What Is Ethical Business and How Far Is It Possible to Be Ethical in a Highly Competitive, Globalised World?
The financial crisis in 2008 is a perfect example of the consequence of businesses behaving unethically. Public perception is that the CEO’s of investment banks were blinded by greed, money and self-enrichment with all the consequences that entailed. Currently, oil prices are breaking new records and the world is in a new crisis. It is argued that capitalism brought wealth to the western world however economists say it is showing its limitations. Straus (2010) states the economy of capitalism is based on endless growth at which the finite world cannot infinitely provide the resources for. So if the world wants to continue growing it might be worth doing this responsibly. The question is how. An answer offered in this essay is: by doing business ethically. In the first section ethics and business ethics are explained. The essay then presents, by support of examples, the need for (large) businesses to operate ethically and solutions to get to them this turning point are suggested. In the last section a larger world issue will be discussed where the key to the solution will be pointed to business ethics.
Since mankind is doing business, ethics are involved. For example if a customer buys a television he can expect the product to be working as intended. If that is not the case he can expect the seller to at least get the product to be working as intended without the consumer paying extra money. Apart from the fact that this is a legal situation, this is what is morally expected from the seller. As the official definition of ethics states: “Moral principles that govern a person’s behaviour or the conducting of an activity”(New Oxford Dictionary). In other words do what is morally correct.
However, what in general is morally correct is very arguable. This is hard to define, since it for instance can be culturally related and therefore different. For business ethics it can be less difficult to explain what is morally incorrect or not ethical. Basically this philosophy comes down to the range and quantity of business ethical issues reflecting the interaction of profit-maximizing behaviour with non-economic concerns. So when a decision by a business is made, a question can arise whether the decision is ethical or not. Or whether the business is going for profit maximization instead of the business doing what is in line with non-economic interests of its stakeholders. Every time these questions are asked, the business also has to calculate the impact for the stakeholders when choosing for profit maximization. For example, for Shell the group of stakeholders is large: it contains the world population. It is not unthinkable that in the past Shell faced a dilemma where it on the one hand had to choose for drilling at a certain location for oil, knowing that when something would go wrong a whole habitat could be at stake, but when successful, a high profit would be realisable. Or on the other hand choose for safety and