CONTENTS
List of figures
List of boxes
Guide to the book
How to use the online resource centre
Preface to the third edition
Acknowledgements
XVII
XX
xxii
xxiv
xxvi
xxvii
PART A
Understanding Business Ethics
1
3
1
Introducing Business Ethics
2
Framing Business Ethics: Corporate Responsibility,
Stakeholders, and Citizenship
45
3
Evaluating Business Ethics: Normative Ethical Theories
91
4
Making Decisions in Business Ethics: Descriptive
Ethical Theories
139
Managing Business Ethics: Tools and Techniques
of Business Ethics Management
183
5
PARTB
Contextualizing Business Ethics
233
The Corporate Citizen and its Stakeholders
6
Shareholders and Business Ethics
235
7
Employees and Business Ethics
287
8
Consumers and Business Ethics
339
9
Suppliers, Competitors, and Business Ethics
389
10
Civil Society and Business Ethics
439
11
Government, Regulation, and Business Ethics
491
12
Conclusions and Future Perspectives
545
CONTENTS
References
Subject index
Authors index
Countries and regions index
Companies, organizations, and brands index
557
583
602
608
610
DETAILED CONTENTS
List of figures
List of boxes
Guide to the book
How to use the online resource centre
Preface to the third edition
Acknowledgements
XVII
xx
xxii
xxiv
xxvi
xxvii
PART A
Understanding Business Ethics
1
Introducing Business Ethics
W h a t is business ethics?
Business ethics and the law
Defining morality, ethics, and ethical theory
4
5
8
W h y is business ethics important?
9
Business ethics in different organizational contexts
15
Globalization: a key context for business ethics?
17
18
20
24
25
29
30
What is globalization?
Globalization and business ethics: a new global space to manage
Globalization and business ethics: new local challenges to address
International variety in approaches to business ethics
Sources of difference between different regions globally
Globalization and the assimilation of different global regions
Sustainability: a key goal for business ethics?
The triple bottom line
Environmental perspectives
Economic perspectives
Social perspectives
Implications of sustainability for business ethics
31
34
34
35
35
37
Summary
37
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINCS
CASE 1: MCETHICS IN EUROPE AND ASIA: SHOULD MCDONALD'S EXTEND
ITS RESPONSE TO ETHICAL CRITICISM IN EUROPE?
38
38
38
39
DETAILED CONTENTS
2
Framing Business Ethics
CORPORATE RESPONSIBILITY, STAKEHOLDERS, A N D CITIZENSHIP
Towards a f r a m e w o r k for business ethics
46
W h a t is a corporation?
Key features of a corporation
Can a corporation have social responsibilities?
Can a corporation be morally responsible for its actions?
46
46
47
48
Corporate social responsibility
Why do corporations have social responsibilities?
What is the nature of corporate social responsibilities?
CSR in an international context
CSR and strategy—corporate social responsiveness
Outcomes of CSR: corporate social Performance
51
51
53
55
57
60
Stakeholder theory of t h e firm
Why stakeholders matter
A new role for management
Stakeholder thinking in an international context
Different forms of stakeholder theory
61
62
64
65
66
Corporate accountability—the firm as a political actor
Governmental failure: 'risk society' and the institutional failure of politics
Why do governments fail?
Corporate power on the rise
The problem of democratic accountability
67
67
68
69
70
Corporate citizenship
Defining corporate citizenship: three perspectives
Limited view of CC
Equivalent view of CC
An extended view of CC
Assessing corporate citizenship as a framework for business ethics
73
73
75
76
76
79
Summary
82
STUDY QUESTIONS
84
RESEARCH EXERCISE
84
KEY READINGS
84
CASE 2: THE BUSINESS OF WATER
85
3
Evaluating Business Ethics
NORMATIVE ETHICAL THEORIES
Introduction
92
The role of ethical theory
92
Normative ethical theories: North-American and European
origins and differences
94
DETAILED CONTENTS
Western modernist ethical theories
Consequentialist theories
Non-consequentialist theories
Limits of Western modernist theories
97
98
104
116
Alternative
Ethical
Ethical
Ethical
Ethical
118
118
1J9
121
123
perspectives on ethical theory
approaches based on character and integrity
approaches based on relationships and responsibility
approaches based on procedures of norm generation
approaches based on empathy and moral impulse
Summary: towards a pragmatic use of ethical theory
127
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 3: BRITISH PETROLEUM AND THE BTC PIPELINE: TURKISH DELIGHT
OR RUSSIAN ROULETTE?
