Excerpt
Contents
List of figures
1. Introduction
2. Theoretical Basics
2.1 Defining Moral and Ethics
2.2 Building a Bridge to Business Ethics
2.3 Corporate Social Responsibility
2.4 The World is Flat: The Phenomenon of Globalisation
3. Moral Insights
4. Economic Insights
5. Institutional Insights
6. Resumé and ‘Walk the Talk’
7. Conclusion
Bibliography
List of Figures
Figure 1: Different Levels of Business Ethics
Figure 2: Scientific Contributions to CSR
Figure 3: The Pyramid of Corporate Social Responsibility
Figure 4: Consequentialist and Non- Consequentialist Theories in Business Ethics
Figure 5: Operationalisation of Economic Well- Being
Figure 6: A Snapshot of Social Life in the World’s Most Populous Nations, 2000
1. Introduction
In the past few years, business ethics has emerged as a broad and important concept, universities are offering seminars, corporations are sending their managers on trainings, and an enormous literature body seems to be emerging out of nowhere. In contrast to this movement, the ‘globalization bible’, the novel NoLogo written by journalist Naomi Klein draws a different picture: it accuses companies and CEOs of antisocial behaviour. Consumer capitalism on the one hand and at the same time articles about sweatshops, bad working conditions, and ‘famous’ names like the Brent Spar platform, Sao Wiwa and Shell, and Nike sweatshops support the negative image of MNCs.
In the following I would therefore like to examine why certain corporations seem to take on corporate responsibility while others, as stated in Klein’s novel, act as ‘the big brand bullies’. I seek to answer in this paper why business ethics as a concept is not an oxymoron (cp. Collins 1994) per se and why in the words of John L. Campbell “given the incentives for maximizing profit and shareholder value, let alone acting opportunistically, why would a corporation ever act in socially responsible ways, even at the most minimal level” (947).
In general, there are three main approaches to the grounds of acting socially responsible: there are moral reasons, economic reasons and institutional reasons. First of all I would like to start by giving some theoretical basics. Subsequently moral, economic and institutional theories as an explanation for the implementation of business ethics will be examined. Because each of these three parts is considered equally important they will all be covered, but concessions need to be made due to the enormous width of the topic. I would then like to come up with a diagnosis and possible topics to ‘walk the talk’ and finally draw a conclusion.
2. Theoretical Basics
2.1 Defining Moral and Ethics
In order to come to common grounds I would like to begin by defining moral and ethics as they are oftentimes used incorrectly and/ or interchangeably. This confusion traces back to the roots of these two terms. Both terms are derived from the Greek word ethos which has two meanings in Greek but is translated into Latin with only mos, that is morality (cp. Küpper 13). According to Crane, A. and D. Matten morality is “concerned with the norms, values, and beliefs embedded in social processes which define right and wrong for an individual or a community” (8). Right and wrong for an individual or a community can vary, and this is why morality can not be given a fixed definition: different cultures and even people can have a distinctive conception of morality. So if there are different cultural[1] areas involved such as Asia, the US and Europe it becomes clear that distinctive perspectives on business ethics also exist. As morality is in this view context dependent and subjective the ethical theory behind this conception is called Ethical Relativism (in contrast to Ethical Absolutism, a theory claiming that there are universally applicable moral principles. Traditional ethical theories are based on this concept.)
Ethics is the teaching of moral action and to give again a definition by Crane, A. and D. Matten “Ethics is concerned with the study of morality and the application of reasons to elucidate specific rules and principles that determine right and wrong for a given situation. These rules and principles are called ethical theories” (8).
There are various ethics which would in German be called “Bindestrich- Ethiken”, meaning applied ethics. Business ethics, media ethics, women’s ethics would be examples of these. Ethos as a term stands for a bundle of moral norms and expectations and is the inner commitment of an individual to adhere to certain norms. The receivers of ethos are different groups of profession.
