Week 9 Reflection

This week we had a discussion question that concerned business ethics.  The question concerned whether there was a crisis in business ethics currently.  I answered in the negative as business currently work in the same way that it always has.  Our text talked about two different philosophies of ethics that business must follow, the shareholder style and the social contract style.  The share holder declares that the business should only be concerned with the priorities of the shareholders as long as the law is followed.  The concern is of course to make money.  The second method is the social contract theory that says that business must operate under the constraints that society places upon the business as the business can only exist under the consent of the society.

Businesses obviously wish to follow the shareholder theory while those outside of business would wish for the social contract theory.  However businesses often forget the following the law part of the shareholder theory as there are countless examples of how businesses have ignored the law, or manipulated the law to increase profits.  Furthermore the higher level executives push to increase their personal levels of profit while decreasing their responsibility to society through paying less taxes.  The ability to accomplish a manipulation of the societal contract has also increased with the development of computer and Internet technology as it allows the business to extend its reach and work between international laws.  Executives can hide funds in offshore accounts to skip tax laws, businesses can open and close factories in third world countries that have lax laws concerning pollution or child labor.  Yet many of these things are currently legal because the social contract has been picked apart.