Essay – Kant on Business Ethics

“Kantian ethics is the best approach to business ethics” Discuss. 
Here are some pointers on how to answer this type of question which you may have at A2.
There are a number of issues which are created by business activity.

  1. How businesses treat their employees.
  2. How businesses relate to the environment, for example with pollution, or sustainability, or treatment of waste.
  3. How businesses relate to their customers eg do they exploit their market power and charge higher prices.
  4. Whether businesses follow moral principles like honesty in their dealings.
  5. Whether they consider their responsibility to “stakeholders” – anyone who has a stake in the business – such as shareholders, suppliers, and the wider community.
  6. Whether the managers of a business should be paid huge bonuses and share options as an incentive to do well. This means that managers can be more concerned with short term gain, and so engage in unwise or unethical practice (example: boosting lending by offering mortgages at 110% of a property value as Northern Rock did . What happens when prices fall?

Illustrate some of these with examples, and use insights from Kant.
What does Kant say about how businesses should behave?

  1. People in business should act out of duty alone, not self-interest or desire to earn huge amounts of money. For example motivating bankers or Enron (see Enron case study on the site) through huge bonuses would be wrong.
  2. How do we derive “duties” for the businessman? The duty is a universalisable principle, called the categorical imperative (no ifs or hypotheticals), these are rational absolutes produced by a priori reason (not dependent on the situation).
  3. Example: tell the truth. Enron lied over its accounts, lied to shareholders over the level of debt, lied to California over what causing the blackouts. We cannot universalise bad practice in business because we cannot have universal miles told about prices, about nature of products etc – the market collapses under distrust. A contradiction in nature – it is self-contradictory. Customers must believe what is written on the package.
  4. We cannot Kant says treat people as only means to an end but always also as an end in themselves. We must treat people with respect, rights, integrity (properly eg do not discriminate, pay a fair wage, don’t threaten and intimidate). Enron fired 15% of the workforce every year to encourage the others – such practices are wrong to a Kantian – it is exploitation.
  5. Worse than this, immoral practice is self destructive – it demotivates people and it causes them to abandon morality themselves eg traders in California deliberately exported energy out of California to raise the price and the sold it back at a larger profit. Immoral use of market power. Ultimately they were found out – but such practice should have been unacceptable ethically.

So … because Kant divorces my behaviour from profit alone so we can conclude that Kantian ethics has its uses. But is it superior to utilitarian ethics? The classic objection to utilitarian ethics is that the rights of the few can be sacrificed for the many. Could Jeff Skilling CEO of Enron say he was serving the general good? As long as we drive the share price up, in the long run everyone will be happy – employees, community, shareholders. To Mill, concern for others was important – altruism and sympathy – but essentially “anything goes” in utilitarian ethics as long as it serves the general happiness eg sacking 15% of people every year is like killing one person to placate the mob – as long general happiness is served why care about the 15%?

For this reason Kant might be held to be superior in his ethical thinking because he stops bad practice at its source – a person’s motive and desire to do their duty alone.

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