131
132
132
133
Making Decisions in Business Ethics
DESCRIPTIVE ETHICAL THEORIES
Introduction
140
W h a t is an ethical decision?
141
Models of ethical decision-making
Stages in ethical decision-making
Relationship with normative theory
Influences on ethical decision-making
Limitations of ethical decision-making modeis
International perspectives on ethical decision-making
142
142
143
144
147
147
Individual influences on ethical decision-making
Age and gender
National and cultural characteristics
Education and employment
Psychological factors
Personal values
Personal integrity
Moral imagination
148
149
150
152
152
156
157
159
Situational influences on decision-making
Issue-related factors
Context-related factors
160
164
167
Summary
176
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 4: SIEMENS: |UST BREAKING THE ELEVENTH COMMANDMENT?
176
177
177
177
DETAILED CONTENTS
M a n a g i n g Business Ethics
TOOLS AND TECHNIQUES OF BUSINESS ETHICS MANAGEMENT
Introduction
184
What is business ethics management?
184
Components of business ethics management
Mission or values Statements
Evolution of business ethics management
185
185
189
Setting Standards of ethical behaviour: designing and
implementing codes of ethics
191
Prevalence of codes of ethics
Content of codes of ethics
Effectiveness of codes of ethics
Global codes of ethics
192
193
196
199
Managing stakeholder relations
201
Assessing stakeholder importance: an instrumental perspective
Types of stakeholder relationship
Problems with stakeholder collaboration
202
203
206
Assessing ethical Performance
211
Defining social accounting
Why do organizations engage in social accounting?
What makes for 'good' social accounting?
212
214
215
Organizing for business ethics management
217
Formal ethics programmes
Informal ethics management: ethical culture and climate
Business ethics and leadership
219
221
222
Summary
224
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 5: MANAGING THE ETHICS OF INTERNET CENSORSHIP: WHERE NEXT FOR
THE GLOBAL NETWORK INITIATIVE?
225
226
226
226
« * • . - :
Contextualizing Business Ethics
The Corporate Citizen and its Stakeholders
S h a r e h o l d e r s a n d Business Ethics
Introduction: reassessing the importance of shareholders
as stakeholders
236
Shareholders as stakeholders: understanding
corporate governance
237
DETAILED CONTENTS
Corporate governance: a principal-agent relation
Shareholders' relations with other stakeholders: different
frameworks of corporate governance globally
239
240
Ethical issues in corporate governance
Executive accountability and control
Executive remuneration
Ethical aspects of mergers and acquisitions
The role of financial markets and insider trading
The role of financial Professionals and market intermediaries
The ethics of private equity and hedge funds
244
245
247
249
250
253
256
Shareholders and globalization
Reforming corporate governance around the globe
257
260
Shareholders as Citizens of the corporation
Shareholder democracy
Shareholder activism
Socially responsible investment (SRI)
262
262
265
267
Shareholding for sustainability
The Dow Jones Sustainability Group Index
Rethinking sustainable corporate ownership: alternative modeis
of ownership?
272
272
Summary
279
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 6: CORPORATE GOVERNANCE OF PROFESSIONAL FOOTBALL CLUBS: FOR
PROFIT OR FOR GLORY?
280
280
281
7
276
281
Employees and Business Ethics
Introduction
288
Employees as stakeholders
289
Ethical issues in t h e f i r m - e m p l o y e e relation
290
Management of human 'resources'—an ethical problem
between rights and duties
Discrimination
Employee privacy
Due process and lay-offs
Employee participation and association
Working conditions
Work-life balance
Fairwages
Freedom of conscience and freedom of speech in the workplace
The right to work
Relevant duties of employees in a business context
290
294
303
307
310
313
314
316
318
318
319
DETAILED CONTENTS
Employing people worldwide: t h e ethical challenges
of globalization
National culture and moral values
The 'race to the bottom'
Migrant labour and illegal immigration
320
321
322
323
The corporate Citizen and employee relations
327
Towards sustainable employment
328
Re-humanized workplaces
Wider employment
Green Jobs
329
330
331
Summary
331
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 7: UZBEK COTTON: A NEW SPIN ON CHILD LABOUR IN THE CLOTHING INDUSTRY?
