B100 An introduction to business and management

Exercise 1

Spend approximately 15 minutes on this exercise. Having read through the example above, make some notes on the following questions:

1 Who do you think is to blame for the Bhopal disaster?

2 Were the authorities right to pursue the chair of Union Carbide through the criminal courts?

3 What are the main lessons that you think business managers can learn from this story?

Comment

The answers to the questions above are to some extent a matter of opinion. However, based on the case information, here are some thoughts:

1 Most commentators agreed that Union Carbide India Limited and its parent company Union Carbide Corporation had a responsibility to maintain the plant in good and safe working order and had failed to do so. Even if an act of sabotage by a worker had taken place (whether this was the case remains a matter of debate to this day) it was still the company’s responsibility to make sure such things could not happen. The courts found Union Carbide neglected its duty to keep the plant in safe working condition and was fined accordingly. It could also be argued that the authorities that had allowed the settlement to spring up so close to the plant carried some blame. In addition, perhaps the Indian authorities should have exercised tighter regulatory control over the plant and are to blame to some extent for not doing this

This reading will first define business ethics. It will then consider the legislation and regulation covering the activities of business and how following the law and rules differs from applying an ethical lens to activity.

1 Defining business ethics Business ethics is a field of study concerned with judgements about what is right and wrong within the area of business (and other organisational) practice. However, this definition conceals in its simplicity a range of more complicated issues.

In reality business ethics is mostly not about right and wrong but about ‘wrong and more wrong’ or ‘almost-right and a-bit-wrong’. In other words, business ethics is often about dilemmas:

. dilemmas that have to take into account complex contexts

. dilemmas that acknowledge managers very often operate from a basis of incomplete information

. dilemmas that acknowledge managers often operate from a basis of insufficient time

. dilemmas that look very different depending on the theoretical and practical position from which they are viewed (Lawton et al., 2013)

Imagine you are a manager leading the project outlined earlier to build new homes in the London area on unused land owned by The National Grid. In order to make sure you make the right decisions you want to consider what the main concerns of the key stakeholders (i.e. individuals or groups ofpeople affected by this project) are. Make some notes on one main concern you think each of the following people might have:

In conclusion, adopting an ethics perspective is concerned with refining judgement and finding a way of balancing and evaluating competing claims. This balancing act often involves a set of key questions:

. How do businesses balance their need to make a profit for their owners with the need to contribute to the broader good of society?

. How far should businesses go in contributing to the wellbeing of society?

Reading 46: Introduction to business ethics

. Where do the responsibilities of business begin and end? Businesses might, more often than not, want to do the right thing but are constrained by living with limited resources, time pressures and budgets. These issues will be discussed throughout the readings that follow.

. an employee of the housing company that will build the new homes

. a shareholder of the housing company

. a potential homebuyer

. a member of an environmental advocacy group