There are three main forms of ethics: descriptive ethics, normative ethics and meta- ethics. Descriptive ethics describes the morality of individuals and groups and is an empirical theory of human behaviour. Questions which one would pose in descriptive ethics would be for instance which moral values managers have. Normative ethics gives binding assertions on how the human being should act and gives reasons of principles to act in a good and right way. An example of a question asked by people confining to this ethics would be along the lines of “manager should not lie!”
Meta- ethics gives a more scientific and theoretically based perspective and analyses linguistic elements and forms of moral declarations.
2.2 Building a Bridge to Business Ethics
Broom states that “the traffic between economic and ethics travels in both directions. Each discipline can learn from each other.” Even though an economist orientates himself around the notions of the minimization and maximization principle and the philosopher concentrates on moral legitimating- both of them- the economist and the philosopher often come to the same conclusion but from different angles. Intolerances against business ethics range from prejudices against the combination of these two seemingly contradictory sciences purporting that business ethics is an oxymoron (cp. Collins 1994) to claims that business ethics is only a marketing tool or is fashionable at the moment. However, Max Weber states “Aufgabe der Wissenschaften (ist es), Tatsachen zu beschreiben und zu erklären (bzw. zu verstehen), nicht aber Werturteile zu fällen.“
Nevertheless it is abundantly clear that ethics and economics use different languages. Ethics addresses issues of good and bad or morally right versus morally wrong while economists differentiate between monetary and non monetary[2]. The trend of the overall development goes towards interdisciplinary research, towards internationalisation, orientation on the praxis and key qualifications.
Business ethics can be split into different levels as the following table shows:
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Figure 1: Different Levels of Business Ethics
To give an example, the micro level would ask about the moral of managers, the meso level about the orientation of stakeholders, the macro level about economic systems and a general framework and finally the super level would engage in the problems of the third world and globalization. The primary aim of a corporation is the sheer survival whereas the secondary aim is to “survive” on a high quality level adhering to all layers. Individual ethics declines from the micro to the super layer in contrast to institutional ethics which increments from the micro to the super layer. The concept of responsibility is traditional bound to an individual. The question which now arises is whether a corporation actually has a conscience so that there is a collective or corporative responsibility. Hence a transfer takes place from the micro to the meso layer. A moral projection is carried out, thus corporations have, analogous to an individual, responsibility. Sense of responsibility, chargeability and a readiness to take on responsibility are core issues for corporations. What exactly is understood under the term corporate social responsibility (CSR) will be scrutinized in the next paragraph.
2.3 Corporate Social Responsibility
As a starting position Corporate (Social) Responsibility and Corporate Citizenship can be seen as a reaction to social claims for social responsibility. At this point it should be emphasised that there are many diverse definitions of CSR, some ‘only’ talk about Corporate Responsibility (CR) leaving out the ‘Social’[3]. Others opt for the concept of Corporate Philanthropy. However, it is the concept of CSR which is of further relevance in this paper. The origin of CSR is unclear and only in the 60s and
70s the term has become more refined. The following table shows an overview of scientific contributions to CSR.
Author (s ) Nature of theoretical perspective(s)
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Figure 2: Scientific Contributions to CSR
(Source: McWilliams, Siegel and Wright 2006)
By CSR Archie B. Carroll (1979) conceives “the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time.” In the green paper, released by the European Commission CSR is defined as “Konzept, das den Unternehmen als Grundlage dient, auf freiwilliger Basis soziale Belange und Umweltbelange in ihre Unternehmenstätigkeit und in die Wechselbeziehungen mit den Stakeholdern zu integrieren.”
Carroll considers CSR as a concept with different layers as the following model shows:
[...]
[1] But not only the culture differs; also the character of corporations is disparate in terms of its structure, influence of the country’s heritage, different religious views…
[2] cp. Georg Simmel’s philosophy of money
[3] They view social responsibility as a sub point under the broader concept of CR