Crane & Matten, Business ethics, 3rd Edition, Chapter 3

Suggested answers to the Think Theory exercises associated with the Ethics in Action boxes

THINK THEORY 1 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?

Absolutism. Bribery is always wrong; the person faced with a corrupt official should certainly not engage in bribery, and depending on the policies in place should also take the matter to the authorities. Relativism Bribery may be wrong; the person faced with a corrupt official should make a judgement based on the culture in which they are operating and the specific circumstances of the interaction. If the judgement is that engaging with the corrupt official would be wrong, the person should act as above; if the judgement is that it is not wrong, no barrier exists to greasing the wheels.

THINK THEORY 2 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?

There is a basic difference in the two approaches, rendering different obligations. The Kantian ethics of duty is non-consequentialist: stakeholders are ends in themselves, and firms should treat them all with dignity. Utilitarianism is consequentialist. Here, an action is morally right (only) if the result is the greatest good for the greatest number. Individual stakeholders can therefore be treated instrumentally. One example to illustrate how utilitarianism could be applied: a supermarket chain might be justified in pressurising its suppliers to deliver goods at disadvantageous conditions (if the utility to customers and shareholders outweighed the costs to suppliers).

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Crane & Matten, Business ethics, 3rd Edition, Chapter 3

THINK THEORY 3 Think about the situation of rural landowners/farmers in contemporary India. What in your view would be a just and fair approach to implement the SEZ concept of the Indian government? Would your judgement change if you applied consequentialist theories of business ethics?

Following the example of China, the Indian government wants to implement a series of more than 500 SEZs across the country in a bid to boost economic growth and increase employment. Both aims are uncontroversial: the problem is the way the concept is being implemented. Although state governments have had their powers to purchase land at a unilaterally-determined price removed, fears remain that farmers will be driven off their land and receive a pittance in compensation. The rule-free nature of the SEZs is also cause for concern: because labour and environmental rules will not apply, it seems likely that these zones will be a cause for serious concern for years to come. A just and fair approach would overcome these problems. Chapter 3 sets out a range of traditional and contemporary theoretical perspectives that one could take in deciding how the approach should look. Just and fair implies the use of non-consequentialist normative theories: Ethics of duties. Humans are rational, moral, actors who should apply the categorical imperative if a decision is to be considered ethically acceptable: o Consistency: everyone can follow the same underlying principle (treat others as I would like to be treated); o Human dignity: should never be ignored; o Universality: would other rational actors endorse my judgement? Would I be comfortable with my actions being reported in the press? Ethics of rights and justice: Here, basic, important and inalienable entitlements need to be respected and protected in every action. o Human dignity is crucial; o Justice is considered in two ways: fair procedures and fair outcomes. Clearly it is difficult to see how the present situation can be considered fair and just. Equally, from this perspective, implementing the SEZ concept in an ethical manner would require, at a minimum, that the human dignity of the farmers (and future employees) be respected. In practice, this would require those affected to be actively involved in the development of the SEZs. One might reach a different conclusion from a consequentialist approach, but it is by no means certain. Utilitarianism: here, an action is morally right if it results in the greatest amount of good for the greatest number of people. o Utility can be defined in a number of ways. o But working out the greatest good requires a form of cost-benefit analysis. Egoism: Here, the action is morally right if the decision maker makes a free decision to pursue their interests (be they long- or short-term). o Associated with Adam Smith and liberalist economics.

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Crane & Matten, Business ethics, 3rd Edition, Chapter 3 o Here, a firm will choose to act in a certain manner if it considers its actions to be in its own interests. The judgement of the right approach would depend on the outcome of these analyses. For example, a company might seek a process that stakeholders consider fair because it sees doing so as being in its interests (more cooperation later on, less trouble in western markets). Although the motivation would be very different, that companys approach might look no different from a company motivated by an ethic of duty.

THINK THEORY 4 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?

Yes. Provision of public services such as water is arguably essential for people to be able to enjoy their basic liberties considered as social rights under the extended view of corporate citizenship discussed in Chapter 2. Where the government is either unable or unwilling to provide such public services and a private corporation is able to do so, then the involvement of a corporation in providing these services is morally just, as it contributes to provision of basic liberties. Such services must be affordable, however, otherwise they fail to meet Rawls second criterion.

THINK THEORY 5 Think about the ethical arguments used by family members, friends, or colleagues. Can you see any differences between the arguments used by men and women? What does this say about the potential contribution of feminist ethics?

A feminist ethics, or ethics of care, is about avoiding harm and maintaining healthy relationships in specific situations, rather than applying abstract principles. It is not about a female perspective on ethics (as opposed to a male abstract ethics), but is rather about general principles that transcend gender and which are relevant regardless of gender. It is possible, even probable, that women and men in ones daily life use different arguments; but reducing the insights of feminist ethics to a male-female split, or emphasising gender differences in arguments, risks ignoring the insights of feminist ethics, which are valuable for all people, regardless of gender.

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Crane & Matten, Business ethics, 3rd Edition, Chapter 3

THINK THEORY 6 How far can we interpret the process of developing the new ISO 26000 standard as an application of discourse ethics? What are the advantages of this approach and what could be seen as drawbacks and risks?

Discourse ethics involves solving ethical conflicts by providing a process of norm generation through rational reflection by relevant participants in the process. The following elements are key: Impartiality; non-persuasiveness; non-coercion; participant expertise. The process of developing the ISO standard can be seen as a practical application of discourse ethic. Certainly, it appears to have been the underlying ethic. This is because: The process involved intense work to reach consensus by six groups, containing the key stakeholders with real expertise; There were six negotiating sessions; There was a clear consensus by the end of the process. Advantage of such an approach The result is robust, with unanimous buy-in: the standard will be widely accepted. Drawbacks/risks of discourse ethics The process is very slow; It involves a large investment of time and energy from all parties; In this case, the result was a very long document.

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