332
333
333
333
8
Consumers and Business Ethics
Introduction
340
Consumers as stakeholders
The limits of caveat emptor
341
342
Ethical issues, marketing, and the consumer
Ethical issues in marketing management
Ethical issues in marketing strategy
344
344
359
Globalization and consumers: the ethical challenges of the
global marketplace
Different Standards of consumer protection
Exporting consumerism and cultural homogenization
The role of markets in addressing poverty and development
364
365
365
367
Consumers and corporate citizenship: consumer sovereignty
and the politics of purchasing
Consumer sovereignty
Ethical consumption
368
368
369
Sustainable consumption
What is sustainable consumption?
The challenge of sustainable consumption
Steps towards sustainable consumption
374
375
375
376
Summary
381
STUDY QUESTIONS
382
RESEARCH EXERCISE
382
KEY READINGS
CASE 8: TARGETING THE POOR WITH MICROFINANCE: HYPE OR HOPE FOR
POVERTY REDUCTION?
382
383
DETAILED CONTENTS
Suppliers, Competitors, and Business Ethics
Introduction
390
Suppliers and competitors as stakeholders
Suppliers as stakeholders
Competitors as stakeholders
391
391
391
Ethical issues and suppliers
Misuse of power
The question of loyalty
Preferential treatment
Conflicts of interest
Gifts, bribes, and hospitality
Ethics in negotiation
393
394
396
397
401
401
404
Ethical issues and competitors
Problems of overly aggressive competition
'Dirty tricks'
Problems of insufficient competition
405
406
409
410
Globalization, suppliers, and competitors: the ethical
challenges of global business networks
Different ways of doing business
Impacts on indigenous businesses
Differing labour and environmental Standards
Extended chain of responsibility
411
412
415
416
417
The corporate Citizen in the business Community: ethical
sourcing and fair trade
Ethical sourcing
Ethical sourcing as business-business regulation
Strategies of business-business regulation
Fair trade
419
419
420
422
423
Sustainability and business relationships: towards
industrial ecosystems?
Sustaining the supply chain
Turning supply chains into supply loops
Industrial ecosystems
426
426
427
430
Summary
431
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 9: FAIR ENOUGH? BIG BUSINESS EMBRACES FAIR TRADE
432
433
433
434
10
Civil Society and Business Ethics
Introduction: w h a t is civil society?
440
Civil society organizations as stakeholders
443
DETAILED CONTENTS
Ethical issues and CSOs
Recognizing CSO stakes
CSOtactics
Boycotts
CSO accountability
447
447
451
457
461
Globalization and civil society organizations
Engagement with overseas CSOs
Global issues and causes
Globalization of CSOs
464
464
465
467
Corporate citizenship and civil society: charity, collaboration,
enterprise, or regulation?
Charity and Community involvement
Business-CSO collaboration
Social enterprise
Civil regulation
468
468
470
474
476
Civil society, business, and sustainability
Balancing competing interests
Fostering participation and democracy
Sustaining civil society
481
482
483
484
Summary
485
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 10: FROM CONFLICT TO COLLABORATION? GREENPEACE'S GREENFREEZE CAMPAIGN
485
486
486
486
11
Government, Regulation, and Business Ethics
Introduction
492
Government as a stakeholder
Defining govemment, laws, and regulation
Basic roles of government as a stakeholder
Government as a representative of Citizens' interests
Government as an actor (or group of actors) with interests of its own
492
492
494
495
497
Ethical issues in t h e relation b e t w e e n business
and government
Identifying the basic problems and issues: legitimacy,
accountability, and modes of influence
Lobbying
Party financing
Overlap of posts between business and government: individual
conflicts of interest
Corruption of governmental actors by business
Ethical issues in the context of privatization and deregulation
498
498
503
506
508
509
511
DETAILED CONTENTS
Globalization and business-government relations
From the national to the global context
Shifting roles for business and government in a global context
Business as an actor within the national context (Westphalian setting)
Business as an actor within the national context of authoritarian/
oppressive regimes
Business as an actor in the global context (post-Westphalian setting)
Business-government relations in international trade regimes
Corporate citizenship and regulation: business as key player
in t h e regulatory game
Governments as regulators (segment 1)
Self-regulation by business (segment 2)
Regulation involving business, governmental actors, and CSOs
(segments 3, 4, and 5)
516
516
518
519
521
522
523
523
527
527
529
Governments, business, and sustainability
Global climate change legislation and business responses: Support
versus obstruction
Achieving sustainability: securing the global supply of food
and water
531
Summary
537
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
CASE 1 1 : DISPENSING 'THE LESS ORTHODOX INDUCEMENTS'—BAE SYSTEMS
AND THE GLOBAL DEFENCE INDUSTRY
538
538
538
12
535
536
539
Conclusions and Future Perspectives
Introduction
546
The nature and scope of business ethics
546
Globalization as a context for business ethics
547
Sustainability as a goal for business ethics
547
Corporate citizenship and business ethics
548
The contribution of normative ethical theories to
business ethics
550
Influences on ethical decision-making
550
The role of m a n a g e m e n t tools in business ethics
551
The role of different stakeholder constituencies in
business ethics
552
Trade-offs and conflicts between different stakeholder groups
553
Summary
554
DETAILED CONTENTS
STUDY QUESTIONS
RESEARCH EXERCISE
KEY READINGS
555
555
556
References
Subject Index
Authors Index
Countries and Regions Index
Companies, Organizations, and Brands Index
557
583
602
608
610
LIST OF FIGURES
1.1
1.2
1.3
1.4.
