Business Ethics Slide

Different ethical perspectives Business objectives from ethical perspective 1 2... Theoretical ethical approachesNon-consequentialist ethics Consequentialist ethics Crane & Matten, 2010

Costs and Benefits of Ethics

Lecturer: Mr John Andre

Student: Nguyen Thi Kieu Anh – Snow

ID number: F05-014 Class: F05A

Different ethical perspectives

Business objectives from ethical perspective

1

2

Theoretical ethical approaches

Non-consequentialist ethics Consequentialist ethics

(Crane & Matten, 2010) Western modernist ethical theories

Egoism Utilitarianism Ethics of duties Rights and justice

Theoretical ethical approaches

Utilitarianism

- John Stuart Mill (1806 – 1873) – a British philosopher

- Based on the consequences of action

- Do the most good for the most people

Categorical Imperative

- Immanuel Kant (1724 – 1804) – a German philosopher

- Right is right, wrong is wrong, no matter what consequences are

(Crane & Matten, 2010)

Absolute ethics Relative ethics

Similarities The standard to determine rightness and wrongness of action

Differences

Rules are consistent and universal.

Judgment of right or wrong depends

on different situation.

A situation is always right or always wrong, whatever results

or reasons.

Nothing is inherently right or wrong, ethics is just to give some advantages (social, economic,…)

Objective sense Subjective sense

Compare and Contrast

Kill 1 patient to save the other 5 patients who are waiting for life-saving transplants If not, all 6 patients will die.

Example

- Absolute ethics: Killing is always wrong, whatever the

circumstances (everyone has right to live).

- Relative ethics: Kill 1 patient to save 5 is the best choices

for this situation (do the most good for the most people).

Development of theoretical ethical approaches

• Virtue ethics: Moral characters

Ex: Telling the truth or doing the good deed and not for any reward

• Feminist ethics: Care for others and relationship

Ex: Share some food or little money for beggar

Business ethics of Vedan Vietnam

Vedan Vietnam has polluted the Thi Vai River

• Vedan dumped nearly 110,000cu.m

of untreated wastewater every

months

• Contributed 82.9% to the pollution

of Thi Vai River

(Tuan, 2011)

• Vedan Vietnam is a MSG (monosodium

glutamate) plant

• Established in 1991

• Located in Dong Nai Province

ETHICAL ISSUES

VEDAN PROFILE

The head of Vedan Vedan factory

COMMUNITY

ENVIRONMENT

Impacts and reasons of ethical issue

REASON

Cutting down the cost of waste-processing

• Complicated stages

• Specialized techniques

• High cost

Thi Vai River

Impacts on operational activities of Vedan Vietnam

1 Reaction from external stakeholders

2 Financial damages

- Pay fine: VND267.5 million (current US$15,030)

- Environmental fee: VND127 billion (current $7.14 million)

- Compensation for farmer: VND569 billion ($31.970 million)

- The cost of restoring Thi Vai River

- Decline the revenue

Resident

(Complaint letter)

Government

• Suspending Vedan’s license

• Imposing administrative penalty

Impacts on objectives of Vedan Vietnam

OBJECTIVES

“As a foreign-invested company in Vietnam, apart from business objectives, Vedan Vietnam pursues the purpose of making a positive

contribution to socioeconomic development of Vietnam” (An, 2013)

Objective  Unattainable

Implication for Vedan and its stakeholders

Customers Shareholders

DECISION

Cutting down the cost of waste-processing

 Reduce cost of products

 Gain more profit to satisfy shareholders

LESSON

- Changes wrong perspectives

- Realizing the link between running business

ethically and increasing profits

IMPACT ON STAKEHOLDER

- Shareholder

- Community

- Government

GOOD ETHICS IS GOOD BUSINESS

NO ETHICS , NO BUSINESS ETHICAL BUSINESS IS PROFITABLE

ETHICAL BUSINESS GENERATES GOODWILL

UNETHICAL BUSINESS LEADS TO EXPLOITATION OF

CONSUMERS AND SOCIETY AT LARGE

Lesson for business

(Rupani, 2014)

An, A., 2013 Vedan Vietnam: Integrating Business Activity with Social Contribution

[Online] Available at: http://www.vccinews.com/news_detail.asp?news_id=29590

[Accessed 23 March 2014].

Crane & Matten, 2010 Business Ethics 3rd ed Oxford: Oxford University Press Inc.,

New York.

Rupani, A., 2014 Business Ethics [Online] Available at:

Tuan, L.T., 2011 CSR Lessons from Vedan Deeds [Online] Available at:

Vedan, n.d Vedan (Vietnam) [Online] Available at: