business Ethics homework assessments

BBA 4751, Business Ethics 1

UNIT VIII STUDY GUIDE

Business and the Environment

Course Learning Outcomes for Unit VIII Upon completion of this unit, students should be able to:

1. Explain how environmental challenges can create business opportunities.

2. Describe a range of values that play a role in environmental decision making.

3. Explain the difference between market-based and regulatory-based environmental policies.

4. Describe business’ environmental responsibilities that flow from each approach.

5. Identify the inadequacies of sole reliance on a market-based approach. 6. Identify the inadequacies of regulatory-based environmental policies. 7. Define and describe sustainable development and sustainable business. 8. Highlight the business opportunities associated with a move towards

sustainability and describe the sustainable principles of eco-efficiency, biomimicry, and service.

9. Explain why ethics is important in the business environment.

Unit Lesson If it is true that the way business has been conducted over the last two centuries has brought us against the biophysical limits of the earth’s capacity to support all human life, then we have an ethical obligation to explore alternatives. “The major ethical question of this chapter is what responsibilities contemporary businesses have regarding the natural environment” (Hartman, DesJardins, & MacDonald, 2014, p. 478). “There is a tendency to believe that environmental challenges always create a burden on business and that environmental and business interests are always in conflict” (Hartman et al., 2014, p. 477). However, there is a nascent school of thought that we have entered a sustainability revolution (i.e., an age where creating environmentally and economically sustainable products and services is creating unlimited business opportunities). The concept of “sustainable business and sustainable economic development seek to create new ways of doing business in which business success is measured in terms of economic, ethical, and environmental sustainability, sometimes called the triple bottom line approach” (Hartman et al., 2014, p. 478). In order to help plan for environmental sustainability, some firms engage in a technique called backcasting. The idea is to predict the future after emerging from a sustainability revolution and then looking backward in time to implement that vision. It is, in essence, the acknowledgement that a sustainable business must use resources and produce wastes at rates that do not jeopardize long-term human wellbeing by exceeding the earth’s capacity to renew the resources and absorb the wastes.

Reading Assignment Chapter 9: Business and Environmental Sustainability, pp. 475-497

Suggested Reading See information below.

BBA 4751, Business Ethics 2

However, the concerns about environmental sustainability are not limited to the human realm. Another set of values to be considered involves the moral status of animals and other living beings. If it is true that many animals are conscious entities who feel pain and possess many aspects of self- determination, then a cogent argument can be made for moral standing and ethical treatment for these creatures. One challenge for this position is that such standing has significant economic and viability implications for many businesses. There are three prescribed approaches to evaluating environmental sustainability, resource allocation, and the obligations they place on businesses. The first is the market approach, which at its core, maintains that economic forces of supply and demand are sufficient to regulate the consumption and distribution of natural resources. Unfortunately, as with the economic model of corporate social responsibility in Unit VII, there are many examples of market failures in the recent past that cast doubt on that approach’s ability to ensure sustainable business practices. Some industry specific policies have been proposed to augment the market approach, and those related to the auto industry include such elements as restricting SUV sales, increasing taxes on gasoline, and treating SUVs as cars instead of light trucks in calculating Corporate Automotive Fuel Efficiency (CAFÉ) standards. The bottom line in this context is that markets are incomplete in their approach to the overall social good. In other words, what is good and rational for a collection of individuals is rarely what is good and rational for a society as a whole. The second approach to environmental sustainability, resource allocation, and the associated is the regulatory approach. A broad consensus emerged in the United States in the 1970s that considered unregulated markets an inadequate approach to environmental challenges. “Much of the most significant environmental legislation in the United States was enacted during the 1970’s. The Clean Air Act of 1970, Federal Water Pollution Act of 1972 (amended and renewed as the Clean Water Act of 1977), and the Endangered Species Act of 1973” (Hartman et al., 2014, p. 486). “Before this legislation was enacted, the primary legal avenue open for addressing environmental concerns was tort law. Only individuals who could prove that they had been harmed by pollution could raise legal challenges to air and water pollution” (Hartman et al., 2014, p. 486). The laws enacted during the 1970s shifted the burden from those threatened with harm to those who would cause the harm. However, several problems suggest that the regulatory approach will prove inadequate over the long term. “First, it underestimates the influence that business can have in establishing the law. Second, this approach also underestimates the ability of business to influence consumer choice. Further, if we rely on the law to protect the environment, environmental protection will extend only as far as the law extends” (Hartman et al., 2014, pp. 487 & 488). Recall the limits of the law in Unit I. The third approach to environmental sustainability and resource allocation is the sustainability approach. This conception combines financial opportunities with environmental and ethical responsibilities. The three goals of this

BBA 4751, Business Ethics 3

initiative (economic, environmental, and ethical sustainability) are often referred to as the three pillars of sustainability. Assessing business activity along these three lines is often referred to as the triple bottom line. Sustainability is a prudent long-term strategy because

1. Firms that do no adapt to the decreasing availability of resources and increasing demand risk their own survival.

2. The huge unmet market potential among the world’s developing economies can only be met in sustainable ways.

3. Significant cost savings can be achieved through sustainable practices including savings on energy use and waste disposal.

4. Businesses that are ahead of the sustainability curve will both have an advantage serving environmentally conscious consumers and enjoy a competitive advantage attracting workers who will take pride and satisfaction in working for progressive firms.

All of the benefits arise from a mindset of eco-efficiency (i.e., the efficiency in using natural resources). One final concept in the sustainability discussion is the elimination of waste rather than the reduction of those byproducts. That concept is referred to as biomimicry because it mimics natural processes, such as the decay of leaves into nutrients for the soil that plants absorb for food and whose existence both cleans the air of CO2 and/or provides a transfer of energy to animals that ingest the plants. It is possible that duplicating this natural cycle for man-made products could be the ultimate goal and long-term solution for environmental sustainability.

Reference

Hartman, L. P., DesJardins, J., & MacDonald, C. (2014). Business ethics: Decision making for personal integrity & social responsibility (3rd ed.). New York, NY: McGraw-Hill.

Suggested Reading Click here to access the PDF of the Chapter 9 Presentation. Black, J. (2003, Summer). Extending the rights of personhood, voice, and life to

sensate others: a homology of right to life and animal rights rhetoric. Communication Quarterly, 51(3), 312-331.

Garde, A. (2009). Sustainable by design? Insights from U.S. LEED-ND pilot

projects. Journal of the American Planning Association, 75(4), 424-440. Schofer, E., & Granados, F. J. (2006). Environmentalism, globalization and

national economies, 1980-2000. Social Forces, 85(2), 965-991.