Business ethics

That in the United States since the 1970s was widespread field of business ethics covers the entire field of business ethics, but is more considered in comparison to the German-speaking world from the perspective of the individual enterprise, including non - working of economic organizations and their responsibility to society. A separate related to the field of economic theoretical foundation of the principles of business ethics missing mostly. Rather, it is more on the general ethics, especially the ethics of virtue and justice theories, lifted. The philosophical movement of American pragmatism and oriented to the consequences of action utilitarianism form a strong background conviction. Many approaches have no uniform standard justification, but grab eclectic back to the prevailing arguments.

Practical orientation

The literature on business ethics often sees itself as a handout for practical life and is often an appellative. Thus, the journal founded in 1987, " Business Ethics " leads the subtitle: " The Magazine of Corporate Responsibility" [ Magazine responsibility of organizations ]. A well-known textbook on business ethics is one of eight reasons for the importance of the subject and the confrontation with him on:

Corporate Social Responsibility ( CSR)

Starting point for an independent role of business ethics was the allocation of social responsibility to the company. David Burch refers to an early signature of Peter F. Drucker (The Concept of the Corporation, 1946), in which it expressed the view that companies have not only a technical but also a social responsibility to their employees, especially in the mass production. Richard T. De George sees the beginnings of a discussion about the ethics of the economy in the times of the student movement and the civil rights movement in the 1960s. As a scientific discipline, the subject in the 1970s established parallel to the intensive discussion of John Rawls ' theory of justice.

1970 Milton Friedman participated in the discussion about the social responsibility of companies with an article in the New York Times carried the provocative headline: "The social responsibility of business is to increase its profits. " This is originally a thesis of Friedman on the Munich meeting of the Mont Pelerin Society in 1970. Friedman defended the thesis that moral responsibility can be natural persons only, that managers are solely their shareholders responsible, and that the treatment of social issues and problems is the task of the state and not by business leaders. Managers are the trustees of investors invest their money to make a profit. The counter-thesis points out that companies have a legal personality and act independently of who is a shareholder or employee of the company. As an organization they have an independent personal decision-making structure and also a person-independent corporate culture. In particular, speaks to the social responsibility that companies

  • Affect their actions on society ( for example, pollution )
  • Have power with which they have to deal responsibly
  • With their services directly to the company act (products, employment)
  • Have relationships with a range of stakeholders with whom we have mutual dependencies.

Four-level pyramid

In order to delineate the scope of CSR Archie Carroll has proposed a four-level pyramid. Then you can distinguish business, legal, ethical and philanthropic responsibility of a company.

Stakeholder Management

A further development of the business ethics field created by the originally conceived as a concept for the strategic management of business approach to stakeholder management by R. Edward Freeman, who pointed out that the management of a company can only be successful if it is also the influences of the various stakeholders (stakeholders ) from its environment adequately. Stakeholders he designated groups or individuals that affect the achievement of the objectives of an organization or be influenced by this ( can ). The claim of the stakeholders founded Freeman with the categorical imperative, according to which no one should be treated merely as a means but always as an end. It follows that the purpose of a company lies not only in the profit principle. Rather, it serves as a "vehicle for coordinating stakeholder interests," the gain by the existence of the company benefits. The stakeholder approach thus presents itself in contrast to the shareholder value concept, according to which the purpose of the company is primarily focused on the interests of shareholders by maximizing profits. " An interested in the welfare of its stakeholders company, however, is characterized by the just weighing and considering the interests of all stakeholders and integrated by the financial, political, environmental and moral factors of economic activity. " From this altered purpose, the demand results after the establishment of management instruments to enter into a dialogue with stakeholders.

Judging by the term " stake" (share, use ) of the term stakeholder includes those parties that have invested in a company. Here then are only equity and debt investors and employees who have contributed their human capital in the company recognized. A little further, the term scope when all the detected which are connected directly to the company by contract. Here also suppliers and customers come into view. Only with the extended provision that as each stakeholder applies who has a legitimate claim to the company, it detects the government, municipalities, associations, trade unions and others. In particular, then come the people in the view that are affected by external effects of corporate activity. In the border region are, for example, citizens' groups, the media, churches, environmental and animal rights activists. With the broad stakeholder concept results in the extremely difficult task to bring the different interests and normative ideas of individual stakeholders in line. From a normative point of view are the stakeholder concept no basis for resolving dilemmas. Therefore, managers have the task of pragmatic weighting of their decisions, with the risk of opportunism and ethical relativism is not insignificant.

One known way of classifying stakeholders comes from Mitchell / Agle / Wood, who the stakeholders according to their power (power), urgency ( urgency ) and legitimacy ( legitimacy ) divided their claims. They call the following types.:

Depending on the affiliation of stakeholders on any of these classes, companies can align their approach specific. The implementation of stakeholder management involves several steps:

  • Identification of stakeholders
  • Identifying the interests and demands of stakeholders
  • Analysis of the importance to the company
  • A strategy for dealing with claims ( defensiveness, monitoring, integration or cooperation )
  • Development of policies and measures for dealing with stakeholders

As an instrument for implementation is suitable, for example, a balanced scorecard, in which the different perspectives on specific issues and conflicts (stakeholders, businesses, process, finance) recorded and can be matched to each other.

