Interfaith Centre for Corporate Responsibility, for example, seeks to use the collective influence of values-based investors to improve corporate attention to social and environmental issues, regardless of denomination.2 Similarly, the long-standing Interfaith Declaration, an accord between Christian, Jewish, and Muslim leaders, established an influential set of business principles based on commonalities across the religions. It emphasizes their shared commitment to justice, mutual respect, stewardship, and honesty.3 Ultimately, although religious principles continue to be influential on the institutional fabric of economic life, as a descriptive ethical theory their direct sustained effect on business culture and practice is significant in only certain regions of the world. Substantial processes of secularization—i.e. movement towards a non-religious form of organizing—have taken place in workplaces across the globe. As such, normative ethical theories, based on philosophical principles, remain at the cornerstone of business ethics for much of contemporary business.

WESTERN MODERNIST ETHICAL THEORIES

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In Western societies, the ethical theories traditionally regarded as appropriate for application to business contexts are based on philosophical thinking beginning with the Enlightenment in the 18th century. This age is often also referred to as ‘modernity’, as it modernized a lot of traditional thinking dominated by religious approaches throughout the Middle Ages. We refer to these theories, therefore, as ‘Western modernist’. They generally offer a certain rule or principle that one can apply to any given situation—hence, they are absolutist in intention. These theories are normative because they start with an assumption about the nature of the world, and more specific assumptions about the nature of human beings. Consequently, the degree to which we can accept the theory and the outcome of its application to particular business situations depends chiefly on the degree to which we share their underlying assumptions. As they have a rather well-defined rule of decision, the main advantage of these theories is the fact that they normally provide us with a fairly unequivocal solution to ethical problems.

There is a distinct point of division in this group: consequentialist and principle-based theories, which we summarize in Table 3.1 and go on to discuss in more detail below. We have, on the one hand, theories that base moral judgement on the outcomes of a certain action—they are goal orientated. If these outcomes are desirable, then the action in question is morally right; if the outcomes of the action are not desirable, the action is morally wrong. The moral judgement in these theories is thus based on the intended outcomes, the aims, or the goals of a certain action. Consequentialist ethics is often also referred to by the term teleological, based on the Greek word for ‘goal’. We focus on consequentialist theories of ethical egoism and utilitarianism.

On the other hand, we have those theories that base moral judgements on the derivation of principles and the procedure by which they are arrived at. These principle-based theories4 prioritize what is right, rather than what is desirable. These philosophical theories, also called deontological (based on the Greek word for ‘duty’), look at the desirability of principles, and based on these principles, deduce a ‘duty’ to act accordingly in a given situation, regardless of the desirability of the consequences. We focus on the principle-based theories of ethics of duties, and rights and justice.

Table 3.1 Normative theories in business ethics: part one

Ethical egoism

Utilitarianism Ethics of duties

Rights and justice

Leading contributors

Thomas Hobbes Ayn Rand

Jeremy Bentham John Stuart Mill

Immanuel Kant

John Locke Jean-Jacques Rousseau John Rawls

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Ethical egoism

Utilitarianism Ethics of duties

Rights and justice

Key works Leviathan (TH) The Virtue of Selfishness (AR)

An Introduction to the Principles of Morals and Legislation (JB) Utilitarianism, on liberty, considerations on representative Government (JSM)

Foundations of the Metaphysics of Morals (IK)

Two Treatises of Government (JL) The Social Contract (JJR) A Theory of Justice (JR)

Focus Individual desires or interests

Outcomes and collective welfare

Duties Rights and the nature of justice

Guiding tenets

Maximization of desires/self- interest

Act/rule utilitarianism

Respect for autonomy and rational reason (in the form of the Categorical Imperative)

Universalizable rules for the nature of justice. Respect for human beings

Concept of human beings

Humans are objectively obliged to serve their self- interest alone

Humans are motivated by avoidance of pain and gain of pleasure

Humans are rational moral actors with free will

Humans are beings that are distinguished by dignity

Type Consequentialist Consequentialist Principle- based

Principle-based

In the following, we will have a closer look at both families of philosophical theories and analyse their potential for solving various business decisions. In explaining these theories, we will use them to reflect on a particular business problem, as presented in Ethical Dilemma 3. We suggest you read this before continuing with the chapter.

CONSEQUENTIALIST THEORIES

Here we shall look at two main consequentialist theories: Ethical egoism Utilitarianism

These theories address right and wrong by emphasizing the achievement of good goals. However, we shall see that they address those outcomes in different ways—ethical egoism by focusing on the outcomes and self-interest for the individual decision-maker, utilitarianism by focusing on the wider social outcomes within a community.

Ethics of self-interest: ethical egoism

Egoism is one of the oldest philosophical ideas. It was already well known and discussed by ancient Greek philosophers such as

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Epicurus, but it has a troubled history. There is real controversy around whether egoism has a place among ethical theories (Arnold, Beauchamp, and Bowie 2014; Gert and Gert 2017). Whereas the other Western modernist theories we address here are pretty standard in business ethics textbooks, ethical egoism quite often does not get mentioned at all, and is dismissed implicitly as offering no ethical insights of value (see, for example, Boatright 2014; Fryer 2015, and unsurprisingly, Bowie 2017 in his Kantian take on business ethics). The controversy lies in the focus in egoism on self-interest, such that the only obligation for a person, or by extension a business, is self- promotion.

Psychological egoism focuses on self-interest as a type of motivation that is the explanation of human conduct. Here we are more concerned with ethical egoism. In an early narrow perspective on this, Greek philosopher Epicurus (341–270 BC) was an example of a hedonist, being of the view that pleasure is the ultimate good and should be pursued for its own sake (Shaw and Barry 2016). This, however, is just one version of egoism.

The most commonly acknowledged protagonist of ethical egoism is probably political philosopher Thomas Hobbes (1588–1679). He had a rather pessimistic view of human nature, such that without strong preventative measures, he believed that in a state of nature (society without any systems, controls, or government), anarchy and chaos would result (Arnold, Beauchamp, and Bowie 2014: 15). In one of his key texts, Leviathan, he called this ‘the war of all against all’ (Plamenatz 1967: 24). This may seem fanciful, but it is worth remembering that he was deeply influenced by the violence of the English Civil War in the 1640s, during which it must indeed have seemed that everyone was against everyone else. Ultimately, Hobbes argued that it was best for everyone—every individual’s self-interest —to be governed by some impartial rules. We will come back to this later, but for now, Hobbes’ contribution to understanding ethical egoism is that no person has a moral obligation to others beyond things which serve their own interest.

A more recent but no less controversial protagonist of ethical egoism is Ayn Rand (1905–82). Diametrically opposed to altruism, she believed ferociously in individualism as being at the heart of every human being (Machan 1999). According to Ayn Rand, who grew up during the Russian Revolution before emigrating to America, objectivism is key to ethics and we are each responsible for our own happiness, self-development, and self-perfection. Rand (1964) promoted the idea of a virtue of selfishness (she was also influenced by Aristotle, who we will come to later).

Moving closer to the field of business, other writers, such as the economists Adam Smith (1723–90) and Milton Friedman (1912– 2006), have somewhat retrospectively been associated with egoism via their defences of capitalism and the free market (Arnold, Beauchamp, and Bowie 2014), though this again is disputed. Friedman promoted the idea that the responsibility of the business leader is to fulfil fiduciary duties to shareholders (‘the business of business is business’ (Friedman 1970)). Smith, who was also a philosopher, believed in freedom and cooperation to ensure flourishing. He argued that this results in the promotion of the public good, as long as there are sufficient rules to protect the public, and that we can each participate in a coherent society. Leading business ethics protagonist on the work of Adam Smith, Patricia Werhane (1989), has argued convincingly that by understanding his economic work, The Wealth of Nations (1776), alongside his philosophical work, The Theory of Moral Sentiments (1759), we can understand his approach as inherently social, whereby we are each accountable to,

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and therefore regulated by, others. Indeed the subtitle of Smith’s philosophical work gives a clue in this direction: ‘An Essay Towards an Analysis of the Principles by which Men (sic) Naturally Judge Concerning the Conduct and Character of their Neighbours, and Afterwards of Themselves’ (emphasis added). Like Ayn Rand after him, Smith identified desirable virtues but, as well as self-interest, they include prudence, benevolence, and justice (Bevan and Werhane 2015; Werhane 1989). Neither Smith nor Friedman advocated the kind of ethical egoism that Hobbes or Rand proposed, devoid of benevolence or sympathy. It is also worth recalling that Friedman directed his work towards publicly traded companies, Smith primarily to privately owned businesses, so neither captures all aspects of the wider business population—which as we saw in Chapter 1 encompasses a range of organizational forms. At the very least, there is disagreement about the central messages in both Friedman and Smith’s work. At worst, these important figures in economic history have been misappropriated by those seeking credibility in promoting a neoclassical economic agenda, driven by ethical egoism.

Ethical egoism A theory that suggests that an action is morally right if in a given situation all decision-makers freely decide to pursue either their (short-term) desires or their (long-term) interests.

ETHICAL DILEMMA 3 Producing toys—child’s play?

You are the product manager of a confectionery company that includes small plastic toys with its chocolate sweets. Having met a potential Thai manufacturer of these toys at a trade fair in Europe, you now visit the company in the north-eastern part of Thailand to finalize a two-year supply contract. Arriving there and talking to the sales manager, you are able to arrange a deal that supplies you with the toys at a third of the cost currently charged by your Portuguese supplier, but with equivalent quality and supply arrangements.

In order to check the reliability of the manufacturing process you ask the manager to show you around the place. You are surprised to find out that there is no real workshop on the premises. Rather, the production process is organized such that at 6am, about 30 men line up at the company’s gate, load large boxes with toy components on their little carts or motor- scooters, and take the material to their homes.

Your prospective supplier then takes you to one of these places where you see a large family, sitting in a garage-like barn assembling the toys. Not only are the mother and father doing the job, but also the couple’s six children, aged five to 14, who are working busily—and from what you see, very cheerfully—together with the parents, while the grandmother is preparing the food in an adjacent room. In the evening, at around 8pm, the day’s work is done; the assembled toys are stored back in the boxes and taken to the workshop of the company, where the men receive their payment for the finished goods. At the end of the week, the toys are shipped to the customers in Europe.

As you have never come across such a pattern of manufacturing, your Thai partner explains to you that this is a very common and well-established practice in this part of the country, and one that guarantees a good level of quality. Satisfied, you tell the Thai manager that you will conclude the administrative issues once you get back home, and you leave the company offices happy in the knowledge of the cost savings you are going to make, and quietly confident that it will result in a healthy bonus for you at the end of the year.

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On your way back, while buying some souvenirs for your five- and seven-year-old nieces at the airport, you suddenly start wondering if you would like to see them growing up the same way as the child workers that you have just employed to make your company’s toys.

QUESTIONS

1. Reading the case and putting yourself in the role of the product manager, what would your immediate gut reaction be?

2. Based on your spontaneous immediate decision, can you set out the reasons for your choice? Also, can you relate those reasons back to some underlying values or principles that are important to you?

It is important to distinguish egoism based on desire from selfishness. Whereas the egoist can be moved by pity for others, the selfish person is insensitive to the other. So, for example, a firm donating to charity to improve the reputation of the company can be in line with an egoistic philosophy, whereas ignoring the charity and spending the funds on a self-promotional advertising campaign that has the same effect on reputation would be more about selfishness.

Within moral philosophy, an important criticism of egoism based on desire is that it renders patently different approaches to life as being equivalent; therefore, the life of the student who just gets drunk every night in the bar is as admirable as the student who works hard for a first-class degree, providing both followed their desire. Therefore, within this school of philosophy, an egoism based on the pursuit of interests is the ultimate rendering of this concept (Graham 1990). The idea of interests based on the pursuit of one’s long-term well-being enables us to distinguish between the life of the hard- drinking student and that of the hard-working student. In this formulation, a gap opens up between desire (or longing) and what is in one’s ultimate interests, such that it is not in the interest of the drinking student to give in to immediate desires. An egoism based on interests therefore approaches the idea of objective value—as in, that one way of acting is objectively better or ‘more ethical’ than another.

This leads to the notion of ‘enlightened egoism’, which is quite often discussed in the context of business ethics. We have come across it already in Chapter 2 when discussing ‘enlightened self- interest’. Corporations might invest in the social environment, for instance, by supporting schools or sponsoring a new ambulance for the local health service, because an improved level of social services is in the interest of workforce retention and satisfaction.

If we apply the theory of egoism to the case in Ethical Dilemma 3, we would have to look at the actors involved and analyse whether they freely pursue their own desires or interests in engaging in the deal. This certainly applies to the manager and his Thai partner, and by the looks of the case, it could also apply to the parents of the family business. As for the children, it could be that they are quite happy to help the parents and just take it for granted that things work like this in their world. From this perspective, an egoistic look at the situation might consider the deal as morally acceptable. Is it in the children’s long-term interest to engage in this type of work?: although one could argue that it prevents them from being forced into far less desirable forms of work, moral concerns arise when considering that this type of work prevents them from gaining a decent education, enjoying time for play, and exposes them to fairly long working hours, all of which casts doubt on whether they really are able to

freely pursue their own interests. The latter considerations then would tend to suggest that from an egoistic point of view this action might be immoral.

It does not take much thought to discover certain weaknesses in egoist ethics. To begin with, this theory works fine if there is a mechanism in society that makes sure that no individual egoist pursues their own interests at other egoists’ expense. In Adam Smith’s thinking, this mechanism would be the free market. Although we can see that the market usually works quite well, there are numerous situations of ‘market failure’, where this does not seem to be the case, and where the egoism of single actors leads to unfavourable results (Moriarty 2017). Current concerns about growing income inequality, for example, are fuelled by the idea that markets are not functioning perfectly and we thus witness a heavily skewed distribution of wealth to the top 1% of earners in society. Another example would be the sustainability debate: the victims of today’s resource depletion or global climate change are future generations, which are not yet present to take part in any kind of market. This clearly shows some initial limitations of egoist theory.

