Ethics of the businesses

The ethical of the businesses is one of the forms of the ethical applied to a concrete field which examines:

rules and principles of the ethical in the economic context of the businesses S and Commercial S;
the various questions Moral S or ethical S which appears in the context of the economic activity of the Homme S;
and all Owe or obligation for a person who makes trade.

In general, the ethics of the businesses is a normative discipline, in which specific standards ethical S are defended then applied. This discipline judges what is well or badly, i.e. she affirms what should be made or what should not be made. With some exceptions, the ethicians of the businesses are in general not very interested by the bases of the ethical (Méta-ethics) or by the ethical justification of the fundamental principles S, whereas they are it well more by the practical matters, and all specific obligation which can apply to an economic relation .

Overall picture of the problems of the ethics of the businesses

General ethics of the businesses

This field of the ethics of the businesses has a covering with the Philosophie of the businesses, of which one of the objectives is to identify the Finalité S fundamental of a Entreprise. If the principal purpose of a company is to maximize the output of its Actionnaire S, then one could within this framework consider that it is contrary with the ethical for this company to take into account the Intérêt S and Droit S of very other Recipient.

See on this point: Recipient .

Social responsibility of the companies (in English CSR for Social Corporate Responsibility): a generic term under which one discusses Droit S and Owe S ethical S between the Entreprise S and the Civil society.

relative questions with the Right S and Owe S Moraux between a company and its Actionnaire S: fiduciary responsibility (fiduciary responsibility), concept of Recipient (stakeholder) - broader than that of Shareholder -.

the questions ethical S relating to the relations between several companies: for example a public offering of purchase (tender offer) friendly or hostile, the industrial Espionage…

questions of operating processes and direction: Governorship of company.

the illegal financing of political party or political election, by the companies.

evolution of the Law, with for example in the United States a legislative debate on the homicide by moral person (corporate manslaughter).

the instrumentalisation of ethical codes of company like pure frontage with aiming marketing.

There are also cases of crimes or abuse whose author is actually a Entreprise (corporate misuses, corporate crime).

Professional ethic

The professional ethic covers the vast ethical whole of the questions and phenomena S which emergent of particular functions or trades in the company, like the ethical of data processing, the ethical of the environment…

Ethics of finance and accountancy

creative Accounts Department deviating from the standards established to mislead the Shareholder S, analyzes financial misleading.

Offense of initiate, swindle for small naive shareholders: relative to handling (criminal) of the Financial markets.

Remuneration of the leaders: relating to excessive remunerations of the presidents and managing directors of companies (chairman).

Corruption, Bribe: if it may be that these practices serve (in the short run) the Intérêt of the company and its shareholders, it acts well anti-competitive practices or attentatoires with the values Sociétale S.

the illicit use at private ends of entrepreneurial resources (Abuse of corporate asset).

Examples: accounting scandals, Enron, WorldCom.

Ethics of the human stock management

The ethics of the human Stock management (GRH) covers the questions ethical S which occur around the relation between the employer and the employee, such as for example the Owe S and Droit S of each part towards the other in this relation.

Discrimination on the basis of of the age, the kind (Sexism), of the race (Racism), of the religious convictions, Handicap S, the sexual orientation (Homosexuality for example), of the weight or physical appearance.

Questions about the democracy on the work place and the representation of the paid ones: for example threats towards employees wanting to syndicate, breaking of strike.

Respect of the private life of the Employed S.

Denunciation by one (old) employed reprehensible behaviors hidden by its employer (for example, of an tax evasion).

Equity of the Work contract (with the prohibition of radically asymmetrical situations like slavery).

Hygiene and occupational safety (cf CHSCT).

Ethics of the sales and marketing

A communication Marketing (which would go beyond offering the products meeting the needs for the customer and to bring information on these products and the manner of getting them) can seek to handle our values or our behaviors. Does our company accept it to some extent, but which is the ethical yellow line not to be crossed?

fixing of the price, Discrimination by the prices and creaming;
practical anti-competing: they include the tactics of fixing of the prices, but go well beyond with phenomena like the handling of the honesty or the chain of provisioning (cf in particular Droit of competition);
of the specific marketing strategies: ecological make-up of practices which are not it, produced call to very low price but finally nonavailable in stock, promoter of the product being made pass for a customer and dissimulating that he works with the profit of the company marketing the product, viral Marketing, Spam, pyramidal Vente, introductions of Obsolescence deliberated into the product to push with its premature renewal;
contents of the advertisements: deceptive advertizing attacking a Competitor , subliminal messages, use of erotic images to hang the glance;
marketing targeted on the children;
Black-market, Grey market.