Corporate Citizenship

The term corporate citizenship comes from practice and has also become the subject of scientific literature increasingly since the 1990s. An important impetus was the signing of the joint declaration " Global Corporate Citizenship - The Leadership Challenge for CEOs and Boards " by 40 multinational companies (MNCs ) at the World Economic Forum 2002, including ABB, German Bank, Philips and Renault.

The relatively new term is used with different content:

  • Eng taken it refers to the philanthropic activities of a company according to the Pyramid of Carroll ( see also above).
  • It is also used equated with corporate social responsibility.
  • In a broad understanding of business to be construed as an institutional economic citizen, which play an active role in policy development.

According to the broad concept companies have in addition to the state's duty to protect civil rights, to enforce and facilitate the preservation of those rights. In the social sphere, this means commitment for the unemployed and homeless, support of educational institutions or improving the infrastructure at the community level. This is especially true when MNEs operate in underdeveloped countries. Especially in countries where the political infrastructure is insufficiently developed, companies are also required for the enforcement of civil rights, be it the fight against child labor, improve medical care, the use of anti-discrimination or much more. At the political level, citizens rights are promoted through good corporate citizenship as freedom, minimum wages or the onset of Constitutional and administrative court proceedings or the fight against corruption.

Institutionalization

Wieland calls for the differences in approach in the United States to the European practice of business ethics legal, but especially historical and cultural reasons. So there is in Germany in labor or stipulations in collective agreements very detailed rules, which are not offset by corresponding provisions in the USA. In particular, no rules for participation and the presence of workers and trade unions on the boards. In the United States dominates an individualistic conception of the world, with a uniform value structure through immigration and reinforcing pluralism is restricted. Business ethics Management helps companies within their organization a common orientation for their employees build.

Over the last few decades in the 20th century, the legal framework conditions have changed for companies in the U.S.. An important beginning was the legal equality of minorities by the Civil Rights Act of 1964 and Executive Order 11246 by President Lyndon B. Johnson, who significantly contributed to the enforcement of prohibitions on discrimination. The rethinking of the environmental policy identifies the United States Environmental Act with establishment of the Environmental Protection Agency ( EPA) in 1970. Consistently the policy was in the area of ​​corruption with the Foreign Corrupt Practices Act of 1977, which led to the fact that the U.S. international focus championed an anti-corruption legislation, in order to mitigate potential competitive disadvantages for American companies.

The legal background receives a special significance for the implementation of Business Ethics, if one includes the American case law into consideration. In violation of the law, not only the actors but also companies can be subject to penalties, which may partly achieve delicate proportions of more than 100 million U.S. dollars. If companies can prove the other hand, that they have established an effective system of Business ethics management to prevent such violations, the pending penalties of up to 90 % can be lowered again in concrete cases. This is based on the Sentencing Reform Act of 1984, a provision for the national standardization of sentencing, which received a chapter eight in 1991, which deals with a ( tighter ) sentencing for companies ( Chapter eight: Sentencing of Organizations). As mitigating circumstances ( mitigating factors ) " shall apply:

  • The existence of standards and procedures that are likely to reduce illegal conduct of employees;
  • The establishment of a responsible employee who supervises the program;
  • Teaching these procedures and standards through publications and seminars employees;
  • The establishment of a reporting system in order to verify compliance with the standards can
  • And eventually shown to have this program also carried out permanently. "

To ensure these requirements has become common that companies should have the following institutional facilities:

  • Ethics - Code (Code of Conduct, Code of Ethics )
  • Ethics Committee of the Board of Directors (Committee on the Management Board and / or the Supervisory Board )
  • Ethics Officer / Business Conduct Officer (there is even a professional body)
  • Audit programs for which there are specialized certification company
  • Ethic Hotline

Another important motive for the establishment of business ethics management is the award of public contracts. In the U.S., often companies that are due to their behavior in public criticism or have violated such rules, not considered in the award of public contracts. A well-known example is the U.S. Department of Defense. Thus, the Defense Logistics Agency even the Aircraft Engine Division of General Electric temporarily disabled as suppliers. As a consequence, a number of companies to the Defence Industry Initiative on Business Ethics and Conduct ( DII) have joined forces to develop and implement common ethical guidelines.

Due to the importance of the topic are available at all business schools of the universities of lectures and seminars on business ethics, which are also mandatory part. In addition, there are a variety of free Center for Ethics, operate partially supported or sustained by religious institutions, the teaching, research and consultancy in Business ethics.

Virtue ethics Profit maximization United States Environmental Protection Agency Stanford Encyclopedia of Philosophy
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