Business Ethics

Business Ethics

I. ABSTRACT

Without question "business ethics" is one of the hot topics of the day. Over the past months we have seen business after business charged with improper practices that violate commonly accepted ethical norms. This has led to a loss of confidence in corporate management, and has had severe economic consequences. Business ethics serves the important social function of integrating business and society, by promoting the legitimacy of business operations, through critical reflection. The social function of business ethics is implicit in leading business ethics foundation theories. Significant legal and ethical concepts are applied to establish the social integrative function of business ethics and to provide strong theoretical arguments against often heard criticisms of business ethics. Many of these criticisms are ideological in nature, in that they systematically play down the importance of integrative functions in the business society relationship, on the grounds of unrealistic assumption about the performance of economic and bureaucratic institutions. However, business ethics itself can also become ideological, if it forgets that the conditions for the application of ethics to business are not always ideal as well. This paper sets out to explore the potentials of a functional approach to business ethics and its relation to law.

II. INTRODUCTION

Business ethics does not stand by itself. It depends in large measure on the insights of political and ethical philosophy. Of course, it is not possible to do everything at once, and works in business ethics cannot be expected to deal with more general questions about the ultimate normative dimensions of capitalism, much less with the fundamental nature of morality and moral reasoning. Nonetheless, it is important to note three fundamental political and ethical insights that are crucial to appreciating the ethical significance of capitalism.

Rule of Law

To begin with it should be understood that "capitalism" is not a mere descriptive term. It has a normative dimension. For example, "Murder Incorporated" is not regarded as a business firm in a capitalistic system. It is something criminal. One does not have the right to offer murder as a service that can be bought. This "service" is not allowed to operate, the rule of law applies. All business are governed by law, Local, State, Federal and in some cases International. It is not ethical to knowingly break the law.

The Role of Rights

Rights are a moral concept, but they are different from other moral concepts. They have a unique function. Their function is not to directly secure the moral well-being of individuals. Rather, their function is to protect the self directedness of individual human beings and thereby secure the liberty under which individual human moral well-being can occur. Rights provide guidance in the creation, interpretation, and evaluation of political/legal systems. They protect individuals from being used by others for purposes to which they have not consented. Rights are used to determine fundamentally what ought to be a law. They provide the normative basis to law, but they do not, like the virtues, provide individuals with any guidance regarding what choices to make in the conduct of their day lives.

Morality and Moral Reasoning

In all endeavors there is the need to consider the nature of morality and moral reasoning. When it comes to making an accurate moral assessment of capitalist activities, it is crucial that a certain understanding of the moral good of human beings be considered. Otherwise the moral significance of capitalism, as distinct from the political/legal significance, will not be appreciated. It is the practical insight of individual human beings, not only in the creation of wealth but in achieving their unique form of the human good, that a system based on political and economic liberty helps to make possible.

III. BUSINESS SITUATIONS

A. Berkeley City Council - Constitutional Rights of a Business

In June of this year, the Berkeley City Council unanimously passed a resolution calling for constitutional amendments to deny constitutional rights to corporations. The Council contends that corporations are not entitled to the protections offered by the Constitution, that in fact the Bill of Rights is for live human beings only. While the resolution has no binding impact on policy in Berkeley or elsewhere, activists hope a grass-roots movement can be launched nationwide to deny corporations the rights afforded individuals.

The personification of the corporation occurred