See also: Critical of the communication marketing, Misinformation, techniques advertizing.

Example: Advertizing techniques of Benetton.

Ethics of the production

This field of the ethics of the businesses treats for a company of sound To have to make sure that its products and its production processs are not harmful. Some of the dilemmas more shouting in this field come owing to the fact that very produced or production process generally includes/understands a certain degree of Danger, and that it is difficult to define a degree of permissiveness, or that this degree of permissiveness can depend on elements changing like the state of the Technologie S of prevention, or the level (evolutionary) of the acceptable type of risk or not.

Produced and services, creating a dependence, or by dangerous nature;
relations ethical S between the company and its Natural medium: Pollution, ethical of the environment, right to pollute with CO2;
problems ethical S posed by new technologies: food containing Organization genetically modified, and other applications of the Precaution principle;
ethical relating to the tests of the products: Right of the animals and use of animals in Experimentation S of products, call to populations in precarious economic position (such of the students for example) like objects of tests of drugs.

Examples: Catastrophe of Bhopal, Asbestos.

Ethics of the Intellectual property, the Knowledge S and competences

The Knowledge S and the Compétence S have value, but are not objects easy “to have”. It is not simple to decide either which should have the most Droit S on an idea:

the company which trained its employee or the employee himself?
the country in which the Plante pushes or the company which “discovered” and developed the medical potential of this plant?

All that thus gives place to attempts at claim of Propriété and to conflicts relative to this property:

economic Intelligence: up to what point must one place the Intérêt of a State above that another, the methods of economic intelligence always respect-T the laws, or they often do not derive-T towards the industrial Espionnage, which is made easier by the opening of the network Internet and the open Sources;
violation of Patent, Copyright or Registered trademark;
abusive use of the system of Intellectual property to choke the competition (obvious misuse, copyright misuse, obvious obvious troll, submarine);
the concept even of Intellectual property was criticized on the ethical ground: cf intellectual property;
Employed raiding: practice consisting in attracting the Employed S key from a Competitor , to draw an unjust advantage from the Knowledge S or Competence S which they have;
the fact of employing all the most talented people in a precise field, independently of the real need that the company has of their talent, with an aim of preventing the competitors from recruiting these talents;
Bioprospection (ethical) and Biopiraterie (éthiquement reprehensible).

Example: the private Interest S versus public interests in the Project Human genome.

Ethics of data processing

The ethics of the milked data processing in the way in which the professionals of the Informatique make a use of information and make decisions taking into consideration ethical criterion S.

See Ethical article data processing.

International dimension of the ethics of the businesses, and ethical of the economic systems

These two topics here are gathered because they represent a vision much vaster (in fact world) of the problems of ethics of the businesses.

International dimension of the ethics of the businesses

Whereas the ethics of the businesses emerged as a field of Connaissance in the Années 1970, the international prospect for ethics of the businesses (somebody does it know which is the devoted French term??? welcome corrections in all this paragraph) --> emerged only at the end of the years 1990, following thus quite naturally the developments of the Mondialisation of this last decade of the century. A great number of practical problems are arisen of the internationalized context of the businesses. Theoretical questions, like Cultural relativity of the values ethical S, received a very detailed attention in this field. Other older problems can also be gathered here.

The question is all the more vital as ethics underlies decision makings which lead to regulations on the international business, like those of the international Chamber of commerce.

The problems and under-fields include/understand:

the Universal search for values S like bases for the behaviors in the International business;
the comparison of the Tradition S of ethics of the businesses in the various countries;
the comparison of the Tradition S of ethics of the businesses of the various families of religious thought S;
the ethical questions which emergent within the framework of the international Transaction S, such as for example the Biopiraterie of the drug company, the movement in favor of the Equitable trade or the questions of Price of transfer;
great subjects like the Globalisation and the cultural Impérialisme;
the heterogeneity of the social norms through the world, for example the Work the children, or the heterogeneity of the social norms in Europe;
the arbitrations which the multinational corporations operate while benefitting from the differences between the countries, in particular by delocalizing their production (clothing for example) and their services (for example centers of calls) in countries with not very expensive labor.
permissiveness towards the international business with the States bet.

Ethics of the economic systems

It is about a field which is only very vaguely defined, perhaps not a part but rather a field related to the ethics of the businesses, the field where the ethician of the businesses, venturing in the fields of the political economy and the political Philosophie, seeks to distinguish the good of the evil in the various systems of distribution of the economic appreciations. The work of John Rawls (1921 - 2002) is a remarkable contribution in this field.

Theoretical problems in ethics of the businesses

Conflict of interests

The ethics of the businesses can be looked since several points of view, in particular the point of view of the employee, the business enterprise, and the company as a whole. Very often, of the situations present themselves in which there is a conflict between one or more these recipients, for example a situation which answers well the interests of one of the parts but the detriment of one or several others. For example, something of good for the negative employee but for the company or the very whole company. Certain ethicians (as for example Henry Sidwick) consider that the most important role of ethics is the harmonization and the reconciliation of the conflicts of interests.

Ethical questions and approaches

The philosophers and other people are in disagreement on the finality of the businesses in the company. For example, some suggest that the principal purpose of the businesses is to maximize the financial output of its owners or in the case of a quoted on the stock exchange company, of its shareholders. Therefore, according to this prospect, only the activities which increase profitability and the value for the shareholders should be encouraged. Some even think that the only companies likely to survive in a competitive market are those which place the maximization of the profit at the top of all the remainder. However, some point out that, in their own interest, the companies must respect the laws and conform to the rules basic morals, because if they did not do it would cost them extremely expensive fines of them, a loss of license or reputation. The economist Milton Friedman is the leader of lawyers from this point of view.

Other theorists on the contrary affirm that the companies have moral duties which extend well beyond the service from the interests from its owners or shareholders and that these moral duties do not limit to the simple respect of the law. They think that a company has a moral responsibility towards its recipients, people who have an interest in his way of doing of the business, such as for example the employees, customers, salesmen, the municipality or even the company as a whole. They would say that the recipients have certain rights to watch on the way in which the company functions and some would go until suggesting that this covers even the rights of Gouvernance.

Certain theorists adapted the theories of the social Contract to the business world, the companies becoming of quasi democratic associations and the employees and other recipients seeing itself giving a say of the line of business. This approach became particularly popular following the relaunching of the theory of the contract in political Philosophie, movement largely due to the Théorie of social justice of John Rawls and to the emergence of the consensual approach for the resolution of the problems of the business world (consensual approach which is one of the aspects of dynamics for the quality which emerged in the years 1980). The American professors Thomas Donaldson and Thomas Dunfee proposed a version of the theory of the contract for the firms, which they select “integrative social contracts theory”. They postulate that the conflicts of interest are solved as well as possible via the formulation of an agreement right (to fair agreement) between the involved parts, using a combination:

of the macro principles that any rational person will accept as being universal principles;
of micro the principles formulated by the agreement in question between the parts concerned.

The critics of these prospects say that the defenders of the theories of the contract neglect an essential point, namely that a company is the property of somebody and not a mini-State nor a way of spreading social justice.

Ethical problems can appear when companies must respect multiple and sometimes contradictory references legal or cultural. The question arises, for example, to know if a company must respect the law of its country of origin, or on the contrary to apply only the less constraining law of the country in the process of development in which it makes deals. As illustration of this question, the law of the United States of America prohibited the companies from paying bribes in their country of origin like abroad; however, in other parts of the world, the bribe is a habit, a way agreed to make deals. Similar difficulties can occur with regard to the laws on the child work, on the staff safety, the duration of the work, the wages, discriminations and environmental protection.

Sometimes it is claimed that the Loi of Gresham of ethics applies. This law wants that the bad ethical behaviors drive out the goods. It is said whereas in a competing environment, the companies which survive are those which are conscious that their only role is to maximize the profits. From this point of view, the competing system pushes with an unfavourable vicious circle with ethics.