To conclude where we started this section, some do not see ethical egoism as a moral theory at all (Shaw and Barry 2016). Egoism, it is argued, cannot be a moral theory because it is internally inconsistent, since each person pursues their own self-interest and must accept that others do too, despite the fact that this is not in their own self-interest. It also condones blatant immoral wrongs, since ‘anything goes’— violence against the vulnerable, theft, even murder—as long as the egoist’s needs are served. This is perfectly illustrated in Ethics on Screen 3, Baby Driver, in which extreme egoism leads to the annihilation of a group of criminals. While the other ethical theories we discuss here are all subject to disagreement and debate, they each are more consistently accepted as a legitimate approach to business ethics than ethical egoism despite, some would argue, the observable presence of egoistic practice in some sectors of business, not least the financial markets, as nicely depicted in Ethics on Screen 6, The Big Short.

Ethics of outcomes: utilitarianism

The philosophy of utilitarianism has been one of the most commonly accepted ethical theories in the Anglo-Saxon world. We have yet to come across a business ethics book which does not include it. It is linked particularly to the British philosophers and social reformers Jeremy Bentham (1748–1832) and John Stuart Mill (1806–73), and has been influential in modern economics in general. Bentham and Mill believed that being ethical meant doing that which has good outcomes for all people (Shaw and Barry 2016: 61).

The basic foundation of utilitarianism is the ‘greatest happiness principle’. This is the ultimate consequentialist principle as it focuses solely on the consequences of an action, weighs good outcomes against bad outcomes, and encourages the action that results in the greatest amount of good for everyone involved. Unlike egoism, it does not only look at each individual involved, and ask whether their individual desires and interests are met, but it focuses on the collective welfare that is produced by a certain decision.

Utilitarianism A theory which states that an action is morally right if it results in the greatest amount of good for the greatest amount of people affected by the action.

The underlying concept in utilitarianism is the notion of utility, which Bentham sees as the ultimate goal in life. Humans are viewed

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as hedonists, whose purpose in life is to maximize pleasure and minimize pain. In this hedonistic rendition of utilitarianism, utility is measured in terms of pleasure and pain (the ‘hedonistic’ view). Other interpretations of utility look at happiness and unhappiness (the ‘eudemonistic’ view), while others take a strongly extended view that includes not only pleasure or happiness, but ultimately all intrinsically valuable human goods (the ‘ideal’ view). These human goods would typically include aspects such as friendship, love, trust, etc. The latter view in particular makes utilitarianism open to a great number of practical decision situations and prevents it from being rather narrowly focused on pleasure and pain only. Table 3.2 summarizes some of the essential characteristics of the classical version of utilitarianism.

Table 3.2 Essential characteristics of utilitarianism

Characteristic Description Consequentialism It is the measurement of the

consequences of an action which determine if it is ethically correct. Hence utilitarian is a teleological theory.

Hedonism Utility is identified by pleasure and the absence of pain. Only pleasure is ultimately good, but the amount of pain can be deducted from the amount of pleasure to yield the ‘net pleasure’.

Maximalism A right action doesn’t only have some good consequences, but the greatest possible amount when bad consequences are also taken into account.

Universalism Consequences for everyone need to be considered.

Source: Adapted from Boatright (2014)

Utilitarianism has been very powerful, since it puts at the centre of the moral decision a variable that is very commonly used in economics as a parameter that measures the economic value of actions: ‘utility’. Regardless of whether one accepts that utility really is quantifiable, it comes as no surprise to find that utilitarian analysis is highly compatible with the quantitative, mathematical methodology of economics. So, in analysing two possible options in a single business decision, we can assign a certain utility to each action and each person involved, and the action with the highest aggregate utility can be determined to be morally correct. Ultimately, utilitarianism comes close to a pain-pleasure version of what we know as cost- benefit analysis.

Typical situations where a utilitarian approach can be very helpful are analyses of proposed initiatives, such as social and environmental impact assessments of mining or infrastructure projects. These assessments take into consideration all of the likely positive and negative impacts of a given project, including the impact on employment, community development, and environmental quality, with a view to determining whether the project will have an overall benefit to society. For example, in most developed countries new mining projects are controversial, placing a burden (‘pain’) on the local community and environment, but providing financial benefit to shareholders and employees, and resource availability to consumers (‘pleasure’). In the initial process of permit provision, and latterly an arbitration process by the World Bank, one such example is the

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progress of Europe’s largest proposed gold mine around the town of Rosia Montana in Romania. Studies have demonstrated the likelihood of significant social, environmental, and cultural damage. Repeated mass protest movements have arisen in the country after one Romanian Government in 2013 sought to secure the development of the mine, while a subsequent Government in 2017 applied for UNESCO heritage status to protect the land from development. This resulted in Canadian mining company Gabriel Resources claiming $4.4bn damages, and the World Bank arbitration process (Buckley 2017).

Table 3.3 Example of a utilitarian analysis

Action 1: doing the deal

Action 2: not doing the deal

Pleasure Pain Pleasure Pain Product manager

Good deal for the business; potential for personal bonus

Bad conscience; possible risk for company reputation

Good conscience; less risk

Loss of a good deal

Thai dealer Good deal

Loss of a good deal; search for a new customer in Europe

Parents Secure the family’s income

Limited prospects for children

Search for other sources of income

Children Feeling of being needed, being ‘grown up’; approval of the parents

Hard work; no chance of school education

No hard work; time to play and go to school

Potentially forced to do other, more painful work

Grandmother Family is able to support her

Loss of economic support

If we apply this theory to the situation described in Ethical Dilemma 3, we first have a look at all the stakeholders concerned and analyse their potential utility in terms of the pleasure and pain involved in different courses of action, either going ahead with the deal (action one) or not doing the deal (action two). We could set up a simple balance sheet, such as that depicted in Table 3.3.

After analysing all of the good and bad effects for the persons involved, we can now add up ‘pleasure’ and ‘pain’ for action 1, and the result will be the utility of this action. After having done the same for action 2, the moral decision is relatively easy to identify: the greatest utility of the respective actions is the morally right one. In

our hypothetical case, the decision would probably go in favour of action 1 (doing the deal) as it involves the most pleasure for all parties involved, whereas in action 2 (not doing the deal), the pain seems to dominate the analysis.

This example demonstrates some of the complications with utilitarian analysis. Proponents and critics of proposed practices can both summon a host of benefits and harms to support their cases, making any comparative assessment difficult. Case 3, for example, elaborates the controversies around the exploration of the oil sands in Canada, where a longstanding debate on the pros and cons of development has so far not led to a conclusive outcome; this points to some core problems with utilitarianism:

Subjectivity. Clearly when using this theory you have to think rather creatively, and assessing such consequences as pleasure or pain might depend heavily on the subjective perspective of the person who carries out the analysis. Contemporary Australian utilitarian philosopher Peter Singer argues, somewhat controversially, that when calculating who is affected by an act, animals should be included in the calculations on equal footing with humanity (Singer 2011). So the subjective question of who/what is incorporated into the calculation is just as important as the decision about what the consequence is likely to be for them. If it is hard to make these choices for humans, imagine the challenges of doing so for non-human species.

Equal weighting. While there are subjective choices to be made in applying utilitarianism, according to the principle of universalism, all must be included and equal weight needs to be given to all concerned. Thus we must neither exclude nor prioritize ourselves: our own pain or pleasure—or that of those nearest to us—has equal weight to everyone else’s. This means that a business manager has equal responsibility to include the welfare of distant community members of their suppliers as they do their employee’s welfare or even their own employment.

Problems of quantification and calculation. Similarly, it is quite difficult to assign costs and benefits to every situation, and in business terms, apply monetary values. In the example, this might be quite easy for the persons directly involved with the transaction, but it is certainly difficult to do so for the children involved, since their pleasure and pain is not quantifiable. Especially in these cases, it might be quite difficult to weigh pleasure against pain: is losing a good contract really comparable to forcing children into labour? Similarly, under utilitarianism, health and safety issues in the firm require ‘values’ of life and death to be quantified and calculated, without the possibility of acknowledging that they might have an intrinsic worth beyond calculation. What monetary value is the right one to put on the experience of childhood?

Distribution of utility. Finally, it would appear that by assessing the greatest good for the greatest number, the interests of minorities are overlooked. In our example, a minority of children might suffer so that the majority might benefit from greater utility. We might also think about the distribution over the long and short term. A decision to pollute might maximize short-term utility for current generations but if future generations are taken into account, the outcome would be completely different.

Of course, utilitarians were always aware of the limits of their theory. The problem of subjectivity, for example, led to a refinement of the theory by John Stuart Mill, differentiating between what has been defined as ‘act utilitarianism’ and ‘rule utilitarianism’:

Act utilitarianism looks to single actions and bases the moral judgement on the amount of pleasure and the amount of pain this single action causes.

Rule utilitarianism looks at classes of action and asks whether the underlying principles of an action produce more pleasure than

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pain for society in the long run.

Our utilitarian analysis of Ethical Dilemma 3 used the principle of act utilitarianism by asking whether just in that single situation the collective pleasure exceeded the pain inflicted. Given the specific circumstances of the case, this might result in the conclusion that it is morally right, because the children’s pain can be considered small, given the fact, for instance, that they might have to work anyway or that school education might not be available to them. From the perspective of rule utilitarianism, however, one would have to ask whether child labour in principle produces more pleasure than pain. Here, the judgement might look considerably different, since it is not difficult to argue that the pains of child labour easily outweigh the mainly economic benefits of it. Rule utilitarianism then relieves us from examining right or wrong in every single situation, and offers the possibility of establishing certain principles that we then can apply to all such situations. These tend to be along the lines of ‘don’t kill’, ‘don’t bribe’, and ‘don’t break promises’, and support the idea that rules have a central position in society that can’t be compromised even by particular circumstances (Arnold, Beauchamp, and Bowie 2014). The focus on rules comes up again in the principle-based theories we discuss next.

PRINCIPLE-BASED THEORIES

Another branch of traditional ethical theory is principle-based theories. Here we shall look at two main types of principle-based ethical theories that have been traditionally applied to business ethics:

Ethics of duties Ethics of rights and justice

These approaches stem from assumptions about basic universal principles of right and wrong. However, while rights-based theories tend to start by assigning a right to one party and then advocating a corresponding duty on another party to protect that right, ethics of duties begin with assigning of the duty to act in a certain way.

Rights and duty have also been central to many religious perspectives on business ethics, and remain important influences on business decision-makers worldwide, especially in regions with high rates of religious adherence, such as Latin America, the US, the Middle East, and Africa. Such approaches start from the basis of divine revelation, as found, for instance, in the religious tracts of the three monotheistic religions of Judaism, Christianity, and Islam, which ascribe enduring duties of humans to God, or conversely, ‘God-given rights’. In such a revelation of what is right or wrong, human behaviour has its divine, eternal validity—regardless of whether the outcomes in a given situation are in anybody’s self-interest (egoism) or result in more pleasure or pain (utilitarianism), as consequentialist approaches would suggest. In secular societies, the ideas of rights and duties are equally strong and have been enshrined in various norms and laws, including everything from a doctor’s duty of care to a citizen’s right to privacy.

Ethics of duties: Kantianism

In business ethics, the most influential theory to come from the perspective of ethics of duty derives from the work of the German philosopher Immanuel Kant (1724–1804). Kant’s impact on ethics can’t really be underestimated. For many (whether they know anything of moral theory or not) ethics is basically what Kant determined it to be (MacIntyre 1967: 190). Like the utilitarians, Kant was strongly influenced by the European Enlightenment times in which he lived (Fryer 2015).

Kant argued that morality and decisions about right and wrong were not dependent on a particular situation, let alone on the consequences of one’s action. For Kant, morality was a question of certain abstract and unchangeable obligations—defined by a set of a priori moral rules—that humans should apply to all relevant ethical problems. Kant was convinced that human beings do not need God, the church, or some other superior authority to identify these principles for ethical behaviour. In his thesis, mainly published in the Foundations of the Metaphysics of Morals (1785), he saw humans as rational actors who had free will to make their own choices and could decide these principles for themselves. Hence, humans could also be regarded as independent moral actors who made their own rational decisions regarding right and wrong.

Kant fervently argued that motivation matters, and that duty lies at the heart of morality. Choices made that are driven by sentiment (physical or emotional drivers) are not morally correct. Kant didn’t look to a commonplace understanding of duty—that you should do what your teacher/parent/boss tells you—but a duty which is derived from a commitment to do the right thing for the sake of the moral law. He carefully defined and reformulated the moral law over his lifetime. Kant argued that acting from principle in this way was a uniquely human characteristic (Shaw and Barry 2016: 67).

Ethics of duty Ethical theories that consist of abstract, unchangeable obligations, defined by a set of rationally deduced a priori moral rules, which should be applied to all relevant ethical problems.

Kant subsequently developed a theoretical framework through which these principles could be derived, called the categorical imperative or unconditional moral law, that must be obeyed in all circumstances. By this, he meant that this theoretical framework should be applied to every moral issue regardless of who is involved, who profits, and who is harmed by the principles once they have been applied in specific situations.

Categorical imperative Act only according to that maxim (principle or rule) by which you can at the same time will that it should become a universal law.

Kant helpfully developed different aspects of the categorical imperative which make it a little easier to understand and use, as

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shown in Table 3.4.

Table 3.4 Key formulations of the categorical imperative

Element Thinking Examples and implications Universal acceptability

Accept a moral law only if all rational beings can also embrace it

Without exception, the same rules apply in all circumstances. Failure to repay debts is not universalizable because if it became commonplace, no-one would lend money; lying not universalizable, because if everybody were allowed to lie, the entire notion of ‘truth’ would be impossible, and an organized and stable human civilization would not be imaginable.

Respect for persons

Treat humanity as an end, never merely as a means to an end

Humans deserve respect as autonomous, rational actors, and this essential human dignity should never be ignored. Businesses use people as means; they employ them or pay them to provide us with goods or services. However, this does not mean we should only treat them as means to achieve what we want and just forget about their own needs and goals in life (e.g. health, personal fulfilment, education, a good standard of living), and their expectations to make their own choices.

