Management in Society Ethics & Business

"Today, being designated a ‘good company’ entails not only striving for continuity and profitability, but also having an eye on integrity and social responsibility.

Companies are increasingly called to account on their role in society and their environmental impacts.

Public debates and stakeholder dialogues on these issues abound. Societies are becoming more complex, and companies are constantly confronted with new dilemmas, resulting from new scientific and technological developments and globalisation.

Ethics & Business describes and analyses these developments from an ethical perspective, involving comprehensive casuistry. Strategies and tools are discussed that help businesses improve the ethical quality of their decision making, such as integrity training and social and ethical audits. The book offers a fundamental framework for understanding the recent developments in integrity management and corporate social responsibility and how to put these into practice.

In 2002, Ethics & Business won the J.J.F. van den Bergh Prize for best book in applied behavioural science. The jury wrote:

“In spite of its complex subject matter, the book’s pleasant writing style and the inclusion of easily recognisable examples make it very readable. Ethics & Business is highly recommended to every entrepreneur who, as any entrepreneur should, engages in self-reflection and reflection on the business’ actions from time to time. This type of book should be part of every self- and society-respecting company’s library.”

This English edition is based on the sixth Dutch edition, that was ­completely updated and revised in 2006.

Editor

Ronald Jeurissen is professor of Business Ethics at Nyenrode Business Universiteit.

The series Management in Society treats academic and practical subjects in the fields of business ethics and corporate social responsibility, with the aim of deepening theoretical understanding and offering practical support to directors and managers. The series originated from the strategic alliance between the European Institute for Business Ethics, a division of Nyenrode Business Universiteit, and PricewaterhouseCoopers’ Sustainability Solutions Department.

Ethics & Business

Foreword to the English Edition 1

Introduction 3

Part 1 Principles

1 Business ethics and corporate social responsibility

1.1 Society demands corporate responsibility

1.2 The business ethics perspective

1.3 Ethics and profit

1.4 Is legislation not enough?

1.5 Corporate social responsibility

2 Moral responsibility in organisations

2.1 Definition of moral responsibility

2.2 Factors influencing moral responsibility within the organisation

2.3 Managing responsibility

2.4 The moral responsibility of organisations

3 Integrity

3.1 Integrity and trust

3.2 Integrity as a professional responsibility

3.3 Managing integrity

4 Values and moral norms in organisations

4.1 Values, virtues and moral norms

4.2 Moral principles

4.3 Moral rights

4.4 Justice

4.5 Utilitarian ethics

4.6 Conflicting moral principles

4.7 Moral dilemmas

4.8 Care

4.9 Are moral judgements subjective?

5 Corporate social responsibility and strategy

5.1 Corporate social responsibility or profit maximisation?

5.2 Competitive strategies for corporate social responsibility

6 Business stakeholders

6.1 Economic and social stakeholders

6.2 Stakeholders and governance

6.3 Stakeholder dialogue and co-operation

Part 2 Applications

7 Responsibility towards consumers

7.1 Product responsibility

7.2 Consumer growth (but not in a good way)

7.3 Advertising and ethics

8 Responsibility towards and of employees

8.1 Established employee core rights

8.2 Employer and employee responsibilities

8.3 Responsibility towards employees in case of job insecurity and redundancy

9 Environmental responsibility

9.1 Phases in environmental management

9.2 The environment and self-interest

9.3 Aims of environmental policy

9.4 The limited regulatory power of the government and the market

9.5 Corporate self-direction

9.6 Collective responsibility towards sustainability

10 Handling corruption and gifts

10.1 Corruption: a world wide problem

10.2 Morally wrong and illegal

10.3 Bribery, extortion, grease payment or gift?

10.4 How can companies fight corruption?

11 Ethics and international business

11.1 Western businesses and developing countries

11.2 Doing business in other cultures

11.3 Business and human rights

11.4 A theoretical framework for international business ethics

12 Investors and the need for openness and transparency

12.1 The growing interest in ethics and investment

12.2 Different investors, different information needs

12.3 The development of responsible investment

13 Organising ethics

13.1 Approaches to making employees act responsibly

13.2 Codes of conduct

13.3 Social accountability

Cases

‘Obviously… a major malfunction’ 32

Whistleblowing in the European Commission 37

A cold winter 54

Nuon’s CO2-emission rights 80

Eastern line dilemma 82

Islamic feasts 83

Caught in the act 89

The Ford Pinto 98

Child labour, the Socialist Party and IKEA 103

SBM Offshore in Burma 103

Cheapest is best? 107

Good citizenship at Fuji Photo Film 110

The consulting panel for urban renewal 110

C&A and responsibilities in the supply chain 113

NS wants to have its cake and eat it 115

Unilever plays Santa 120

Shell’s social commitment in Nigeria 124

Mondragon: a democratic experiment 130

NAM sets up internet dialogue about the future 134

Nuon’s social dialogue 134

ABN-Amro and palm oil 134

IKEA and Unicef rally against child labour 135

Okay oranges 137

Misleading advertisement for Priority Telecom 152

The Vespa buzz 155

Ban on football shirts sponsored by beer brands 156

Dumpjeschatje.nl is shocking and improper 157

Nike claims underground station 163

Dove: debate as a marketing tool 164

The black box 176

Renault-Vilvoorde: reversing a disaster 180

Gulpener beer: an example of individual self-regulation 193

Marine Stewardship Council 194

Handling gifts 209

Female textile worker from Bangladesh 212

Taboo on women in business 213

The Ogoni and Shell 213

TNT and the UN fighting hunger 220

Why Heineken did not invest in Burma 229

DBCP: a pesticide hard to control 237

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