Ethics Theory and Business Practice 4.2 Social Contract Theory Do Bad People Make Businesses Bad or do Bad Businesses Make People Bad?

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Presentation transcript:

Ethics Theory and Business Practice 4.2 Social Contract Theory Do Bad People Make Businesses Bad or do Bad Businesses Make People Bad?

aims to discuss two contrasting perspectives on the relationship between human nature and social organization to explain how these offer the basis for person-focused and culture-focused approaches to explaining and preventing unethical business conduct

a three-stage process comparing Hobbes-influenced and Rousseau- influenced accounts of: 1.the state of nature and the benefits of society 2.human nature and the impact of social organization 3.why unethical business conduct occurs and how to prevent it

stage 1: the state of nature and the benefits of society HobbesRousseau conflictual and dangerous life in the state of nature tranquil and independent enables securitythe benefits of society enables cooperation and human progress. But …

Rousseau: the darker side of society society may encourage excessive amour- propre society may inhibit compassion society may encourage unethical ‘morality’

stage 2: human nature and the impact of social organization HobbesRousseau people are naturally vain, competitive, and aggressive; people will naturally try to exploit each other human naturepeople are naturally peaceful and compassionate enables people’s innate nastiness to be controlled; ensures that people treat each other well social organizationenables the sharing of ideas, creativity, and innovation; may encourage excessive clamouring for esteem (amour-propre); and may undermine compassion

stage 3: the reasons why unethical business conduct occurs and how to prevent it Hobbes-influenced account Rousseau-influenced account person-focused approach businesspeople’s natural tendency to be vain, competitive, and aggressive has not been adequately controlled so they have acted unethically explanation for unethical business conduct culture-focused approach corporate culture (‘morality’) may have encouraged excessive pride, competitiveness, and aggression in people, inhibiting their natural tendency to act ethically ethics-management systems need to be improved so that tighter control can be exercised over people how to address unethical conduct and avoid its recurrence change the corporate priorities, behavioural norms, and notions of what is right and proper that may be encouraging unethical conduct

theory in practice phone tapping at News International: bad businesspeople or bad business culture?

key points although specific individuals may be responsible for unethical corporate conduct, we should also consider the role that prevailing norms and priorities may have played in encouraging people to behave unethically as well as considering the culpability of individuals who actually carry out unethical acts, we should consider that of senior people who establish a company’s norms and priorities tightening up ethics management may do little to prevent unethical corporate conduct if ethics management systems are out of tune with prevailing norms and priorities