If we look again at Ethical Dilemma 3 and try to determine whether it is ethical from a Kantian perspective:

According to the idea of universal acceptability, the first question would be to ask if we would want everybody to act according to the principles of our action in all circumstances. Obviously, as the product manager you are already uncomfortable about applying the principle of exploiting child labour from a third-world context to your own family back home in Europe. You probably would not like this to become a law that is consistently applied, which would then suggest that this activity could be deemed immoral on the basis that it is not universally acceptable.

Regarding the principle of human dignity, it is questionable whether the children have freely and autonomously decided to work. By making use of their labour, you could be said to be largely treating them as cheap labour for your own ends rather than as ‘ends in themselves’, suggesting that their basic human dignity was not being fully recognized and respected.

Kant’s theory has been extensively examined in relation to business (Bowie 2017), and even just the key elements we have highlighted here (a thumbnail sketch from Kant’s lifetime of thinking) can be very helpful in practical situations and have had a considerable influence on business ethics thinking. For example, in Chapter 2 we discussed the stakeholder concept of the firm. Evan and Freeman (1993) argued that the ethical basis of this concept has been substantially derived from Kantian thinking. Hence, in order to treat employees, local communities, or suppliers not only as means, but also as constituencies with goals and priorities of their own, Evan and

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Freeman suggest that firms have a fundamental duty to allow these stakeholders some degree of influence on the corporation. By this, they would be enabled to act as free and autonomous human beings, rather than being merely factors of production (employees) or sources of revenue (consumers), etc.

While terminology like duty, freedom, choice, respect, and rational decision-making is commonplace in business life, understanding these perspectives from a Kantian point of view would no doubt increase the integrity of business practice no end.

THINK THEORY

Stakeholder theory has also been considered from other theoretical perspectives. How would you apply utilitarianism, for instance, to the concept of stakeholder theory? Do you think that the two different perspectives would suggest different obligations towards stakeholders?

Visit the online resources for a suggested response.

There are, however, also problems with Kantianism: Undervaluing motivation. Kant’s emphasis that the only morally

acceptable motivation for a certain act is to do one’s duty for its own sake, as defined by the categorical imperative, is a little extreme. Imagine a business manager who agrees to pay a new minimum wage because they know employees are struggling financially versus a business manager who agrees to pay the same minimum wage because she uses her free will to reason that it is her duty according to the categorical imperative (and she always does her duty for its own sake). The result is exactly the same in each case, but the first business manager is not considered morally worthy whereas the second one is. We discuss the place of motivations in ethical decision-making more in Chapter 4. In a related way, what if the act goes far beyond duty according to Kant? This is sometimes called a supererogatory act. Could we really say it was unethical for a nurse to stay well beyond his shift to comfort a dying patient, or for a manager to work through a public holiday herself so that her staff can take the holiday, even though they would normally be expected to work?

Undervaluing outcomes. Given that this approach is based on duty, not outcomes, Kant does not allow for cases where a little rule-bending might be for the best. An oft-cited example is reflection on whether it is really justifiable to stick to the duty not to lie when an innocent person’s life is at stake. When a drugs gang are mistakenly after someone, for instance—would it be right to tell the gang where the person is hiding? In a business context, is it acceptable for a new start-up business to cut a few corners on what is ethical and use their family members as a means of free labour to help them get their business off the ground? If the business is successful, a utilitarian would say using others as a means to your own ends in this way is justifiable, on the basis that many people will ultimately benefit.

Assumption of rationality. Kant’s theory is quite optimistic: his view of humans as rational beings who act according to self-imposed duties seems more of an ideal than a reality with regard to fast-paced contemporary lifestyles. Even if some can muster the rational autonomy and free will to attend to the categorical imperative, what about others who are not in a position to make such decisions? Are children, whose reasoning faculties are still developing, or those who may struggle for

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whatever reason to maintain a rational thought process, incapable of being ethical? Given the complexity of life, not least business, can any of us expect to work calmly through the categorical imperative before every decision?

All in all, is it reasonable for each individual to take responsibility for their own ethical practice, or are there some systems and structures which pre-determine some element of ethics for us? This is where we turn to the ethics of rights and justice, and social contract theory.

Ethics of rights: human rights

In Chapter 2 we briefly discussed the notion of citizenship in terms of a set of individual rights. Actually, this notion of rights goes back to an entire philosophical school initially linked most prominently to another modernist thinker, the British philosopher John Locke (1632– 1714). He conceptualized the notion of ‘natural rights’, or moral claims, that humans were entitled to, and which should be respected and protected (at that time, primarily by the state). Among the most important rights conceived by Locke and subsequent rights theorists were rights to life, freedom, and property. These have since been extended to include rights to freedom of speech, conscience, consent, privacy, and the entitlement to a fair legal process, among many others. Most people now talk of ‘human rights’ rather than natural rights, with the assumption that all humans, irrespective of their gender, race, religion, nationality, or any other factor, should be able to universally enjoy such rights.

Human rights Basic, inalienable, and unconditional entitlements that are inherent to all human beings, without exception.

The general significance of the notion of rights in terms of an ethical theory lies in the fact that these rights typically result in the duty of other actors to respect them. In this respect, rights are sometimes seen as related to duties, since the rights of one person can result in a corresponding duty on other persons to respect, protect, or facilitate these rights. My right to property imposes a duty on others not to interfere with my property or take it away. My right to privacy imposes a duty on others to refrain from gathering personal information about my private life without my consent. Rights and duties are therefore frequently seen as two sides of the same coin.

This link to corresponding duties reflects some of the aspects we found in Kant’s approach. The main difference is that it does not rely on a complex process of determining the duties by applying the categorical imperative. Rather, the notion of rights is based on a certain axiomatic claim about human nature that rests mostly on various philosophical approaches of the Enlightenment, often backed up by certain religious views, such as the approach of Catholic social thought. Human rights are based on a certain consensus about the nature of human dignity.

Despite its lack of a complicated theoretical deduction—or maybe even just because of its rather simple and plausible viewpoint—the rights approach has been very powerful throughout history and has substantially shaped the constitutions of many modern states. This includes the United States Constitution (1787), which is largely based on notions of rights. After the atrocities of World War II, these ideas also influenced the Universal Declaration of Human Rights (1948), led by Eleanor Roosevelt. This remains a powerful standard of

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worldwide endorsement of various rights and is incorporated into the European Convention on Human Rights (1953).

It is this background that makes the entire notion of human rights one of the most common and important theoretical approaches to business ethics on a practical level. Corporations, especially multinationals, are increasingly judged with regard to their attitude to human rights and how far they respect and protect them. More than 13,100 organizations, for example, have signed up to the UN Global Compact, which includes human rights obligations as its first two principles (see Ethics in Action 11.2). These are that ‘businesses should support and respect the protection of internationally proclaimed human rights’ (Principle 1) and that ‘businesses should make sure that they are not complicit in human rights abuses’ (Principle 2). Many companies are also increasingly seeking to develop their own human rights policies. The Business and Human Rights Resource Centre hosts a useful database of human rights reporting by corporations.5

George Brenkert (2016), in his review of human rights from a business ethics perspective, points out that very little is ever discussed about which human rights businesses are responsible for. There are, after all, around 50 listed in the Universal Declaration of Human Rights, ranging from the choice of parents over their children’s education (not normally the realm of business), to articles specifically related to work, which are more obviously relevant. A couple of business-specific examples include:

Article 12—relating to worker and customer privacy

No one shall be subjected to arbitrary interference with their privacy, family, home, or correspondence, nor to attacks upon their honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.

Article 20—relating to workers and trade unions

(1) Everyone has the right to freedom of peaceful assembly and association.

(2) No one may be compelled to belong to an association. Article 23—relating to work and employment

(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work, and to protection against unemployment.

(2) Everyone, without any discrimination, has the right to equal pay for equal work.

(3) Everyone who works has the right to just and favourable remuneration, ensuring for themself and their family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.

In reality, businesses should and must be clear what their priorities are, though this is tricky, since few would want to admit to not supporting any given human right.

An important initiative intended to change the commitment of business corporations to human rights issues dramatically is the United Nations Guiding Principles on Human Rights (UNGP or ‘Ruggie Principles’ after their author, political scientist John Ruggie). These heralded a renewed corporate focus on human rights in the 2010s and have started to shape the engagement of global businesses with human rights issues, though progress has been slower than hoped, as Ethics in Action 3.1 discusses. The UNGP were adopted by the UN in 2011 and seen as a big step forward in clarifying internationally the responsibility of business in relation to human rights. The principles refer to the three areas of protecting and respecting human rights and remedying violations thereof. Although

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there are crossover responsibilities (e.g. the state takes responsibility for ensuring judicial systems, businesses should be prepared to engage in non-judicial remedies), the responsibilities are primarily directed at:

STATE: The state duty to protect human rights BUSINESS: The corporate responsibility to respect human rights JUDICIARY: Access to remedy for victims of business-related abuses

In more detail, the UNGP states that ‘business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights

impacts with which they are involved’.6 This imperative applies to businesses of any size, structure, sector, or operational context, and requires that they (a) avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur; and (b) seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products, or services, by their business relationships, even if they have not contributed to those impacts. In practice, the expectation is that all businesses, proportionate to size, have a policy commitment to human rights, a due diligence process, and remediation in place for any human rights problems.

Ethics in Action 3.1 Human rights and business: from principles to practice

Lauren Compere, Huffington Post This month marks five years since the adoption of the UN Guiding Principles on Business and Human Rights (UNGPs) —a landmark moment in the acceptance of human rights as not just being a corporate responsibility issue but fundamental to core business practices. The UNGPs define a global standard for preventing and addressing the risk of negative human rights impacts by business activity. However, moving from principles to practice in the last five years has not been easy.

Making good ethics good business The first achievement of the UNGPs has been to make a strong business case to companies to ensure they manage human rights risks. Companies that proactively manage human rights issues benefit from enhanced reputation, increased business opportunities, and reduced exposure to risk, while those that don’t can suffer real value destruction, if and when things go wrong. For example, in 2012, the share price of South African platinum producer Lonmin dropped 30% the week after 34 workers were shot and killed at its Marikana mine. Another powerful example was cited in a 2010 report of then Special Representative of the Secretary-General John Ruggie that helped launch the UNGPs. That report noted that a major oil and gas company experienced an estimated $6.5bn worth of value erosion from ‘non-technical’ risks, such as human rights issues, over a two-year period.

The regulatory environment is tightening In the last five years, we have also seen a greater focus on this issue by regulators, with a trend for putting responsibility for oversight of these risks not only on the shoulders of company management but right through to the boardroom. The UK Modern Slavery Act, enacted in 2015, requires every

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organization conducting business in the UK with a total annual turnover of $36m or more to produce a slavery and human trafficking statement for each financial year of the organization. Organizations are required to publish this statement on their website and include a link to the statement from a prominent place on the website’s homepage.

Investors at risk Investors have also played their part in pushing corporate action from principles to practice since the UNGPs’ adoption. In February 2015, an investor statement in support of the UN Guiding Principles Reporting Framework—a framework for corporate disclosure on human rights—was launched and today has 84 signatory investors managing over $4.8 trillion in assets. One of the drivers for this investor action is the growing risk of reputational damage to investors themselves if their risk management and due diligence procedures for assessing human rights risk are perceived to be weak. In 2013, despite being minority shareholders, two European investors faced censure by the Organisation for Economic Co- operation and Development (OECD) when they were perceived to have applied insufficient human rights due diligence over their investments in POSCO—a South Korean steel company linked to forced evictions and human rights violations in India.

(. . .) it should be no surprise that investors are increasingly asking the companies in which they invest to know and show how they are managing human rights-related issues throughout their businesses from merger and acquisition activity and down through their supply chain.

Time to hit the accelerator A recent report commissioned by law firm Eversheds7 showed that expectations have shifted. They surveyed 200 in-house general counsels, members of company boards, and human resource directors in 10 industries across 34 countries, and found that over one quarter of organizations are already making positive advances, with 33% publicly reporting against the UNGPs, and that 47% use their purchasing power to exert leverage on supply chain to support human rights. That is encouraging, but still leaves much work to do. In the next five years, the focus should be on catalysing even wider change and the Eversheds survey also highlighted two key challenges to this: a lack of awareness, and of adequate resources to support progress. In total, 43% of respondents give their senior leadership a low rating for their human rights approach and a priority for the coming years should be ensuring that change comes from the top.

Making it simpler in the next five years We must make it as easy as possible for companies to understand the expectations of investors and others so they can embed good practice in their everyday business. In an age where many companies have global operations and complex supply chains this requires clear and simple guidance. Fortunately, the response to this challenge was boosted last month by the UK Equality and Human Rights Commission, an independent statutory body of the UK government, and Shift, the leading centre of expertise on the UNGPs, who jointly authored ‘Business and human rights: A five step guide for company boards’.8

As the title suggests, this sets out straightforward guidance for directors of UK companies to help them identify, mitigate, and report on the human rights risks and impacts of their businesses. The guide is equally helpful for investors, as it facilitates a more productive dialogue with companies around the five steps they should take to ensure the organization and

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board of directors fully understand the responsibilities laid out under the UNGPs. These obligations need to then be shored up by appropriate employee training, along with resources to drive implementation. The launch of this guide is an important milestone, one that I hope ushers in strong commitment from businesses—from the boardroom down through their supply chain—to actively respect human rights around the world. The information in this document should not be considered a recommendation to buy or sell any security.

SOURCE Lauren Compere. 2017. ‘Human Rights and Business: From Principles to Practice’, The Huffington Post, 15 June. Available at: https://www.huffingtonpost.com/lauren-compere/human- rights-business-fro_b_10465824.html.

QUESTION The Ruggie principles assign a central role to business in respecting human rights. Which of the rights set out in Chapter 3 would companies be most likely to have to respect in their business operations?

Visit the online resources for web links to useful sources of further information.

