Basic Global Business Ethics in 20 Minutes

Basic Global Business Ethics in 20 Minutes

Note: This is a very academic approach. Users who want quick and easy answers will be disappointed. It usually takes several weeks of undergraduate training and reading for students to be able to use the principles described here effectively. Please provide a comment if you would like to see more materials added. There are 10 slides with an audio commentary for each.

Overview of Business Ethics

Definition of Business Ethics

Immanuel Kant Overview


Virtue Theory and Aristotle

Ross and Prima Facie Duties

Summary of Duties in Business Ethics

Example of Plant Closing

Example - Ford Pinto Case

Summary of Business Ethics

Created on December 22, 2018



The Complicity Problem

In this Mini-Course, you will learn the essentials of the U.N. position on a worldwide problem: the treatment of workers in third-world countries. The issue is sensitive because citizens (corporate citizens and consumers) in the first world do not want to feel responsible for working conditions that seem harsh or that ignore human rights. If you are involved in sales or customer relations in the first world, the information here may help you answer questions such as: “What is your company doing to protect the rights of the overseas workers who make the products you sell?”

1. The complicity problem arises when one is directly or indirectly facilitating wrongful acts. For example, if you are selling goods made in China by a company that treats its workers poorly, you might be accused of complicity in violating worker rights. Although you might treat the workers directly employed by you very well, you are indirectly contributing to the poor treatment of workers by doing business with a company that has little respect for worker rights. Can you absolve yourself of this kind of complicity by taking it upon yourself to thoroughly inspect the working conditions provided by your supplier? It might seem so. Suppose you can give your supplier a clean bill of health in good conscience. What happens if your supplier, unbeknownst to you (and perhaps also you supplier) contracts to get some of your work done by subcontractors who are much less concerned about worker rights? Are you still guilty of complicity? How far down the supply chain should you be required to inspect working conditions? Even if I am responsible for checking out my supplier, am I responsible for checking out my supplier’s supplier? Furthermore, should not there be a distinction between what individual corporations do and what countries do as a matter of cultural practice or law? Should one person (or corporation) really be held responsible for the practices that may pervade an entire nation? These are among the initial questions one might ask about complicity.

2. The U.N. did not have good answers to these kinds of questions until recently. A basic framework for answers was provided in the 2008 “Ruggie Report.”

3. The U.N. approach to the complicity problem divides the responsibilities of moral actors (states or corporations) by distinguishing between PROTECTION of rights and RESPECT for rights. Once this distinction is made, it is easier to see which parties (moral actors) are primarily responsible for which aspects of human rights. The U.N. report asserts that states should protect the right of freedom of speech by ensuring there is no government interference with mass media. And Corporations should show respect for human rights by allowing workers access to means of filing complaints. (Note, however, that this distinction between the duties of states and corporations is NOT a strict or “sharp.” Corporations have additional duties that do not allow them to “hide” behind that idea that they can do nothing about the policies or cultural practices of the states in which they have business operations. See point 6 below.) In addition to providing protection and respect for human rights, the U.N. also asserts that a means of remedying violations of human rights must be available. These means should include both state and corporate channels for reporting violations and ensuring that they are justly corrected. Thus, the overall approach to human rights is three-pronged: protect, respect, and remedy.

4. “Respect” is an ambiguous word. The U.N. attempts to remove some of the ambiguity by further describing what “respect” means in the context of corporate activities. As shown below, respect means exercising due diligence in a three-step process.

5. For example, if you were involved in the textile industry in China, you should exercise your due diligence by evaluating the potential impacts of your activities in a variety of ways. In other words, you should carefully evaluate all the possible consequences of your actions as they relate to human rights in the broadest sense.

6. While there is a difference between State and Corporate responsibilities toward and human and labor rights, corporations cannot hide behind the fact that they need only “respect” rights in order to escape their responsibilities. They cannot, for example, choose to only “respect” selected rights. Corporations cannot escape their intrinsic responsibility not to harm. As a result, corporations should take care not to create serious harm regarding ANY forms of human or labor rights.

7. Be aware that actual legal cases have shown that corporations have been taken to court for alleged violations of virtually every Labor Right.

8. These responsibilities are deep and meeting them is time-consuming. Yet, the U.N. report did NOT explicitly state that each corporation is responsible for respecting labor and human rights ALL THE WAY DOWN its own supply chain. This is a crucial point for corporate citizens of the first world wishing to defend their labor policies in other countries. We have then, and answer to one of our initial questions. Is each corporation responsible for inspecting the labor conditions all the way down its supply chain? The answer is “No.” Each corporation is responsible only for the first level down — at least, this is the interpretation supported by our analysis here. But note the reason for this limitation! It is assumed that the obligations of corporate due diligence, respect for human rights and the duty not to harm extend to ALL corporations. This means, in effect, that human rights are automatically protected ALL THE WAY DOWN if each and every corporation performs its duties. Again, the reason for this result is that the “rules” are supposed to be universal. That is, EVERY seller should see to it that its supplier is not abusing labor rights. Therefore, the chain of responsibility automatically goes to the bottom. This, at any rate, is the logical result of the U.N. recommendations if they are universally followed. Can one trust this logical result? Can one “hide” behind the assumption that every moral agent in the supply chain will perform their moral duties? Perhaps the best answer is that one should exert reasonable and prudent efforts to ensure there are no violations of labor rights. In many cases, this will involve, primarily, investigation of immediate level suppliers and not those two or there levels down.

9. To conclude, when people ask about the protection of labor rights in your business, one might say something along the lines of the following: “Our corporate duties extend primarily to respect human and labor rights, but we do not create or protect them in the way that states do. In accordance with the U.N. Ruggie Report, we make reasonable efforts to ensure our direct suppliers comply as much as possible with international labor rights laws, to the extent that these are granted within China or elsewhere. We perform our “due diligence” by carefully examining the impacts of our actions in foreign countries. Furthermore, we understand our duty, as corporate citizens and moral agents not to harm others and we seek to avoid any actions or policies that might. We have corporate means of reporting and remedying violations of worker rights.”