[TO BE GIVEN TO STUDENTS TWO WEEKS BEFORE THE EXAMINATION]

ETHICS AND GOVERNANCE

BC315006S

Resit August 2010

TIME: One hour 30 minutes

Seen examination: Contexts for Preparation

You will be asked to answer any TWO questions from six that are set.
All questions carry equal marks.

Below you will find some background (‘contexts’) which will help you prepare for the
answers you must write under examination conditions. You might usefully reflect on the
different ethical perspectives that might apply to each scenario and think about any
examples or cases that can be usefully used to illustrate the points you make.

Q1
People may take one of five viewpoints on the role of values in business ethics: the
traditional, the modernist, the neo-traditional, the postmodernist and the pragmatist. The
position they take will reflect their responses to ethical issues at work.

Q2
A colleague hears a discussion on the radio in which an investment banker states that
measures of a company’s success in the field of corporate social responsibility (CSR)
will influence investment decisions in the future more than measures of current
profitability. This is because measures of CSR correlate well with evidence of effective
management. The better an organisation’s performance against CSR indicators, the
better managed it is likely to be.

Q3
The following is taken from ‘The Social Responsibility of Business is to Increase its
Profits’ by Milton Friedman.

When I hear businessmen speak eloquently about the "social responsibilities of

business in a free-enterprise system," I am reminded of the wonderful line about the
Frenchman who discovered at the age of 70 that he had been speaking prose all his
life. That businessmen believe that they are defending free enterprise when they
declaim that business is not concerned "merely" with profit but also with promoting
desirable "social" ends; that business has a "social conscience" and takes seriously its
responsibilities for providing employment, eliminating discrimination, avoiding pollution
and whatever else may be the catchwords of the contemporary crop of reformers. In
fact they are, or would be if they or anyone else took them seriously, preaching pure
and unadulterated socialism. Businessmen who talk this way are unwitting puppets of
the intellectual forces that have been undermining the basis of a free society these past
decades.

The discussions of the "social responsibilities of business" are notable for their
analytical looseness and lack of rigour. What does it mean to say that "business" has
responsibilities? Only people can have responsibilities. A corporation is an artificial
person and in this sense may have artificial responsibilities, but "business" as a whole
cannot be said to have responsibilities, even in this vague sense. The first step toward
clarity in examining the doctrine of the social responsibility of business is to ask
precisely what it implies for whom.

Q4
There have been a number of political initiatives that have attempted to address
pressing (environmental) sustainable development issues, culminating in agreements
such as the Rio Declaration (1992), the Kyoto Protocol (1997); and the Johannesburg
World Summit (2002). Implementation of the Kyoto Protocol was intended to be a major
advance in the global approach to climate change issues, with commitments to reduce
by 5.2 per cent the 1990 level of global greenhouse gas (GHG) emissions by 2012 and
by 50 per cent by 2050.

Q5
The use of child labour by multinational companies, in their factories in the third world,
to produce cheaply the products they sell in western markets became an international
issue in the 1990s and during the first decade of the new millennium. The United
Nations’ Convention on the Rights of the Child, and the International Labour
Organisation’s Declaration on Fundamental Principles and Rights at Work (United
Nations 1989) condemn the use of child labour.

Q6
In most societies, bribery and corruption is regarded as undesirable, but that does not
prevent large numbers of people in many societies from engaging in such activities. It
has been suggested that different ethical perspectives may be applied to the giving to
payments to encourage people to act in a particular way.