The perspective of human rights certainly provides the most straightforward answer to Ethical Dilemma 3. In using child labour, the product manager could be said to violate the rights of the children to education, and arguably to infringe the right to freedom of consent. Furthermore, a human rights perspective would cast doubt on the issue of an individual’s right to a living wage, as it would appear that poor wages could have necessitated the engagement of the entire family in employment over long hours of work rather than paying one parent a suitable wage to provide for his or her family.

Ethical theories based on rights are very powerful because of their widely acknowledged basis in fundamental human entitlements. However, the theoretical basis is one of plausibility rather than a deep theoretical methodology. Some object to the idea that corporations should take on the role of protector of human rights, and act as if they were states (Hsieh 2015; Wettstein 2012), and indeed the UNGPs expect a lot from businesses as the protector of human rights, while it is still not clear which human rights are most relevant for business. Perhaps the most substantial limitation of this approach is that notions of rights are quite strongly located in a Western, individualistic view of morality. A considerable amount of friction might occur if these ideas were to be directly transferred, if not imposed, on communities with a different cultural and religious legacy.

Ethics of rights: justice

Whenever two parties enter an economic transaction there has to be agreement on a fair distribution of costs and benefits between the parties. Such agreements are usually handled by contracts or left to market forces to resolve. Various questions about the equity of such distribution inevitably arise, however:

How should a company pay its shareholders, executives, office workers, and manual staff so that everybody gets fair compensation for their input into the corporation?

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How should a company take into account the demands of local communities, employees, and shareholders when planning an investment with major impacts on the environment?

How should a government allocate money for education so that every section of society gets a fair chance of a good education?

We could easily multiply these examples, but what becomes clear is that individual rights have to be realized in such a way that they are addressed equally and fairly. This is where the issue of justice arises, since justice is all about how fairly individuals are treated so that they get what they deserve.

Justice The simultaneous fair treatment of individuals in a given situation with the result that everybody gets what they deserve.

The crucial moral issues here are what exactly ‘fairness’ should mean in a particular situation and by which standards we can decide what a person might reasonably deserve. According to Boatright (2014), useful ways to view justice see fairness in two main ways:

Fair procedures. Fairness is determined according to whether everyone has been free to acquire rewards for their efforts.

Fair outcomes. Fairness is determined according to whether the consequences (positive and negative) are distributed in a just manner, according to some underlying principle such as need or merit.

Most views of justice would ideally seek to achieve both types of fairness, but this is not always possible. Consider the case of access to higher education. Say it was discovered that certain ethnic groups were under-represented in your university’s degree programmes. Given that ethnicity is not correlated with innate intelligence, we might seek to solve this problem by reserving a certain number of places for under-represented groups to make sure that educational rewards—fair outcomes—were distributed fairly among these different sections of society. However, this would impose a potentially unfair procedure on the university’s admissions, since ‘over-represented’ groups would be excluded from applying for the reserved places. This is an ongoing debate in India, where a quota system reserving more than 20% of available places for lower-caste Hindus in government-funded academic institutions has long been in operation but continues to generate controversy.

Notions of justice have been widely applied in business ethics problems, notably in relation to employment practices and the question of discrimination, as we shall examine in more depth in Chapter 7. Justice has also been a key feature of debates about globalization and sustainability. Here, the main concern is about issues of social and economic justice and how society is organized to achieve them.

Social contract theory

Social contract theory, which we turn to now, draws together some of the ideas we have been discussing around natural rights, the state of nature, and justice. We have already mentioned the work of Thomas Hobbes and John Locke, and the way in which they understand the nature of humanity (the ‘state of nature’) and the resulting necessary relationships between people and governments. Swiss-French

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political philosopher Jean-Jacques Rousseau (1712–78) further captured the idea of how society should be organized in his treatise on the social contract. He had a different view of the state of nature, starting from the assumption that people are peaceful and kind, living solitary and uncomplicated lives (Friend 2018). He emphasized the shared endeavour of society and the benefit to us all of the passing on and sharing of knowledge, art, and information. According to Rousseau, it is only when society and communities become more interdependent and need to compete for resources and the ownership of private property becomes possible that strong democratic principles are needed for individual and collective benefit.

Social contract A hypothetical agreement between members of a society and those who govern it that establishes the inter- relationships, rights, and responsibilities on a fair basis.

As we go about our daily lives we aren’t necessarily aware of the hypothetical agreement of a social contract, but we may take for granted that (depending in which society we live) we can sell our labour for financial reward and be paid the same as the next person, own property, get married to a partner of our choice, vote for a governing body, face punishment if the law is broken, and have basic levels of health and welfare protected. You may know of societies where some of these cannot be assumed and where that is a point of debate (e.g. in some countries there are restrictions on who can marry whom). On the whole, the social contract becomes visible when some element is contested, or there is a whole new arena for which to establish rules. We might say, for example, that the social contract for social media is very much still in formation, and the allocation of responsibility for, say, children engaging in social media is hotly disputed between governments, social media companies, and parents.

The role of business in social contracts has been a point of debate. Contemporary formulations of social contract theory generally include business in their calculations of this implied contract that determines the responsibilities that each of us have relative to society as a whole (Byerly 2013; see, for example, Donaldson and Dunfee’s 2002 - integrated social contract theory). Table 3.5 summarizes some common characteristics of social contract theory and their implications for business. Rights, obligations, and justice bind the members of society, business, and government together to create a good society. This, as you can imagine, is hugely complicated, and Scherer and Palazzo (2007) point out that the right elements of the social contract should not be determined by one theorist, but should be arrived at by more democratic means. This theory continues to evolve and remains a popular approach to understanding ethics (Singer 2018).

Table 3.5 Elements of social contracts and implications for business

Key element

Meaning Implications for business 110

Key element

Meaning Implications for business

Voluntary Citizens voluntarily agree to rule by government, accepting their authority and giving up certain freedoms.

Business is reliant on the infrastructure and regulation that enables and protects their business operations. Participating voluntarily in society according to the social contract, gives them a license to operate. In turn they accept restrictions such as paying their taxes and abiding by laws.

Tacit agreement

The agreement to participate in the arrangement is implied, not stated or involving an actual contract to be signed.

While business is the place where we might be most familiar with actual contracts and explicit agreements, these are embedded in unspoken agreements about appropriate behaviour and practice in business dealings.

A hypothetical construction

The social contract is constructed by a theoretical process; there is no actual point of historical creation—it is hypothetical.

Business is at best a minor actor in the theoretical process of social contract theory historically. Arguably, business tends to focus on the here and now, and it perhaps is not surprising that they sometimes fail to meet the requirements of the hypothetical construction.

Source: Derived from Fryer (2015: 131–9).

A popular approach to determining a just social contract has been proposed by American John Rawls (1921–2002) in his book A Theory of Justice (1971). Rawls’ starting point for his hypothetical construct is that we should imagine a state of nature in which people are equal, free, and rational, seeking to advance their own interests. He calls this the original position. He suggests that we must imagine that these people are behind a ‘veil of ignorance’. That is, people do not know what role or situation they themselves will occupy in society—they could be a cleaner, a ballerina, have a terminal disease, be an indigenous leader, a queen, rich or poor, a child or an accountant— and everything in between. The veil of ignorance, it is assumed, forces people to be fair and impartial in their judgement about how to organize society, because they need to do so from the perspective of all people simultaneously (Boatright 2014). This, as you can imagine, is very complicated, and Rawls’ work is full of complex reasoning, not least around the nature of consequentialism and its fit to his theory of justice. For our purposes, most useful is his determination of the two criteria which he believes all rational self-interested people behind a veil of ignorance would arrive at. He distils clearly that society is just when:

1. Each person has an equal right to the most extensive total system of basic liberties compatible with a similar system of liberty for all.

2. Social and economic inequalities are arranged so that they are both:

(a) To the greatest benefit of the least advantaged—known as the ‘difference principle’.

(b) Attached to offices and positions open to all under conditions of fair equality of opportunity—known as the ‘principle of equal opportunity’.

The first criterion is foundational: before allowing for any inequalities, we should ensure that basic freedoms are realized to the same degree for everyone affected by the decision. The first condition thus looks to general human rights and requires their fulfilment before we can proceed to the next step.

The second criterion is based on the assumption that inequalities are unavoidable in a free and competitive society. However, two conditions should be met. First, an arrangement is just when even the one who profits least from it is still better off than they would be without it. This, for example, would suggest that high salaries for corporate leaders might be acceptable providing that employees at the bottom of the corporate hierarchy were also better off as a result— say, because the high salary for the leader led to better corporate performance, which in turn could be translated into higher wages for the least paid. The second condition, again following this example, would be met if not only a privileged few could ascend the corporate ladder, but everyone had a fair chance of doing so, regardless of gender, ethnicity, etc.

Even in this simplified form of Rawls’ complex calculus, we can usefully apply these basic principles to various business situations in order to determine ‘just’ treatment of stakeholders.

If we look to our example in Ethical Dilemma 3, the first test would be to ask if all people involved (including the product manager) were in possession of the same basic liberty. Apart from the cultural differences between Europe and Thailand, this is certainly not the case for the children, since they are obviously not allowed to have even a basic education. The second principle could conceivably allow for a more tolerant approach to child labour: the first criterion for inequality would be to ask if the children are better or worse off with the arrangement. One might reasonably argue here that children are often forced into worse things in developing countries than assembling plastic toys. Prostitution, begging, and theft might be other alternatives, suggesting that the children would be better off if you concluded the deal. However, if concluding your deal meant that the children would miss schooling that they otherwise would have had, the arrangement is definitely not benefiting the least well off. The second criterion, though, poses even more of a problem, since without access to education the children do not have a realistic chance of achieving the position that the better-off parties, such as you, have. Hence, they are definitely not ‘under conditions of fair equality of opportunity’.

If we extend our view slightly more broadly, Rawls’ social contract approach could be used to justify multinationals’ exploitation of low wages and poor conditions in less-developed countries—at least under certain conditions. For example, some MNCs have taken it upon themselves to provide education or basic healthcare for their workers in less-developed countries. In this way, MNCs still take advantage of lower wages in these countries, but by providing a ‘system of basic liberties compatible with a similar system of liberty for all’ and creating ‘conditions of fair equality of opportunity’ (at least on a local level), one might argue that the resulting inequalities are still ‘to the greatest benefit of the least advantaged’. After all, without the manufacturing plant, local people would probably face

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greater poverty and less opportunity for development than they would with it.

THINK THEORY

In Chapter 2, in the context of the extended conceptualization of corporate citizenship, we have discussed the role of companies in the provision of basic entitlements such as water, security, and health. From the perspective of John Rawls’ theory of justice, could you imagine a situation in which the involvement of private corporations in the provision of public services (such as the provision of water) could be considered as morally just?

Visit the online resources for a suggested response.

ETHICS ON SCREEN 3 Baby Driver

© PictureLux/The Hollywood Archive /Alamy Stock Photo

‘They call me Baby Driver, and once upon a pair of wheels, I hit the road and I’m gone.

–Paul Simon and Art Garfunkel, Baby Driver Music, car chases, love, and heists are all entangled in this fast-paced movie. It tells the story of a young, very talented driver, somewhat incongruously nicknamed ‘Baby’, who through some mistakes as a child ends up in debt to a criminal, Doc. Doc puts together gangs for each ‘job’ but sees Baby as his lucky mascot, and won’t let him find a way out of this dubious lifestyle because Baby, played by Ansel Elgort, is an outstanding getaway driver. This makes for some fantastic cinematography and the rich soundtrack of music is clearly crucial to the set-up. Director Edgar Wright uses Baby’s

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hearing problems and tinnitus (as a result of an accident when he was young in which his parents were killed) as a device to bring in the music—Baby always listens to music on his iPod. This seems to be a point of fascination for many of those he comes into contact with.

In addition to being a thrilling film full of hope and horror, the cast of characters and the contrasting worlds of normal life and the underground violent criminals make for some great opportunities to reflect on ethics. The social contract evident in the ‘normal’ life for Baby of working for a pizza delivery company, falling for Debora (a waitress in a diner, played by Lily James), and looking after his disabled foster-father is one of which an ethic of care supporter might be proud, though their lives don’t look to be tremendously fulfilling or well rewarded. Nevertheless, in some way we can see that these are good people, doing their best by each other.

In the criminal world everyone is an egoist out for themselves and—with some justification—suspicious of each other. Hobbes’ idea of a war of all against all could not be more apt, and—spoiler alert—in the end all the criminals pretty much kill each other, illustrating nicely the idea that egoism is internally inconsistent. Given that violence and murder are woven throughout the film, there isn’t a great deal of hope that the people concerned are the most virtuous ever, nor that they are followers of Kant’s higher-level understanding of duty, though in the end Baby does turn himself in to be held to account for his crimes; but Baby and Debora show virtue through great courage and consideration for others, even perversely when they are stealing cars.

There are some fantastically bad characters in Baby Driver —Jamie Foxx and Jon Hamm playing Bats and Buddy probably win the competition for the most evil and deranged. It is hard to think of a vice which Bats and Buddy don’t display at some point, and a struggle to think of them as exhibiting any virtues. This is a great film and the cast of characters and strange situations, while not likely to be the kind we come across in business life, provide a rich context for thinking about different ethical perspectives.

SOURCE Collin, R. 2017. Baby Driver review: Edgar Wright’s infectious car-chase thriller will make you believe in magic, Daily Telegraph. 30 June. https://www.telegraph.co.uk/films/0/baby- driver-review-edgar-wrights-infectious-car-chase-thriller.

Visit the online resources for web links to useful sources of information related to this film.

LIMITS OF WESTERN MODERNIST THEORIES

If we look back to these major Western modernist ethical theories, we could argue that they present quite a comprehensive view of humans and society, and based on various assumptions, they come up with actionable principles to answer ethical questions. In presenting such a closed ‘model’ of the world, these theories have the substantial advantage that they claim to provide a solution to every possible situation. However, they have the big disadvantage that their view of the world only presents one aspect of human life, while reality normally tends to be rather more complex.

