Summary International Business Ethics
Lecture 1 (31-01-22)
Introduction
Why Business Ethics?
The goodness of business cannot be taken for granted
Decent ethics make good profits
CEO’s and managers are in need of moral assistance
Society at large expects decent moral behaviour of companies and organizations
It is just interesting to think about the values and norms that underlie business practices
Philosophy has a lot to say about business
It is important that people can trust corporations
Business ethics is about crossings:
between business and ethics
between business and philosophy
between ethics and continental philosophy
The idea of crossings:
implies a willingness to take a critical stance
to cross positions that have remained unanswered
to develop your own position or perspective on business problems
crossing divides
The most important ‘divide’ here is the one between analytical and continental philosophy. Business
ethics is usually firmly entrenched in analytical philosophy. In the book, we claim that business ethics
can benefit from insights from continental philosophy
Characteristics of analytical and continental philosophy from the analytical perspective
Analytical:
Language analysis
Scientific
Disciplined
Politically neutral
Methodological
Believe in progress
Real philosophy
Optimistic
Continental:
Poetry
Artistic, nonsensical
Wild, unruly
Politically left
Chaotic
There is no single truth, no progress
Rhetoric, pessimistic
Characteristics of analytical and continental philosophy from the continental perspective
,Continental:
Analysis of being
Profound
Realistic
Politically engaged
Realistic
Critical about the endeavours of science
Philosophical
Analytical:
Stuck in language games
Shallow
Naïve
Neutral, but also petty
Docile followers of science
Docile followers of liberalism
Not serious
What is business ethics?
1. It is the part of practical philosophy which studies good and bad in organizations
2. It is keen on improving the status quo in business and organizations
3. Criticism: It does not question the status quo
4. In this sense, it is not a serious ethics, and it does not provide clear cut answers
5. In some sense, the agenda of our book is to infuse business ethics with more philosophical ethics
6. We bring in continental thought in order to make this possible
Aporia Philosophical problems are deemed to be aporetic of they do not lend themselves to easy
solutions. Aporia literally means ‘no’, ‘passage’, or ‘opening’. Aporias cause doubt, puzzlement,
confusion, and even perplexity. One of the synonyms frequently used for aporetic is undecidable.
Aporias are then theoretical situations in which one cannot decide. The concept of aporia has been
pivotal in the work of continental philosophers. It is often used to undermine the idea that words,
concepts, sentences, or language as such have determinate meaning.
Lecture 2 (01-02-22)
Stakeholders
A stakeholder is any group or individual who can affect, or is affected by, the achievement of a
corporation’s purpose. Stakeholders include employees, customers, suppliers, stockholders, banks,
environmentalists, governments and other groups who can help or hurt the corporation (Ed
Freeman).
Debate between Milton Friedman (1912-2006) and Ed Freeman (1951-…).
Milton Friedman (shareholder theory):
There is just one social responsibility of the corporation: it should increase its profits (as long
as it stays within the rules of the game)
Stakeholder theory is dangerous (for it undermines democracy)
It is the task of politicians, not of entrepreneurs, to decide about the distribution of wealth
Stakeholder theory is a form of socialism
Shareholder capitalism serves the institutions of democracy and freedom much better than
stakeholder theory
, Ed Freeman (stakeholder theory):
We need a plural apperception of the relation between business and society
Isolating economic tasks from social tasks is intellectually fallacious (separation fallacy).
Thinking that economy does not belong to the social is systematically wrong-headed
Stakeholders’ interests should therefore inform strategic management
Freeman opts for a prescriptive approach; it is, however, not difficult to understand
stakeholder theory in a descriptive sense: many organizations are overwhelmed by clashes of
interests
Why does this matter?
1. In fact it is a debate about what we (society) are supposed to expect from corporations in terms of
their performance.
2. It matters in a pragmatic sense: managers are keen to know what society expects from them
3. It is politically relevant: are business corporations better equipped to solve societal problems than
politics?
4. Freeman advocates a ‘reasonable pluralism’, which is supposed to bent together the central
concepts of business with those of ethics
There is a lot of debate about so-called stakeholder capitalism (rather than shareholder capitalism).
Critics argue it is just about saving capitalism from capitalists.
Stakeholder capitalism a form of capitalism in which companies seek a long-term value creation
by taking into account the needs of all their stakeholders, and society at large.
Shareholder capitalism a corporate executives’ only social responsibility is to increase profits for
only the owners and shareholders.
Another discussion lurking in the background: Will entrepreneurs do a better job than managers or
politicians?
Michael Useem (Harvard professor): Now that same challenge faces Trump as he makes the
transition from entrepreneur and insurgent candidate to leading a public enterprise. While sharing
control with a board of directors on Capitol Hill and a judiciary whose purpose is to ensure that he
follows the rules.
Philanthro-capitalism Bill Gates, Warrant Buffet, George Soros and others are ‘hyper- agents’:
individuals who can do what it would otherwise take a social movement to do.
Motivation: ‘Richesse oblige’ is a driving spirit of philanthro-capitalism.
Philanthro-capitalism is a new way of doing philanthropy, which mirrors the way that business is
done in the for-profit capitalist world. Philanthropy is the desire to promote the welfare of others,
expressed especially by the generous donation of money to good causes.
Critique of philanthro-capitalism:
Richesse doesn’t just expect to oblige it expects to be obliged as well
The philantrocapitalist project is irreducibly undemocratic, if not indeed antidemocratic
It sets the scientific agenda (researchers go where money is)
David Rieff: what this means is that, for the first time in modern history, it has become the
conventional wisdom that private business, the most politically influential, undertaxed, and
underregulated sector among those groups that dispose of real power and wealth in the
world, as well as the least democratically accountable, should be entrusted with the welfare
and fate of the powerless and the hungry.
Back to stakeholder theory: Freeman remains optimistic about the willingness of entrepreneurs to
embark on his reasonable pluralism. Many other business ethicists are as well.
