Ethical Theory and Business

The Corporation gives many examples of injustices to humans are given, it specifically discusses the use of sweatshops, which can be analyzed using Kantian ethics to prove that many corporations are acting unethically. In the pursuit of profit, many corporations choose to open factories in foreign countries to take advantage of the cheap labour. These factories are known as sweatshops and are categorized by their horrible working conditions, use of child labour, compensation that is too low to support family, purchase adequate food, or fuel the local economy. Once an economy a sweatshop operates in begins to grow and corporations are unable to continue hiring workers at low wages they often leave the area and relocate somewhere that people will work for lower wages. This situation shows that corporations who engage in sweatshop use are using their workers exclusively as a means to their profit ends.

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The fact that the workers are forced to work in horrible factory conditions shows that corporations are not treating their employees with respect and are not taking into consideration their employees’ judgments, concerns, and needs but instead treating them as a piece of machinery completing a task to generate profit. Also, the fact that corporations often relocate when they can no longer supply jobs at extremely low wages, essentially abandoning communities, shows corporations’ negligence in their negative obligations to not treat humans merely as a means to an end, and their positive obligations to ensure the development of rational and moral capacities. By abandoning a growing economy they will leave the community to deteriorate to an impoverished state quickly allowing new corporations to come and reuse these people as a means for profit. In the scenario of sweatshop use corporations are disrespecting their employees and using them exclusively as a means to their profit ends, which by Kantian ethics constitutes an unethical corporation.

Corporations may take objection in the fact that many situations where one person would say a worker is being used exclusively as a means to an end is quite subjective. Some things that are considered basic needs or concerns of workers in North America may be of less importance to workers elsewhere. While it is the case that the treatment of workers is very subjective, the nature of sweatshops wherein they establish themselves in communities and leave when labour becomes too expensive illustrates quite explicitly that the goal of the corporation is to exploit people’s poverty. This mentality of exploitation and abandonment, while subjective in terms of morality, illustrates the use of humans exclusively as a means to an end, showing that corporations are acting unethically by Kantianism.

The primary idea of managing for stakeholders is that it is the responsibility of the corporation as a whole is to create as much value as possible for the stakeholders in a company (Beauchamp, Bowie, Arnold 64). Stakeholders are defined as “those groups without whose support, the business would cease to exist” (Beauchamp, Bowie, Arnold 63). For corporations these groups include financiers, employees, suppliers, communities, and managers (Beauchamp, Bowie, Arnold 61). Based on the premises of managing for stakeholders, to maximize value for these stakeholders business executives must provide returns for their financiers, ensure security, wages, benefits, and meaningful work for employees, provide their suppliers with fairness and transparency, and for communities they should refrain from exposing them to unreasonable hazards and should operate in a transparent manner (Beauchamp, Bowie, Arnold 62).

By stakeholder theory, operating in this manner constitutes ethical operation by a corporation. Within The Corporation, much behaviour of corporations discussed is extremely contrasting to those of the aforementioned behaviours expected of an ethical corporation. After analyzing corporations as a human being The Corporation came up with many behavioural characteristics that contrast how an ethical corporation would approach stakeholders. These behavioural characteristics included callous unconcern for the feelings of others, incapacity to maintain enduring relationships, reckless disregard for the safety of others, and deceitfulness.

A corporation with unconcern for others is disregarding the importance of their stakeholders, failure to maintain enduring relationships shows lack of security provided, disregard for safety shows a degree of unfairness to their employees and lastly deceitfulness means that a corporation is acting without transparency to it’s stakeholders. A corporation that has these characteristics inherent in it’s business model is not approaching its stakeholders with any type of regard and instead pursuing profits at their expense, thus not maximizing value for it’s stakeholders Acting in this profit pursuing way without regard to stakeholders is contrasting to the criteria of ethical operation by the managing by stakeholder theory, thus meaning the corporation is acting unethically.

Many corporations reject the managing by stakeholder theory by defending their fiduciary duty. Corporations claim that their stockholders are the most important entity to them and their priority is to provide the greatest returns possible to these people. While it is true that upon going public corporations do have a duty to provide returns for shareholders they also take on the new responsibility of being recognized as a legal person. Unlike real living persons, corporations are incapable of having inherent in them concern for their stakeholders’ wellbeing, making it easy for them to focus on profit pursuit.

This flaw in corporations as a person should be addressed by requiring them to treat stakeholders with a certain level of respect and humanity as a normal person would. It is unfair to make a distinction between how legal and actual persons should treat their stakeholders, thus the weight that corporations put on fiduciary duty should be lessened and balanced with their moral duties to the people and communities that support their business.

Through the analysis of evidence about the actions of corporations from the documentary The Corporation, it has been shown that many corporations do no take into the account the rights of groups that their business practices effect, they continuously use humans as an exclusive means to their profit ends as though they are equivalents to machinery, and fail to recognize their ethical duty in providing certain respects and freedoms for their stakeholders. These actions, when analyzed using Rights Theories, Kantianism, and Managing by stakeholder theory show that many corporations do act unethically in the pursuit of profits, in turn causing negative effects for society.

Works Cited

Beauchamp, Tom L., Norman E. Bowie, and Denis Gordon. Arnold. Ethical Theory and Business. 8th ed. Upper Saddle River (N.J.): Pearson, 2009. Print. The Corporation. Dir. Mark Achbar and Jennifer Abbott. Big Picture Media Corporation, 2003. DVD