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In the previous discussions we have outlined some of the main benefits and drawbacks of each of these main ethical theories. However, the very approach of all Western modernist theories is open to criticism. As largely absolutist theories based on objective reason, a number of drawbacks for approaching business ethics problems through theories of this sort can be identified.

The main criticisms of Western modernist ethical theories are: Too abstract. Stark (1994) suggests that traditional ethical theories are

too theoretical and impractical for the pragmatic day-to-day concerns of managers. In real life, managers are unlikely to apply abstract principles derived from long-dead philosophers when dealing with the concrete problems of business. Normative theories ‘lack power, persuasiveness and effectiveness’ because they do not deal enough with the question of how businesses might actually operate in practice (Brenkert 2010: 709).

Too narrow. Each theory tends to focus on one aspect of morality at the cost of all the rest of morality. Why choose consequences, duties, justice, or rights when all are important?

Too objective and elitist. Parker (1998) suggests that ethical theories attempt to occupy a rarefied high ground, such that those specialist ethicists and philosophers who know and understand the theories can pronounce on the right and wrong of other people without any subjective experience of the situation with which they are faced. Just because Crane, Matten, Glozer, and Spence know the difference between utilitarianism and justice, why should that mean that we can decide for you whether a product manager in Thailand is doing the right thing?

Too impersonal. By focusing on abstract principles, traditional ethical theories do not take account of the personal bonds and relationships that shape our thoughts and feelings about right and wrong (Held 2006).

Too rational and codified. Ethical theories try to distil right and wrong down to codified rational rules of behaviour. Bauman (1993) contends that this suppresses our moral autonomy and denigrates the importance of our moral feelings and emotions, all of which he claims are crucial for acting morally towards others. Rorty (2006) suggests that what we need is better moral imagination and ethical stories rather than moral reasoning.

Too imperialist. Why assume that ethical theories from the West are suitable for business people everywhere else in the world (Naude 2017)? What about the ethical teachings of classical Asian or traditional African philosophy, for instance—do these not also have something useful to say about modern-day business ethics?

Clearly, then, there are certain problems associated with these Western modernist theories (see also Jones et al. 2005). Many of these stem from their emphasis on the more absolutist approach to ethical theory. Some point instead to alternative ethical theories that emphasize greater flexibility, as well as including consideration of decision-makers, their context, and their relations with others, as opposed to just abstract universal principles. Although the theories we are going to discuss now are also open to criticism, they help to enrich the choice of perspectives we could take on ethical issues in business.

ALTERNATIVE PERSPECTIVES ON ETHICAL THEORY These alternative ethical theories to the Western modernist theories appear much less commonly in business ethics texts, yet we would

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suggest that they offer an important alternative perspective that should not be ignored, and which, we would suspect, may become increasingly more influential in the business ethics literature. We shall be looking at four main alternative ethical theories, summarized in part two of our table on normative ethical theories, Table 3.6:

Ethical approaches based on character and integrity (virtue ethics) Ethical approaches based on relationships and responsibility (ethic of

care) Ethical approaches arrived at through a deliberative process (discourse

ethics) Ethical approaches based on empathy and moral impulse (postmodern

ethics)

Table 3.6 Normative theories in business ethics: part two

Virtue ethics Ethic of care Discourse ethics

Postmodern ethics

Contributors Aristotle Alasdair MacIntyre

Carol Gilligan Virginia Held

Jürgen Habermas

Zygmunt Bauman

Key works Nichomachean Ethics (A) After Virtue (AM)

In a Different Voice (CG) The Ethics of Care: Personal, Political and Global (VH)

Moral Consciousness and Communicative Action (JH)

Postmodern Ethics (ZB)

Focus Character Relationships Deliberative process

Moral impulse

Guiding tenets

Strive to be a good person

Relationships and associated responsibilities inform ethics

Conflict resolution requires honest open exchange and discussion

Ethics is context and individual specific

Concept of human beings

Humans can learn virtuous traits to lead a good life

Humans are relational and interdependent

Humans are rational individuals who can resolve conflicts by a process of argumentation

Humans have an innate internal guide to ethics

Type Virtue Feminist Procedural Poststructuralist

ETHICAL APPROACHES BASED ON CHARACTER AND INTEGRITY: VIRTUE ETHICS

Up to now, we have chiefly looked at right and wrong according to the ethics of particular actions. However, much attention in recent years has focused on approaches that start from a different perspective: rather than checking every single action according to its outcomes or its underlying principles, these approaches look to the character or integrity of the decision-maker. Focusing on the integrity of individuals clearly has a strong resonance in a business context,

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especially when considering the ethics of professionals, such as doctors, lawyers, and accountants, who rely on their moral probity for maintaining legitimacy and gaining clients. Attention to character as a foundation for business ethics has also arisen in non-Western contexts, such as Africa, where it has been argued that a humanistic approach is more easily acceptable in African culture than rules-based approaches (Gichure 2006). Similarly, Woods and Lamond (2011) contend that ‘refinement of one’s character’ is central to Confucianism, with its emphasis on cultivating virtues such as benevolence (ren), righteousness (yi), ritual propriety (li), wisdom (zhi), trustworthiness (xin), and filial piety (xiao).

Character and integrity-based approaches to business ethics have mainly drawn on one of the earliest ethical theories, that of virtue ethics. This is decidedly not a contemporary theory (which the other alternative theories tend to be), being over 2000 years old and having its origins in ancient Greece and Aristotle’s writings on ethics, especially his Nicomachean Ethics. In virtue ethics, the main message is that ‘good actions come from good persons’, where good persons are defined in terms of certain traits or characteristics, namely ‘virtues’.

Virtue ethics An approach to ethics which focuses on the idea that possessing excellent traits of character, or virtues, is required in order to be a good person. A virtuous person is a morally good and wise person.

Virtues are ingrained in the individual, not just arrived at by a whim, but reflective of the person’s entire disposition or way of being (Hursthouse and Pettigrove 2016). Which traits are virtuous, their opposite vices and otherwise has been the subject of debate for millennia—and continues to this day. Virtues can be differentiated into intellectual virtues—practical ‘wisdom’ (phronesis) being the most prominent one—and moral virtues, which comprise a long list of possible characteristics such as temperance, courage, justice, honesty, friendship, mercy, loyalty, patience, etc. All these virtues are manifested in actions that are a habitual pattern of behaviour of the virtuous person, rather than just occurring once or in one-off decisions. The idea of balance is important here, so you can have too much or too little of these characteristics. We might think of them as on a continuum—blind loyalty and disloyalty, for example, are the extremes of the virtue of loyalty, rashness and cowardice are the extremes of courage. As these traits are not ours by birth, we acquire them by learning and, most notably in business, by being in relationships with others in a community (MacIntyre 1967).

Central to the ethics of virtue is the notion of a ‘good life’. For Aristotle, this consists of eudemonia, variously defined as flourishing, well-being, and happiness (Fryer 2015: 173). This most notably includes virtuous behaviour as an integral part of the good life: a happy business person would not only be one who achieves business goals, but one who does so while at the same time savouring the pleasures of a virtuous manner of achieving their success. In a business context, the ‘good life’ means far more than being a profitable company. Virtue ethics takes a more holistic view by also looking at the way this profit is achieved, and most notably by claiming that economic success is just one part of the good business life—with satisfaction of employees, good relations among all

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members of the company, and harmonious relations with all stakeholders being equally important (Collier 1995). Indeed, business itself is considered by some to be an essential part of the good life (Solomon 1992).

From this point of view, the virtuous product manager in Ethical Dilemma 3 could take in different perspectives, depending on the community from which the notion of a virtuous manager was derived. On the one hand, you could be compassionate and considerate with the situation of the suppliers. Taking into account their need for work and money, as well as the children’s need for education, perhaps you would try to do business with them while, at the same time, assuming responsibility for the children’s education. For instance, you could support a local school, or pay sufficiently high wages to allow the family to send their children to school, rather than making use of them as cheap labour. On the other hand, you might also think that the ‘good life’ in rural Thailand might in fact consist of an entire family working happily together and that Western concepts of education, professionalization, and efficiency are a different concept of a ‘good life’ that might not be appropriate to the Thai approach to life. Typically, though, virtue ethics in a business context such as this would suggest that the solution to many of the problems faced by managers are located in the culture and tradition of the relevant community of practice. The product manager should determine what a ‘virtuous’ product manager would do from their professional code of conduct, from virtuous role models, or from professional training.

It does not take long to see what the main drawback of virtue ethics is: how do we make sense of a seemingly good person doing bad things, like Baby in Ethics on Screen 3? What do we do if virtues conflict? How do we determine which community ideal of virtues to consult? And, in the absence of a clear code of conduct from our relevant communities, how do we translate ideas of virtuous traits into ethical action? While virtue ethics is often transferred unquestioningly from the individual to the organization, careful consideration is needed to reflect on whether this can be done meaningfully and whether we can think of a business culture as equivalent to an individual character (see Moore 2017 for full discussion of this and its implications). In Ethics in Action 3.2 we see the example of Nudie Jeans, which seeks to promote human rights, fair labour practices, environmental sustainability, and ethical business practice; this small business might be considered to be virtuous, reflecting the virtues of its CEO. Such an example reminds us that right and wrong cannot simply be resolved by applying a specific rule or principle, but that individuals within organizations need to cultivate our knowledge and judgement on ethical matters over time through experience and participation (Nielsen 2006).

Ethics in Action 3.2 The naked truth about Nudie Jeans Co.

Simon Oldham Nudie Jeans Co. is a small Swedish fashion business founded in 2001, specializing in denim products, notably its range of jeans, as well as jackets and accessories. However, what differentiates Nudie from many other small businesses is its championing, and embedding, of a small number of key values within its business. These values are articulated and publicized through two memorable taglines—‘The Naked Truth About Denim’ and ‘A High-Quality Product Made In A Fair Way’. The values enshrined in these taglines of ‘honesty’, ‘quality’, and ‘equality’ permeate Nudie’s entire business strategy, operations, and behaviours. Specifically, the business aims to promote human rights, fair labour practices, environmental sustainability, and ethical business practice

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throughout its operations. For example, the company only uses 100% Fairtrade organic cotton denim, which reduces the water, energy, and carbon impact of their products, publishes extensive information of its supply chain, including the location of its suppliers and their latest audit, as well as offering a free repair service for their products and recycling products wherever it can.

This doesn’t mean that Nudie has had to sacrifice commercial success in the pursuit of its values. As of 2017, the company’s products were sold in over 50 countries, its iconic repair shops operated in a number of key international locations including London, New York, and Tokyo, and turnover was over €46 million with just under 160 employees directly employed by the company.

But how and why has Nudie chosen to embed and enact these values to such a considerable extent? Arguably, the size of the company has greatly influenced Nudie’s values as, according to CEO Palle Stenberg, its values come directly from the personal values of the three company owners, all of whom hold key positions within the company, including CEO and chairman of the board. As Stenberg puts it, ‘Those ethics have always been part of us . . . The look and the fit is important—otherwise nobody buys them. But the social responsibility and taking care of nature was also there from day one. We wanted to know that everyone who worked with us would go to sleep at night having an OK life’ (Guardian 2014).

The concern and care Nudie has for its employees runs right through the business, from those employees directly employed by the company to individuals employed within Nudie’s supply chain and outsourced manufacturing operations. Such concern was exemplified in 2010 when, during a visit to a supplier located in India, it became clear to Nudie that wages paid at the manufacturing plant fell below the level of a true living wage. Despite the subcontracting company discussing concerns relating to the living wage with several companies with which it worked, notably a number of multinational enterprises, Nudie was the only company to address such concerns. Remarkably, as one representative from the subcontracting partner noted, ‘it is like talking to someone at Amnesty when to talking to her’ [one of the owners] (Egels-Zanden 2017: 105). Specifically, Nudie embarked on a pioneering project to firstly calculate a living wage and then began the introduction of the wage to those individuals employed in the manufacture of their products within its Indian subcontractor. However, alongside this, Nudie also made retrospective payments for products historically manufactured within the subcontractor, despite the cost incurred and the impact on company profit margins.

Overall, Nudie provides a clear example of a value- orientated business, well demonstrated by its attainment of a number of sustainability certifications, as well as membership of business ethics groups, networks, and coalitions, in tandem with the awards it has garnered for its business ethics and Corporate Social Responsibility engagement. For example, the business won the Observer Sustainable Style Award in 2015, as well as winning a sustainability prize in 2016 and becoming a member of the Fair Wear Foundation living wage incubator in 2017. Nevertheless, Nudie continually critically examines and evaluates whether its practices live up to its core values, and accordingly it regularly measures its environmental and social impacts and sets ambitious corporate social responsibility targets.

SOURCES https://www.nudiejeans.com Borromeo, L. 2014. A Swedish denim label wants to change the way we wear our jeans. Guardian, 17 March:

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https://www.theguardian.com/sustainable-business/nudie- swedish-denim-label-jeans. Egels-Zanden, N. 2017. The role of SMEs in global production networks: a Swedish SME’s payment of living wages at its Indian supplier. Business and Society, 56 (1): 92–129. Fisher, A. 2015. Observer Ethical Awards 2015 winners: Nudie Jeans. Guardian, 2 July: https://www.theguardian.com/environment/2015/jul/02/observer- ethical-awards-2015-winners-nudie-jeans.

QUESTION What ethics do you think drive Nudie Jeans—which ethical theory presented in Chapter 3 do you think relates most closely to the approach taken? Do you consider Nudie Jeans to be a virtuous organization?

Visit the online resources for web links to useful sources of further information.

ETHICAL APPROACHES BASED ON RELATIONSHIPS AND RESPONSIBILITY: ETHIC OF CARE

This eschewal of a principle-based approach to ethical problems has also been taken up by other alternative frameworks, which focus not on character but on relationships. One notable example of this approach is feminist ethics, which starts from the assumption that men and women have fairly different attitudes towards organizing social life, and that women’s agency and power is undermined by

tradition ethical approaches (Borgerson 2018).9 One instance of this, and there are many approaches to feminist ethics, is an ethic of care. From Carol Gilligan’s (1982) observations on the moral development of boys and girls in her classic work In a Different Voice, the point here is that something important is missing if any one type of voice is privileged and another consistently excluded.

In addressing ethical problems, traditional ethical theory has looked for rules and principles, elevating the justice perspective (Held 2006). This approach has been almost exclusively established and promulgated by male philosophers, such as we have discussed here, including Kant, Hobbes, Locke, Bentham, Aristotle, and Mill. While in our analysis we have sought to include a range of perspectives, there is no getting away from the fact that none of the dominant business ethics theories, apart from the ones we discuss in this section, are originated and led by women. Some will dismiss this as being because women did not have access to education and publishing opportunities in the Enlightenment era or ancient Greece. This is true, but women were still half of the population and yet the story of moral philosophy has been utterly dominated by the story of men’s moral philosophy (Tong and Williams 2018), and the arena of business ethics similarly so (Spence 2016b).

Deeper reading of classic works does show some wider awareness among these great thinkers, though it rarely sees the light of day within business ethics—John Stuart Mill campaigned for women’s suffrage in his political life, and Jean-Jacques Rousseau tried to develop the idea of feminine virtues. But there are also some notable dismissals—Aristotle’s flourishing life excluded women and slaves of both genders; Kant felt that women were morally deficient. There are

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certainly women philosophers of the times, but their own voices continue to struggle to be heard in the mainstream. These include, but are not limited to, Hypatia of Alexandria, Harriet Taylor Mill (yes, John Stuart Mill’s wife), Mary Wollstonecraft (who wrote Vindications of the Rights of Women in 1792), Elizabeth Anscombe (credited with the first use of ‘consequentialism’), and Hannah Arendt (who coined the phrase ‘the banality of evil’).

Thankfully, the reliance that moral philosophy and, by extension, business ethics has had on a small group of dead white men is refreshed somewhat by the much wider variety of contemporary philosophers. Here we look to feminist ethics, and a particular example that has gained some momentum in business ethics (though it is by no means the only approach), of an ethic of care.

Before proceeding, the ethic of care has come under some criticism for being based on ‘gender’, ‘caring’, or other over-simplified reductions of a feminist perspective. Janet Borgerson has argued that in doing business ethics, we should look beyond the version of care ethics that focuses on stereotypical feminine traits and behaviours (Borgerson 2007, 2018). She finds a ‘harmony’ between business ethics and a broader version of care ethics that focuses on relationships and responsibility not defined by feminine gender roles. This broadens our understanding of care ethics and increases its potential impact in business ethics research and practice.

While we acknowledge that the association of an ethic of care originally with caring professions, such as nursing, childcare, or social work, has not helped to break away from the orientation of gender, women, and care, business ethics researchers have used an ethic of care effectively in a wide range of different scenarios (see André and Pache (2016) on social enterprises; Simola on moral courage (2015); Spence (2016a) on small business social responsibility). Such research suggests that focus is shifting to the rich value of these alternative perspectives (for a more detailed discussion on the contribution of feminist ethics see Grosser, Moon, and Nelson 2017; McCarthy and Moon 2018).

Ethic of care An approach to ethics which emphasizes our interdependency with those with whom we have important relationships and acknowledges a role for emotions as well as rationality.

Carol Gilligan’s work (1982) has been taken up by others and developed into a distinct moral theory by protagonists such as Nel Noddings, Sara Ruddick, Joan Tronto, and Virginia Held. Held’s (2006) work is particularly useful for laying out the basis of the approach and its emphasis on the relationships we have and hold important. Rather than emphasize the need for rationality and autonomy, the ethic of care acknowledges and accepts that:

we have an emotional commitment and willingness to act on behalf of those with whom we have a significant relationship;

we are not autonomous; we are bound by circumstance, relations, and position; we have restricted information and choices; and we are in positions of unequal power.

This of course leads to quite a stark contrast in what ethical behaviour entails, compared to other theories which have such dramatically different starting points. It means that in Ethics on Screen 3, we understand the justification for Baby trying to protect his girlfriend and his stepfather by whatever means possible. Table 3.7 outlines the main resulting ethical concerns of an ethic of care.

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Table 3.7 Elements of an ethic of care

Feature Reasoning Meeting the needs of those for whom we take responsibility

Caring for a child at the fore-front of moral concerns. Recognition that human beings are dependent on others, especially as children, and for the vulnerable and elderly. The claims of particular others can be compelling regardless of universal principles.

Valuing emotions

Sympathy, empathy, sensitivity, and responsiveness are seen as the kinds of moral emotions that are valuable for implementing reason and to ascertain what morality recommends.

Accepting impartiality

The compelling moral claim of the particular other may be valid even when it conflicts with the requirement usually made by moral theories that moral judgements be universalizable.

Including the private sphere as a territory for morality

Focus of dominant theories has been on public life while overlooking the private domains of family and friendship, where women are often economically dependent and subject to a highly inequitable division of labour.

Acknowledging that people are relational and interdependent

People start out as morally relational and interdependent. This contrasts with traditional conceptualizations of fully autonomous and rational individual agents.

Source: Derived from Held (2006: 10–13)

Moral problems are conflicts of responsibilities in relationships rather than conflicts of rights between individuals and therefore can only be solved by personal, subjective assessment that particularly stresses the importance of emotion, intuition, and feeling. While traditional approaches would focus on ‘fair’ results, feminist perspectives stress social processes and particularly aim at the achievement of harmony, empathy, and integration with regard to ethical issues. The main goal is to avoid harm and maintain healthy relationships.

THINK THEORY

Think about your experiences in class or work. Have you experienced different feelings of responsibility to your friends than strangers? How might this play out in a business context? What role do you think emotions have in your own ethical decision-making?

Visit the online resources for a suggested response.

This focus on relationships and responsibilities is also evident in some non-Western ethical frameworks. For example, in Buddhist Approaches to Business Ethics, as Gould (1995) points out, there is

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an emphasis on considering ‘everyone as our father, mother, brother, or sister’, blaming yourself rather than others, and focusing on personal growth and fulfilment as basic tenets of ethical decision- making. Ultimately, the Buddhist perspective highlights the interconnectedness and web of relationships in which ethical decision-making takes place. Similarly, there is a focus on relationships as the basis for ethical conduct in Confucian Approaches to Business Ethics (Romar 2004). As Ip (2009) suggests, ‘social relationships and their harmony are of utmost importance’ in Confucian business ethics.

Applying a relationships approach to the case in Ethical Dilemma 3 would, in a certain sense, require far more knowledge about the case than we can acquire from just reading about it. A relationships- oriented perspective would cause the product manager to try to get a closer view of the family involved and see if the children are really happy in this situation. It would also involve a better understanding of the social and economic constraints that cause the family to embark on this particular production pattern. Ironically, a feminist perspective would not necessarily argue categorically against any involvement of children in the process, as long as the inter-familiar relationships are functioning well and the children are not forced, exploited, or compelled to work beyond their physical capacities. As the latter conditions might not be fulfilled, relational approaches would probably tend to object to child labour as well—however, not so very much because it violates certain (Western) principles, but because of the likely distress and suffering of the children, and their lack of agency and power. Furthermore, feminist theories would also look at the situation of the other actors involved and scrutinize, for example, the question of how the money earned by the assembling of toys is spent and how the income in the family is distributed, etc.

ETHICAL APPROACHES ARRIVED AT THROUGH A DELIBERATIVE PROCESS: DISCOURSE ETHICS

All of the theoretical approaches we have discussed so far start from a certain perspective on humans, on the values or goals governing their decisions, and a few other assumptions that in essence are all normative in nature. By normative, remember that we mean prescriptions of right and wrong action. However, it is worth taking a step back for a minute and asking if the starting point of prescriptions is, in fact, a very useful way to solve ethical conflicts in business. After all, we cannot take it for granted that everybody shares, for instance, the notion of humans being hedonistic, or of rights or feminist values being the most appropriate ones to address ethical problems in business. This is already problematic in a group of relatively homogeneous people; say, the marketing department of a Swedish furniture company. But it gets even more complicated if there is a meeting of all marketing directors of the company worldwide, since this could conceivably include participants as diverse as evangelical fundamentalists from the US, atheists from Russia, Muslims from Egypt, and Buddhists from Japan. In these situations, the most significant problems arise from the diverging normative perspectives that the different people might bring to the table.

It is at this point that theoretical approaches which look for a new ethical resolution might come into the picture. These approaches seek ethical behaviour, not in applying ethical principles, but in generating

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norms through a process of communication and deliberation that are appropriate and acceptable to those who need to resolve a particular problem. There are various forms that such practices could take, including, for instance, the traditional African institution of the palaver, where the relevant parties would be brought together under a ‘palaver tree’ and allowed to speak freely, in order to generate appropriate principles for decision-making (Gichure 2006). However, probably the best-known approach to norm generation in business ethics is that of discourse ethics.

Discourse ethics An approach that aims to solve ethical conflicts through a deliberative process of norm generation including rational reflection and open communication on the real- life experience of all relevant participants.

The philosophical underpinning of discourse ethics comes from the work of German philosopher Jürgen Habermas on communicative action (1983). According to this perspective, the ethically correct thing to do cannot be justified by rational arguments, but has to be generated by detailed and open debate (called ‘argumentation’) and applied to solve ethical conflicts on a day-to-day basis (Preuss 1999). Horst Steinmann and Albert Löhr (1994), who are among the main proponents of a discourse approach to business ethics, argue that ethical reflection has to start from real-life experiences (rather than belief systems, which could be too diverse). They contend that the ultimate goal of ethical issues in business should be the peaceful settlement of conflicts.

With this goal in mind, different parties in a conflict—say, a business and its stakeholders—should meet and engage in a discourse about the settlement of the conflict, arrive at a new consensus, and ultimately provide a solution that is acceptable to all. This ‘ideal discourse’, as it is usually called, is more than an occasional chat or business meeting; it has to answer certain philosophical criteria, such as impartiality, non-persuasiveness, non-coercion, and expertise of the participants (Habermas 1983). This includes the injunction that those who are more powerful should refrain from imposing their values on others and using their power to solve the ethical conflict according to their own views. Such an approach should ideally lead to the emergence of a new solution for addressing the problem—beyond just a compromise, or one party convincing the other that they are right—that is an expression of the consensus of all the represented parties.

Discourse ethics, then, is more a recipe for practical conflict resolution than an ethical theory comparable to those discussed above. In simple terms, it assumes that ethical business should be rooted in stakeholder dialogue based on equal participation and conducted without domination or coercion by any party. An ethically correct decision is one that has been reached in the right way, with the agreement of all, irrespective of what the actual decision itself is.

There are understandably certain practical limits to this approach, especially the considerable amount of time it involves, its fairly optimistic assumptions about rational human behaviour, and the avoidance of self-interested, strategic engagement in dialogue (Noland and Phillips 2010). Nevertheless, discourse ethics has been the underlying concept for the settlement of numerous disputes about corporate environmental impacts, in which various stakeholders with completely divergent value systems have come to common decisions on certain controversial projects (Renn et al. 1995). It has also been proposed as a useful yardstick for assessing corporate accountability (Scherer and Palazzo 2011) as well as potentially providing an ethical basis for web 2.0 approaches that focus on open access and inclusive decision-making (Mingers and Walsham 2010).123

If we apply a norm-generating approach such as discourse ethics to Ethical Dilemma 3, it lies in the nature of the concept that we are not able to say if this would influence in any way the resulting decision of the parties involved. It would, however, have much to say about the right procedure to be adopted. That is, it would suggest that all parties involved, starting with the Thai trading company, the confectionery manufacturer, the parents, the children, but potentially also the consumers in Europe, should meet together to enter a ‘norm- generating’ discourse on the topic. Apart from the fact that this shows some of the practical difficulties of the concept, the idea does open the way to a solution that could be closest to the interests of all parties involved.

ETHICAL APPROACHES BASED ON EMPATHY AND MORAL IMPULSE: POSTMODERN ETHICS

Finally, there is a school of thought in business ethics that takes the rejection of normative approaches yet further. Often referred to as postmodern ethics, this school of thought fundamentally questions the link between rationality and morality that is inherent in all the Western modernist ethical theories discussed earlier in this chapter. These traditional theories have their origins in modernism, which emerged roughly during the eighteenth-century Enlightenment era. ‘Modern’ thinkers strove for a rational, scientific explanation of the world and aimed at comprehensive, inclusive, theoretically coherent theories to explain nature, man, and society. In the area of the social sciences, one of the results of this was the development of various theories, commonly in the form of certain ‘-isms’, such as liberalism, communism, socialism, rationalism, capitalism, etc. Postmodern thinkers contend that these comprehensive theories, these ‘grand narratives’ of society (Lyotard 1984), are too ambitious, optimistic, and reductionist, ultimately failing to explain the complex reality of human existence.

Postmodern ethics An approach that locates morality beyond the sphere of rationality in an emotional ‘moral impulse’ towards others. It encourages one to question everyday practices and rules, and to listen to one’s emotions, inner convictions, and ‘gut feelings’ about what is right and wrong.

While postmodernism tends to embrace a whole range of theoretical propositions and arguments, postmodern thinkers have been particularly influential in ethics, since they identify the specific danger of rational approaches to morality. Zygmunt Bauman (1993), one of the best-known proponents of postmodern ethics, argues that by codifying morality within specific rules and codes of behaviour (as, for example, exemplified in bureaucratic organizations), rational approaches deny the real source of morality, which is rooted in a ‘moral impulse’ towards others. This is a subjective, emotional conviction that humans have about right and wrong, based on their experiences, sentiments, and instincts. Moral judgement, then, is a gut feeling more than anything else, but this is inevitably nullified when people enter organizations and become distanced from the people who are actually going to experience the consequences of their decisions, such as consumers, investors, suppliers, and others.