Rushworth Kidder worked out an attractive method to consider the ethical conflicts. It calls it a “trilemme”. Instead of feeling wedged in the binary choice between violating your ethical principles and doing something of painful but of ethics, it suggests seeking if there would be a third way, unexplored.

Ethics of the businesses applied

Code ethical of company

One can see in the " Charter of good behavior bound for the companies multinationales" development pâr the United Nations in the years 1970 the ancestor of these codes of conduct and charters ethical.

Many companies wrote internal policies relating to ethical control their employees. These policies can be:

of simple general exhortations (often called ethical principles of the company);
or on the contrary to be more detailed instructions, containing specific requirements of behavior (they then are often called ethical codes of the company).

These policies have the aim of expressing waitings which the company has towards its employees and to propose with the latter a guide on the way of managing the ethical problems most current which can occur in practice of the businesses in this company. It is hoped that such a policy will lead:

with a greater conscience of the ethical stakes;
with implementation a coherent;
and to avoid any ethical disaster.

More and more of companies also require that their employees take part in a seminar relating to the behaviors in the businesses, which frequently include/understand a discussion of the policies of the company, legal case studies and requirements. Certain companies even require that their employees sign a document indicating that they will apply the codes of conduct of their company.

Everyone is not in favor owing to the fact that the policies of companies must decide ethical character of the behaviors. Some affirm that the ethical difficulties are taken better into accounts while being based on the fact that the employees use their own critical spirit, rather than preestablished rules.

Others think that the ethical policies of company are basically anchored in utilitarian considerations, that they mainly aim limiting the legal responsibility for the company or at attracting each other the favors of the public by giving the impression to be a socially responsible company. In the ideal, the company will avoid a law-suit because its employees will have observed the rules. If a lawsuit were however to take place, the company will be able to affirm that the problem would not have occurred so only the employee had correctly applied the ethical policy of the company.

There is sometimes a shift between the ethical policy of a company and the real practices of this same company. Thus, that these real practices are explicitly sanctioned by the hierarchy or not, they make that the ethical policy of the company seems to be a simple tool marketing, or worse, that the company has a double game.

So that it is effective, the majority of the ethicians suggest that an ethical policy should be:

constant without any ambiguity by the highest levels of the hierarchy, in their speeches as in their acts which constitute as many examples;
explained in writing and orally, with regular recalls;
applicable… i.e. the employees all must be able to include/understand it and to implement it;
controlled by the highest levels of the hierarchy, with audits of routine on its its improvement and implementation;
specified by the very explicit talk of the consequences for any employee who would disobey this policy;
of neutral contents and not sexist.

Ethical director

Ethical directors (sometimes called in English `' ethical officers'' or `' compliance directors'' or'' business conduct officers'') are named formally in companies since the middle of the years 1980 (in the United States of America).

One of catalysts of the creation of this new function was a series of scandals, frauds, corruptions and abuses which sullied industry with the defense of the United States at that time. This led to the launching of the initiative of industries of Defense (DDI, or `' Defense Industry Initiative''), a transverse initiative intended to promote and guarantee practices of ethical businesses. This DDI worked out comparative reference for ethical management in the companies. In 1991, the American association of the ethical directors (Ethics Officer Association) was founded in the Center for the ethics of the businesses (Center for Business Ethics) of the Bentley university in Waltham in Massachusetts (close to Boston, the USA), as an professional association of those which have as a responsibility to direct the efforts of their company or organization to reach the best practices as regards ethics. Association was quickly joined by many members (and counts 1.100 of them today) and quickly was made up in independent organization.

Another critical factor in the decision of the North-American companies to name an ethical director was the publication in 1991 of the Federal Sentencing Guidelines for Organizations (federal recommendations for the sorrows concerning of the companies), a document which defines the references that any organization (large or small, commercial or not) must respect to obtain a reduced sentence if it owed one being day condemned for federal crime. Although intended for the judges to help them in their judgments, this document had a considerable impact while contributing to establish a reference of the best practices.

