What I have learned helps me understand the statement of inquiry, businesses interact in a global environment and are held accountable by society for their actions, as the idea of business ethics and what is morally right or wrong are the values on which societies judge businesses. If a business engages in unethical behaviour by intentionally acting in a bad manner, then there will be repercussions in terms of the reputation of the company and its ties with stakeholders, as was the case with the recent Volkswagen scandal. We looked at how businesses make decisions based on moral principles, guided by corporate social responsibility, and we also looked at when society – customers, shareholders, etc. criticised the actions of businesses when they violate their guidelines.
This relates to the global context, fairness and development, as a focus was placed on the impact a business can have on society and if it is run fairly. I learned that in order for a business to develop, it must maintain a positive relationship with both its internal and external stakeholders, and all this boils down to behaving ethically. For instance, a company like The Body Shop has built up its reputation by, for example, being vocally against animal testing. This is becoming ever-important, since customers’ expectations of ethical behaviour by businesses are constantly increasing.
The content of this topic has helped me answer two inquiry questions, how does one determine if an action is ethical?, and to what extent do businesses behave ethically?.
To answer the former, we must consider that every person has their own moral foundations (e.g. fairness, loyalty, faith), so every person’s view of whether an action is ethical or not may be different. And since ethics are based on moral principles, being ethical means choosing to do what is right over what is wrong. Sometimes the ethicality of an action is debatable, such as gathering food from an abandoned market after an earthquake, which is why many business actions are controversial.
The latter is a more complex question that depends on the particular business. It is usual for businesses to apply ethical standards to their functions, e.g. ethical policies for human resources. These will not only be published internally but also externally in annual reports, and many businesses strive to act in an ethical manner to improve the image of the business, attract new customers, reduce negative publicity, etc. However, we must be critical of the information that the business publishes, through source evaluations, as these intentions are in mind. Since businesses will want to be perceived as ethical they will not note their unethical past in their reports, which have surely been exploited by the media. As a real-life example, I have considered the company McDonald’s and tried to evaluate whether it is an ethical company or not in a monologue format:
Finally, below is a mind map of the concepts covered in this unit so far:
IB Business and Management Course Companion (Old)
The Body Shop