Ultimately, postmodernists are rather sceptical about the entire venture of business ethics (ten Bos and Willmott 2001), since ethical124

theories aim to find ‘rules and principles that determine right or wrong’ (our definition in Chapter 1). Postmodernists tend to suggest otherwise, such that ‘the foolproof—universal and unshakably founded—ethical code will never be found’ (Bauman 1993). A postmodern perspective on business ethics does not then provide us with any rule or principle, not even a procedure for ethical decision- making, such as discourse ethics. However, postmodern ethics have quite significant implications for ethical decisions in business.10

Gustafson (2000: 21), for example, suggests that postmodern business ethics emphasizes the following:

Holistic approach. As morality is an inner conviction of individual actors, there is no separation between the private and professional realm. Postmodernists argue that modernist theories of ethical behaviour lead to an abstract and distant view of ethical issues that ultimately causes actors to follow different standards in their professional and private lives. For business organizations, such a view of ethical decision-making could unleash a quite subversive potential to business ethics, as it might question the beliefs and practices held by the organization (Bauman 1993).

Practices rather than principles. As morality is not based on rational theories, ethical reasoning is not embodied in principles and rules. Rather, it is based on narratives of experience, metaphors to explain inner convictions, and practices that help individuals understand and overcome the unquestioned rules that constrain or dominate them (Crane et al. 2008; Weiskopf and Willmott 2013).

‘Think local, act local’. Modernist theories and ‘-isms’ are aimed at general principles that are applicable to each and every situation. Postmodernists think that ethical reasoning has to be far more modest: it would only be realistic to expect ethics to come up with local rules applicable to specific issues and situations. Rather than finding one principle for multiple situations, business ethics focuses on deciding one issue after another. This does not mean that postmodernists do not take their decisions seriously and could decide on an issue in one way today and in another way tomorrow. It rather highlights the fact that no one situation is the same, and that different actors, power relations, cultural antecedents, and emotional contexts might lead to different judgements in situations that could, in the abstract, be regarded as being in the same ‘class’ and subject to the same ‘principles’.

Preliminary character. Postmodern ethicists are often seen as more pessimistic than their modern counterparts. They know that ethical decisions are subject to non-rational processes, and thus less controllable and predictable. Ethical reasoning therefore is a constant learning process, an ongoing struggle for practices that have a better fit, or for reasoning that just makes more sense and works better than the approaches tried out so far.

From the nature of a postmodern view on business ethics, it might already be clear that the notion of discussing the abstract case of Ethical Dilemma 3 is a nearly impossible venture. Indeed, postmodernist thinkers are sceptical of the vignette or hypothetical case method of learning about business ethics, preferring instead to engender moral commitment to others through real-life encounters (McPhail 2001). We would at best only be able to come up with some form of judgement if we travelled to Thailand, visited the site, talked to the people, and emphatically immersed ourselves in the real-life situation. We would then have a ‘moral impulse’ about what to feel about the situation and could come up with what we would regard as the moral way to decide in this situation.

However, the example does gives us a few indications, and as good postmodernists, we would be well aware of the limitations of our present view on the issue and would try to suggest a preliminary view of what we would do in the situation of the product manager. We

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might, for example, at least suggest that we as the product manager have made the right first move in actually going to the site of production and facing those who will be affected by our decisions rather than staying at home and simply dismissing them as faceless ‘suppliers’. We might also point to our attempt to make our own autonomous decision based on the situation faced in the specific culture of Thailand, rather than relying on a corporate code of ethics, particularly one that is intended to have universal application. However, postmodernists would also question the extent to which you as the product manager are so steeped in a corporate mentality that you immediately think in terms of costs and bonuses, rather than people and their lives.

Ultimately, it is of the nature of postmodernism that we are not able to finally decide on the situation for the manager, since we lack the contextual nuances of the situation and we are not aware of the extent to which a genuine ‘moral impulse’ is possible in this context.

SUMMARY

The array of ethical theories discussed in this chapter provides us with a rich source of assistance in making morally informed decisions. However, the discussion of our case, Ethical Dilemma 3, has brought to the surface a variety of different views and normative implications depending on the theoretical approach that has been chosen. Sometimes these views provide widely contradictory results.

As we have indicated earlier in the chapter, we will not suggest one theory or one approach as the best or true view of a moral dilemma. Figure 3.1 shows this approach, where ethical theory is seen as a kind of ‘lens’ through which to focus ethical decision-making on a specific consideration, such as rights, duties, discourse, or whatever.

Figure 3.1 A typical perspective on the value of ethical theory for solving ethical dilemmas in business

Alternatively, we suggest that all of the theoretical approaches we have discussed throw light on the problem from different angles and thus work in a complementary rather than a mutually excluding fashion. Figure 3.2 elucidates the pluralist role of ethical theories: by viewing an ethical problem through the ‘prism’ of ethical theories, we are provided with a variety of considerations pertinent to the moral assessment of the matter at hand. Based on this ‘spectrum’ of views, the business actor is able to fully comprehend the problem, its issues and dilemmas, and its possible solutions and justifications. It is also important to recognize that many of these theories are influenced by each other, and say similar things in different ways. One might, for example, find discussion of favourable virtues in each of the theories. We have emphasized the differences in this chapter, in order to demonstrate the contribution each can make.

Figure 3.2 A pluralistic perspective on the value of ethical theories for solving ethical dilemmas in business

By using theory in this non-dogmatic way we take up the notion of pluralism, discussed earlier in the chapter, to propose that the best way of approaching ethical problems in business is through a pluralist analysis. This acknowledges that real business decisions normally involve multiple actors with a variety of ethical views and convictions that feed into the decision. Ethical theories help to articulate these views and a pluralist analysis paves the way to an intelligent and considered response to the problem. Furthermore, as we have already discussed in the context of contemporary and alternative theories, ethical decision-making does not rely only on rational considerations. Moral matters embrace human beings in the totality of their reason, emotion, bodily existence, social embeddedness, and past experiences, to name just a few. Rather than looking only for universal principles to dogmatically apply to every situation, we suggest a pragmatic approach that allows for all these aspects to play a role in business ethics.

Table 3.8 Considerations in making ethical decisions: summary of key insights from ethical theories

Consideration Typical question you might ask yourself

Theory

One’s own interests

Is this really in my, or my organization’s, best long-term interests? Would it be acceptable and expected for me to think only of the consequences to myself in this situation?

Egoism

Social consequences

If I consider all of the possible consequences of my actions, for everyone that is affected, will we be better or worse off overall? How likely are these consequences and how significant are they?

Utilitarianism

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Consideration Typical question you might ask yourself

Theory

Duties to others

Who do I have obligations to in this situation? What would happen if everybody acted in the same way as me? Am I treating people only to get what I want for myself (or my organization) or am I thinking also of what they might want too?

Ethics of duty

Entitlements of others

Whose rights do I need to consider here? Am I respecting fundamental human rights and people’s need for dignity?

Ethics of rights

Fairness Am I treating everyone fairly here? Have processes been set up to allow everyone an equal chance? Are there major disparities between the ‘winners’ and ‘losers’ that could be avoided?

Theories of justice

Character and integrity

Am I acting with integrity here? What would a decent, honest person do in the same situation?

Virtue ethics

Relationships and responsibility

How do (or would) the other affected parties feel in this situation? Can I avoid doing harm to others and ensure their agency and power? Which solution is most likely to preserve healthy and harmonious relationships among those involved?

Ethic of care

Deliberative process

What norms can we work out together through open communication and discussion to provide a mutually acceptable solution to this problem? How can we achieve a peaceful settlement of this conflict that avoids ‘railroading’ by the most powerful player?

Discourse ethics

Empathy and moral impulse

Am I just simply going along with the usual practice here, or slavishly following the organization’s code, without questioning whether it really feels right to me? How can I get closer to those likely to be affected by my decision? What do my emotions or gut feelings tell me once I’m out of the office?

Postmodern ethics

Table 3.8 provides a summary of the main considerations raised by each theory discussed in this chapter. Although we would draw back from advocating something akin to a ‘ten-point plan’ for ethical decision-making, you might want to use this table as a checklist of potential ways of addressing business ethics problems and dilemmas. Part of the process is deciding which theories are most relevant and useful in each case and why.

STUDY QUESTIONS

1. What are ethical theories and why, if at all, do we need them?

2. Is ethical theory of any practical use to managers? Assess the benefits and drawbacks of ethical theory for managers in a global economy.

3. Define ethical absolutism, ethical relativism, and ethical pluralism. To what extent is each perspective useful for studying and practising business ethics?

4. What are the two main families of Western modernist ethical theories? Explain the difference between these two approaches to ethical theory.

5. Which ethical theory do you think is most commonly used in business? Provide evidence to support your assertion and give reasons explaining why this theoretical approach is more likely than others to dominate business decisions.

Read the following case: You are the manager of FoodFile, a busy city-centre restaurant catering mainly to local office workers at lunchtimes and an eclectic, fashionable crowd of professionals in the evenings. You are proud of your renowned food and excellent service. Most of your staff have been with you since you opened three years ago—unusual in an industry characterized by casual labour and high turnover. You consider this to be one of the key factors in your consistency and success. Now, your head chef has come to you and told you, in confidence, that she is HIV positive. She is very distressed and you want to reassure her. However, you are troubled about her continuing to work in the kitchens and are concerned about the effect this news could have on the other staff, or even on your customers should they find out about her situation.

Using the summary of ethics theories provided in Table 3.8, set out the main ethical considerations that are suggested by each of the theories covered in this chapter.

Which theories are most persuasive in dealing with this dilemma?

What would you do in this situation and why?

RESEARCH EXERCISE

Select a business ethics problem or dilemma that you have faced or which has arisen in an organization of which you have been part, either as an employee, a student, or a manager. Briefly describe the basic details of the case, and identify

and discuss the main business ethics issues involved. Set out the main responses, solutions, or courses of action

that could have been considered in relation to this problem.

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Evaluate these options using the theories discussed in this chapter.

What decision was finally made? To what extent do you believe that this was the best option, and why?

KEY READINGS

1. Fryer, M. 2016. A role for ethics theory in speculative business ethics teaching. Journal of Business Ethics, 138 (1): 79–90. This article argues that the role of ethical theory has been consistently underplayed in business ethics textbooks to the detriment of the subject. Mick Fryer suggests that there has been a kind of normative impasse. He argues that ethics theory is an important and bountiful resource to enhance the ethical sensitivity of business students to make informed, independent judgements about ethical business practice.

2. Brenkert, G. 2010. The limits and prospects of business ethics. Business Ethics Quarterly, 20 (4): 703–9. This short article from a former editor of one of the field’s premier journals provides a useful critique of normative ethics, arguing that its usefulness will be limited unless we can show how business will actually change in line with the prescriptions from theory. For this, he argues, we need to complement normative analysis with a better understanding of the social and political role of firms.

Visit the online resources for further key reading suggestions.

CASE 3 Canada’s oil sands: ‘most destructive project on Earth’ or ‘ethical oil’?

Updated by Simon Oldham

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This case outlines the ethical controversies surrounding the development of the Canadian oil sands. It sets out the pros and cons of the oil sands and examines the role that these factors play in broader political decisions in the US and Europe about supporting imports from the Canadian oil industry. Despite the oil industry being no stranger to controversy, Canada’s oil sands have become probably the most hotly contested development in decades. Extracting oil from the heavy, extremely viscous mixture of sand, clay, water, and bitumen has become economically viable within recent years. However, critics argue that the social and environmental costs are excessively high. Tar sands extraction requires much greater quantities of water than for conventional oil, it imposes a far higher burden of carbon emissions, and it has been associated with a range of other pollutants, including mercury contamination. According to the Sierra Club, the largest environmental NGO in the US, the oil sands produce ‘the most toxic fossil fuel on the planet’.

Nevertheless, oil sands development also has its legions of supporters, especially in Canada, where most commercial extraction takes place. As exemplified by the publication of ‘Ethical Oil: The Case for Canada’s Oil Sands’ by Canadian lawyer and lobbyist Ezra Levant, the Canadian oil sands have been argued by proponents to be a source of ‘ethical oil’. This is justified by Levant and other supporters by the enormous economic benefits of the oil sands; for instance, they have been proven to be the third largest oil reserves in the world, with an almost doubling of production forecasted between 2017 and 2038 to 5.5 million barrels by 2038. Moreover, this argument has been compounded by the fact that Canada, when compared to many of the other largest oil-producing countries, has a strong track record of upholding democracy, human rights, and environmental protection.

Canada’s oil sands industry Oil sand is a naturally occurring substance that can be found in several locations around the globe, including Kazakhstan, Russia, and Venezuela. However, the deposits in the western Canadian province of Alberta are, so far, the largest and most commercially developed source in the world. Alberta’s oil sands are located in an area of around 140,000 square kilometres in the north of the province, with Fort McMurray being the main urban hub for the industry and supporting services.

The Albertan oil sands have long been known to the local First Nations who used the bitumen to seal seams on their canoes. European explorers provided the first written accounts of the oil sands in the 18th century and the first patent for commercial separation processes to extract crude oil was awarded as early as the 1920s. Commercial operations only began seriously in the late 1960s with the establishment of the first oil sands mine. Development initially occurred relatively slowly, with the second and third mines only opening in the late 1970s and early 2000s respectively.

The initially slow pace of development was mainly due to the high cost involved in extracting crude oil from the oil sands; this, coupled with low oil prices and relatively abundant supply from other sources, made the oil sands economically unattractive. With the spike in oil prices that began around the turn of the century, the rush to secure greater energy independence in the face of an unsettled Middle East, and dwindling supplies elsewhere, investment flowed into the Albertan oil sands in the early 2000s. A swathe of foreign energy companies, including Shell, Chevron, Total, Statoil, Exxon, and ConocoPhillips, as well as the Korean National Oil Company, and CNOOC, China’s largest producer of offshore crude oil, joined Canadian companies Suncro Energy and

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Syncrude to boost annual investment in oil sands extraction to just over $30 billion by 2012. From just over half a million barrels of bitumen a day in 1997, the oil sands industry in 2017 produced almost 2.77 million.

However, despite production increasing year on year, the oil market downturn in 2014 saw investment in new oil sands projects decline by up to 2/3, falling to around $10 billion dollars a year in 2018. Difficulties in bringing new pipelines online, escalating carbon taxes, and a cap on greenhouse emissions from the oil sands have dampened many investors’ interest in the Canadian oil sands.