In the context of many scandals of companies between 2001 and 2004 (concerning large companies like Enron, WorldCom and Tyco), in the United States, even of the small and medium-size companies started to name an ethical director. Often, they are directly attached to the managing director and are responsible for the evaluation of the ethical consequences of the lines of business, of the writing of recommendations on the ethical policy of the company and information circulation towards the employees. They are particularly interested by the detection and the prevention of the nonethical or illegal actions. This tendency is partly due to the last laws Sarbanes-Oxley in reaction to the scandals quoted above. An associated tendency is the introduction of directors of evaluation of the risks, which evaluate how the investments of the shareholders could be affected by the decisions of the company.

The frauds and/or corruptions having also reached let us organisaitons them international which intervene more and more in the field of the commercial sanctions, the problem of the safeguard of the éthqiue was practically posed there in the same terms as for the private companies. When well even these organisaitons are not in the search of any profit, they can nevertheless be confronted with questions of an ethical nature. It is thus for example scandal of the business food against oil where acts of corruptions to the center even of Organisaiton of the United Nations are suspected. Thus, to answer this kind of questions, it was created into 2006 within the United Nations an office of the deontology. (http://www.aidh.org/mill/06-annan.htm).

The real impact of the ethical directors on the places on the market is not clear. If the nomination is made mainly in reaction to the legislative requirements, one could expect a minimal effectiveness of the action of these directors, at least in the short run. This is partly explained by the fact why the ethical practices in the businesses result in fact from a culture from company which systematically grants value to the ethical behaviors, a culture and a climate which in general emanate the top of the organization chart. The simple installation of a position of director to supervise ethics has all the chances not to be enough to inculcate an ethical behavior: a vast systemic action plan with the support over the duration of the executive directors of the company will be necessary.

The foundations of the ethical behavior go well beyond the culture of company and the codes of conduct of a given company, because they as depend very strongly on the moral formation as an individual receives in his first years, other institutions which assign this individual, of the competitiveness of the environment of business in which the company is and in fact, of the very whole company.

Religious prospect on ethics for the businesses

Many religions have vast whole of texts or codes on accumulation and the use of the richness and many companies are based on these ethical recommendations for two reasons:

like consequence of the religious convictions of their owners and leaders;
as way of making sure that their actions are in conformity with the ethical standards of the local community not having another written ethical reference.

Christian prospect on ethics for the businesses

In the Christianity, the bases of the Théologie are the Bible, made up of the old and the New Testament. The catholics add the Tradition to it (see catholic Théologie).

For example, Jesus request with his disciples: “And if you lend to those of which you hope to receive, which liking will know you one? ” (Luc 6,34).

Although it can be a question of a general injunction to the satisfied benevolence, this verse was also read at certain times of the History like a judgment of the loan with Intérêt or Usure, particularly when the loan takes place of a believer to a believer: the idea is that a Christian being turned towards the eternal life, it is in the final analysis God which rewards the lender rather than a Intérêt that one would take on the Prêt that one grants.

In fact, Christianity cannot refer to only one text of the Bible to define a position compared to the money. It is necessary to take account of the whole of the texts of the Bible and the Tradition (Catholicism), to surely decide.

Here a small selection of texts of the New Testament which are in direct relationship with the money (we let us take as reference the Bible of Jerusalem, who seems to us surest, to see Traductions of the French Bible).

God and money:

“No one cannot serve two Masters: or it will haïra one and serve the other, or it will stick to the one and will scorn the other. You cannot serve God and the money. ” MT (6, 24)

Parabola of the pitiless debtor MT (18, 23-35)

Parabola of the workmen sent to the vine (called sometimes last-minute helper) MT (20, 1-16)

the chiefs must be useful. MT (20, 24-28)

“That which will want to become large among you will be your servant and that who will want to be the first among you will be your slave. Thus the Son of man did not come to be been useful, but to serve and give his life in ransom for a multitude.”

driven out salesmen of the temple MT (21, 12-17)

the tax due to César MT (22, 15-22)

“thus Return in César what is in César and God what is with God”. With these words they were very surprised and, leaving it, they from went away (short extract).

Parabola of the talents MT (25, 14-34)

the rich man Mc (10, 17-22)

the danger of richnesses Mc (10, 23-27)

It is easier with a camel to pass by the hole of the needle than to a rich person to enter the kingdom of God.

Parabola of good Samaritan LLC (10, 29-37)

not thésauriser LLC (12, 13-21)

To sell its goods and to make alms LLC (12, 33-34)

lost drachma LLC (15, 8-10)

faithful intendant (or skilful manager) LLC (16, 1-8)

good use of money LLC (16, 9-13)

Against the pharisees, friends of money LLC (16, 14-15)

the bad rich person and poor Lazare LLC (16, 19-31)

notable rich person LLC (18, 18-23)

Parabola of mines LLC (19, 11-27)

See also New Testament for the list of the Parabola S in the Gospel S.

Jewish prospect on ethics for the businesses

The base of all the Jewish law is the Torah; one finds there more commands on the Cacheroute (conformity) of his money that on the cacheroute of food (cf 613 commands or mitzvot ). These precepts are developed in the Mishnah and the Talmud (particularly in one of the ten Nezikin ), then are then described in the codes of Jewish law of the Halakha (as in Mishné Torah , 12th century; Choulhan Aroukh particularly in its section Choshen Mishpat , 16th century). A vast whole of subjects relating to the ethics of the businesses is approached in the corpus known as responsa (answers) in Latin or She' elot u-Teshuvot (questions and answers) in Hebrew, who is concerned with practical applications.

Other writings also approach this ethical dimension. At the 19th century, the Rabbi Israel de Salant, founder in Eastern Europe of the movement Mussar , sign that just like one pays attention well so that its food is casher, one should make sure that its money is well gained in a way casher (Israel Meir Kagan in its first book Chofetz Chaim in 1873, Sfat Tamim , chapter 5). The lesson goes much further: one very largely refers to the oral tradition in the Torah (cf for example Kitzur Shulkhan Arukh 62:1; resulting from Talmud Shabbat 31a) that each one during its last judgment (cf Olam haba of the Jewish Eschatologie), will be seen posing like first question: “were you honest in businesses? ”

Moslem prospect on ethics for the businesses

For the Islam, the base of the law is in the Coran, supplemented by the Hadith S. The Moslem ethics of the richness includes the fact of avoiding the exploitation by the loan with interest (riba) of the people in the need, the prohibition of the Misleading advertizing; according to the Islamic law, if a salesman sells an object about it while having made untrue assertions, the purchaser has the right to see the cancelled transaction.

Buddhist prospect on ethics for the businesses

There is also a tradition to apply the principles of Buddhism in the business world. The British economist E.F. Schumacher cf. wikipedia (especially known for its book Small is Beautiful, Buddhist approach to economics published in 1972 has) wrote in 1979 Good Work , delivers in which it explores the ethics of the businesses from the point of view of the employees. Schumacher suggests a whole of alternative prospects to usual conventions for the business world and quotes the example of a company (the Scott-Bader Corporation) from which the owner transferred the actions in a foundation, giving order to this foundation to take care that the company is managed in the interest of its employees. Other Buddhist texts underline the part which work can play in the attack of the illumination (one of the elements of the Noble eightfold path defined by Bouddha is a life right ), which prohibits any role associated with violence (for example trade of the weapons); but all the elements (control, word etc) will relate to the daily control of any person in their work.

Close disciplines

The ethical of the businesses is with being distinguished well from what the Anglo-Saxons call the philosophy of the businesses (philosophy off business), a branch of the Philosophie which treats philosophical, political bases and ethical S of the businesses and economy. The ethics of the businesses takes as postulate, for example, that a private company can operate in an ethical way, those which dispute this postulate, as for example holding them of the socialist Anarchisme which affirms that the “ethics of the businesses” is a Oxymore) are thus by definition out of the field of the ethics of the businesses.

The philosophy of the businesses is also interested in questions such as:

can a company have a social responsibility and which?
the theory of the Management;
theories of the Individualism and the Collectivism;
the free will of the participants in the market;
the role of the individual interest;
theories of the invisible Hand;
requirements of Social justice;
natural Right , particularly the Property right, in bond with the companies.

The ethics of the businesses is also related to the political economy , which is the economic analysis on a historical political plan and . The political economy studies the consequences of the economic actions on the distribution of the richness. It looks at which gains and which loses at the time of the economic activities and if the distribution of the richness which results from it is right, which is a key ethical question.

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