The pros and cons of the oil sands The rapid expansion of the oil sands has brought a host of economic benefits to the local Albertan economy and to Canada as a whole. According to the Canadian Energy Research Institute (CERI), almost every community in Canada has been touched by oil sands development through the stimulating impact it has had on job creation and economic growth. Some of the headline impacts promoted by oil sands supporters include:

Employment in Canada’s oil sands industry as a result of its expansion is expected to grow from 206,000 jobs in 2017 to 461,000 jobs in 2027.

Between 2014 and 2015, 3,400 Canadian companies outside of Alberta supplied the oil sands industry with goods and services.

Between 2014 and 2015, 371 companies in Quebec earned CAD$1.2 billion in business contracts related to the oil sands industry.

The oil sands industry is expected to contribute CAD$1.6 trillion to the Canadian economy between 2017 and 2027 and CAS$521 billion to the US economy over the 25-year period from 2010 to 2035.

The oil sands industry will pay an estimated CAD$139 billion in federal taxes and CAD$98 billion in provincial taxes between 2017 and 2027.

In the US, the oil sands industry is expected to contribute $16 billion to gross state product and create or sustain 145,000 jobs between 2017 and 2027.

In 2015 and 2016, 399 indigenous companies, representing 65 communities from across Alberta, had direct business with oil sands operators, valued at CAD$3.3 billion.

On the other hand, many critics have highlighted the significant environmental problems caused by oil sands development. Although all oil sands developments must meet Canada’s environmental protection regulations, since production began ramping up in earnest after the turn of the century, environmentalists and other critics have pointed to a litany of negative environmental impacts. For example, some of the studies conducted by researchers and environmental groups conclude that:

Research suggests that oil sands-based petroleum production releases 20% more greenhouse gases than conventional petroleum production.

Oil sands emissions accounted for 10% of Canada’s greenhouse gas emissions in 2017 and 0.14% of global greenhouse gas emissions. Canada is now among the top ten greenhouse gas producers on an absolute basis.

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Planned expansion of oil sands production is predicted to increase global carbon emissions by between 50 and 150 million tonnes annually by 2030. Such an increase would impede Canada’s ability to meet emissions targets as a result of the 2015 Paris Climate Accord.

As of 2017, ponds of toxic sludge produced by the Canadian oil sands industry covered 220 square kilometres, containing 1 trillion litres of chemical and hydrocarbons which have been found to leak into the local environment.

As of 2017, an area of boreal forest and muskeg habitat the size of New York City has been destroyed.

Studies suggest that oil sands development pollutes lakes in the Alberta region with toxic carcinogens. Furthermore, emissions from oil sands production contain neurotoxins, a number of which are carcinogenic, which have led to numerous reports of local residents with health problems, such as elevated levels of cancer.

In 2011, the oil sands industry used 170 million cubic metres of water, equivalent to the residential water use of 1.7 million Canadians; by 2030 this figure is estimated to climb by almost 170%.

Since commercial activities started in the 1960s, by 2016 only 11% of active mining footprint has been or is in the process of being reclaimed—much of the peatlands and old growth forests that have been destroyed will never return to their natural state.

These and many other environmental criticisms have continued to plague oil sands companies, despite some companies investing considerable resources into environmental enhancements of various kinds, including better water efficiency at mine sites and new technologies such as carbon capture and storage (whereby waste carbon dioxide is captured and stored to prevent it being released into the atmosphere).

Most environmental groups remain unconvinced that these improvements are making a tangible difference, given the speed and scale of development in northern Alberta. Many have taken a strong position against any further development, with groups like the Canadian NGO Environmental Defence labelling the oil sands ‘the most destructive project on Earth’, while Greenpeace is ‘calling on oil companies and the Canadian government to stop the tar sands’. Some more moderate voices, such as the Pembina Institute, have a goal to advance what they call ‘responsible oil sands development’, which involves a cap on environmental impacts and a reduced environmental footprint per barrel of oil produced. Even the terminology of the oil sands remains contentious, with critics typically labelling it the ‘tar sands’ while industry and the Canadian government prefer the more benign-sounding ‘oil sands’.

The ‘ethical oil’ makeover In the face of such challenges to the reputation of the oil sands, one particularly controversial approach to restoring its tarnished image has been to focus on the country of origin of competing sources of crude. That is, in addition to all of the supposed economic benefits of oil sands development, some also highlight that buying oil from Canada is more responsible than buying from many other oil-producing countries. The basic point here is that because the oil sands are in Canada, they are properly and democratically regulated; they do not fall

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foul of the corruption and abuses common in oil-rich countries and the proceeds do not go into funding terrorism.

Exponents of this argument need only point to the countries with the largest current reserves of oil to make their point (see Table 3.9). Apart from Canada, most other states in the top ten have relatively poor records of democracy and upholding human rights. The Canadian-based NGO Ethicaloil.org, which is the most vociferous promoter of this argument, argues that oil-producing countries should, therefore, be divided into those producing ‘ethical oil’ and those producing ‘conflict oil’: ‘Countries that produce Ethical Oil uphold human rights and have high environmental standards. They ensure economic justice and promote peace. By contrast, Conflict Oil countries oppress their citizens and operate in secret with no accountability to voters, the press, or independent judiciaries.’

Table 3.9 Top ten countries by proven oil reserves as of 2017

Rank Country Reserves (billions of barrels)

1 Venezuela 301

2 Saudi Arabia 267

3 Canada 170

4 Iran 158

5 Iraq 143

6 Kuwait 102

7 United Arab Emirates

98

8 Russia 80

9 Libya 48

10 Nigeria 37

Source: Central Intelligence Agency, The World Factbook: https://www.cia.gov/library/publications/the-world- factbook/rankorder/2244rank.html

The book that popularized the idea, Ethical Oil: The Case for Canada’s Oil Sands, written by Ezra Levant, became a best-seller in Canada and ended up winning the National Business Book Award. Levant went on to set up Ethicaloil.org, which is widely believed to benefit from oil industry funding and support—or, as one Greenpeace spokesperson put it, it is ‘a front group for Big Oil’. This sentiment was echoed by the then climate sceptic Prime Minister, Stephen Harper, who, when referring to petroleum production, noted that ‘Canada is a very ethical society and a safe source for the United States in comparison to other sources of energy’.

The ‘ethical oil’ debate quickly ignited controversy in Canada, not least because it looked to many like an attempt to airbrush out the problematic aspects of the oil sands. John Bennett, executive director of the Sierra Club of Canada, explained that ‘the fact that the Saudis or Nigerians or others are worse in human rights and environment is not relevant. We can’t do anything about that; we can deal with our oil sands and we are not.’ Others, such as the renowned Canadian environmentalist David Suzuki, remarked simply that ‘in today’s world, all fossil fuels are unethical. There is no such thing as ethical oil.’

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The politics of the oil sands Yet the discourse regarding the ethics of the Canadian oil sands constantly evolves, particularly influenced by the relationship between Canada and the US and the stance each of the country’s leaders takes towards climate change.

The majority of oil sands crude is sold to Canadian and US refineries; for instance, in 2017, 99% of Canada’s oil exports went to the United States. Nevertheless, despite an increasing share of US imports, it looked for a while like the oil sands would be vulnerable to US efforts to green its energy mix. US environmental groups had long fought restrictions on US imports of ‘dirty’ oil sands oil, while President Barack Obama made fighting climate change a key plank of his inaugural address back in 2013.

The issue of the US’s relationship with the oil sands crystallized in the long-running debate about the Keystone XL pipeline extension, which was designed to bring more oil sands crude to refiners in the US. The project became mired in controversy during the 2010s due to its own potential environmental impacts (the risk of spills into ecologically sensitive terrain) as well as the divisive issue of bringing oil sands crude, and its heavier greenhouse gas burden, into the US energy mix at a time when the country was looking to reduce rather than increase its emissions. The issue came to a head during the Obama administration with the President refusing, on the advice of the Environmental Protection Agency, to give the executive order required for the pipeline to go ahead, arguing that the project would not lower petrol prices, create long-term jobs, or affect energy independence. However, weeks into the Trump administration in early 2017, the President signed an executive order supporting Keystone XL, sanctioning the construction of the pipeline which could carry up to 850,000 barrels of oil a day from Canada to the US, a move seen by many as emblematic of the Trump administration’s disregard for environmental protection, climate change, and sustainable development.

These issues, and the future of the oil sands, were further confused on the election of Justin Trudeau as Canadian Prime Minister, as many believed he would reverse his predecessors’ lax attitude towards and policies on climate change, given his vocal support of environmental protection. However, he subsequently threw his support behind the Keystone XL project and was quoted at a Texas energy conference in 2017 as saying that ‘no country would find 173 billion barrels of oil in the ground and leave them there’.

Overall, with increasing pressure for a global reduction in carbon emissions, intense commercial pressure affecting the oil and gas industry, and changing political winds buffeting discourse around its ethicality, what the future holds for the Canadian oil sands is far from clear.

QUESTIONS

1. Which actors have a stake in deciding whether the oil sands are an ethical source of oil and why do you think they differ so much in their assessments?

2. How would you go about conducting a utilitarian analysis of the oil sands for the purpose of deciding whether it is an ethical source of oil? Provide a provisional assessment based on the data in the case and outline what other data you would need to make a full assessment.

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3. How would this assessment differ if you focused primarily on principle-based ethics (duties, rights, and justice)? What issues take precedence now and do they give a reasonable perspective on the problem?

How would you compare oil sands oil to other sources of oil from an ethical perspective? Consider the case for saying that all oil is unethical. What theory or principle might support such an assertion? Is it a useful position to take, and if so, for whom?

Visit the online resources for web links to useful sources of further information on this Case.

SOURCES BBC News. 2017. Keystone XL Pipeline: Why is it so disputed? BBC News, 24 January: https://www.bbc.co.uk/news/world-us-canada-30103078. Berman, T. 2017. Canada’s most shameful environmental secret must not remain hidden. The Guardian, 14 November: https://www.theguardian.com/commentisfree/2017/nov/14/canadas- shameful-environmental-secret-tar-sands-tailings-ponds. Canadian Energy Research Institute. 2017. Economic Impacts of Canadian Oil and Gas Supply in Canada and the US (2017– 2027). September 14, Study No. 166: https://www.ceri.ca/assets/files/Study_166_Full-Report.pdf. Canadian Energy Research Institute. 2018. Canadian Oil Sands Supply Costs and Development Projects (2018–2038). May 4, Study No. 170: https://www.ceri.ca/files/publications/306. Canadian Government website: http://www.nrcan.gc.ca. Canadian Oil & Natural Gas Producers website: https://www.canadasoilsands.ca/en/explore-topics. Chase, S. 2011. Harper’s embrace of ‘ethical’ oil sands reignites ‘dirty’ arguments. Globe and Mail, 7 January: www.theglobeandmail.com/news/politics/harpers-embrace-of- ethical-oil-sands-reignites-dirty-arguments/article563356. Cunningham, N. 2018. Investment in Canada’s oil sands declines, but production still poised to grow. Energy Fuse, 30 January: http://energyfuse.org/investment-canadas-oil-sands- declines-production-grow. Edwards, J. 2014. Canada’s oil sands residents complain of health effects. The Lancet World Report, 26 April: https://www.thelancet.com/journals/lancet/article/PIIS0140- 6736(14)60703-0/fulltext. Erickson, P. 2018. Confronting carbon lock-in: Canada’s oil sands. Stockholm Environment Institute, May: https://www.sei.org/wp-content/uploads/2018/05/confronting- carbon-lock-canadas-oil-sands.pdf. Ethicaloil.org website: http://www.ethicaloil.org. Sierra Club Canada/oil sands: https://www.sierraclub.ca/en. Slavin, T. 2017. Can Alberta put a cap on the oil sands? Ethical Corporation, 21 September: http://www.ethicalcorp.com/can-alberta-put-cap-oil-sands. Suzuki, D. 2011. Can oil be ethical? David Suzuki Foundation: www.davidsuzuki.org.

NOTES

1 There is no comfortable way around the fact that most of the theories and concepts in this chapter were derived from the study of men, and excluded women as moral subjects. This is not something that should be overlooked and is addressed more directly when we come to the ethic of care perspective.

2 In fact, although the ICCR began as a coalition of faith- based investors, its ‘current membership has grown beyond the universe of religious investors to include like-minded mainstream institutional investors who recognize the moral and ethical repercussions of their financial decisions. Affiliation with a faith tradition is not a requisite for ICCR membership.’ See http://www.iccr.org/our-approach/connection-between- faith-investing.

3 For the full text, go to http://institute.jesdialogue.org/fileadmin/bizcourse/interfaithdeclaration.pdf.

4 Those who have used previous editions of this textbook may notice that our labelling has changed a little, particularly in using ‘principle-based’ rather than ‘non-consequentialist’. This is because we have expanded the section on social contract theory, and particularly John Rawls’ theory of justice, in line with its continued relevance in business ethics research and teaching. This theory is not strictly speaking non- consequentialist, in that it incorporates some elements of outcomes into its analysis, though it is firmly based on the development of principles, hence the new emphasis in the categorization.

5 See http://www.business-humanrights.org.

6

https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.

7 On the right path: Human rights at work report 2016. http://www.eversheds- sutherland.com/global/en/where/europe/uk/services/employment- law/business-human-rights-zmag.page? utm_source=website&utm_medium=bhr- banner&utm_campaign=BHR%2520report%2520zmag.

8

https://www.equalityhumanrights.com/sites/default/files/business_and_human_rights_web.pdf.

9 We will not focus here on the important issue of gender (this is covered in more detail in Chapter 7 on employees), but useful discussions on this can be found in Grosser, McCarthy, and Kilgour (2017); McCarthy (2017); McCarthy and Moon (2018).

10 In some ways, then, postmodern approaches to ethics resonate quite substantially with some Asian ethical frameworks, particularly those such as Buddhism or Taoism.

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