1.5.
1.6.
1.7
1.8.
1.9
2.1
2.2
2.3
2.4
2.5
2.6
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
4.1.
4.2
4.3
4.4
4.5
4.6
5.1
5.2.
5.3
The relationship between ethics and the law
The relationship between morality, ethics, and ethical theory
Types of misconduct across sectors
Observed ethical misconduct across sectors
Differences in business ethics across organizational types
Examples of the ethical impacts of globalization on different
stakeholder groups
Regional differences from a business ethics perspective: the example
of Euiope, North America, and Asia
Corporate commitments to sustainability
The three components of sustainability
Carroll's four-part model of corporate social responsibility
Some early definitions of stakeholders
Stakeholder theory of the fiim
Commitments to corporate citizenship
Three views of corporate citizenship
An extended view of corporate citizenship
Consequentialist and non-consequentialist theories in business ethics
Major normative theories in business ethics
Example of a utilitarian analysis
The Golden Rule in different belief Systems
Human rights Statements by multinationals
A typical perspective on the value of ethical theory for solving ethical
dilemmas in business
A pluralistic perspective on the value of ethical theories for solving
ethical dilemmas in business
Considerations in making ethical decisions: summary of key insights
from ethical theories
Ethical decision-making process
Framework for understanding ethical decision-making
Individual influences on ethical decision-making
Stages of cognitive moral development
Situational influences on ethical decision-making
Rationalizing unethical behaviour
Business ethics management
Prevalence of issues found in codes of conduct
Unilever's Code of Business Principles
7
8
15
16
17
25
26
32
33
53
61
63
74
75
79
97
98
103
106
110
127
128
129
143
145
149
154
161
167
185
193
194
LIST OF FIGURES
5.4.
5.5.
6.1.
6.2.
6.3.
6.4.
6.5.
6.6.
7.1.
7.2.
7.3.
7.4.
8.1.
8.2.
8.3.
8.4.
8.5.
8.6.
8.7.
9.1.
9.2.
9.3.
9.4.
9.5.
9.6.
9.7.
9.8.
C9.1.
10.1.
10.2.
10.3.
10.4.
10.5.
10.6.
10.7.
10.8.
10.9.
Framework for social accounting established by the Body Shop
Organizing for business ethics management
Agency relation between the manager and shareholder
Comparison of corporate governance regimes globally
Two approaches to 'ethical' shareholding
Examples of positive and negative criteria for ethical investment
Top 10 Stocks held in SRI funds invested in companies in
emerging markets 2009
Principles of co-operation
Rhetoric and reality in HRM
Rights and duties of employees as stakeholders of the firm
Women in top management positions
Union density (percentage of union member of the total workforce)
in selected countries worldwide
UN Guidelines on consumer protection
Ethical issues, marketing, and the consumer
Price differentials in car prices across Europe
Restrictions on television advertising to children in selected
European countries
Consumer sovereignty test
Changing social ethics and consumption
From a linear to a circular flow of resources
Supplier relationship as part of an industrial network
Chartered Institute of Purchasing and Supply's Code
of Professional Ethics
Ethics in the grey areas of competitive intelligence
Bribe paying by multinational companies abroad according
to country of origin
Top ten sectors for bribe paying
The cocoa market 1994-2009: comparison of Fairtrade and
New York prices
The FAIRTRADE Mark
Kaiundborg industrial ecosystem
Salesof fair trade products in the UK
Civil Society as the 'third sector'
Diversity in CSO characteristics
Different types of CSOs
Degrees of trust in different types of Organization in selected
global regions
Some well-known boycotts
Some examples of business-CSO collaboration
Key differences between social enterprise, CSOs, and corporations
Core activities of the Ethical Trading Initiative
Number of wind-farm projects in the UK
213
220
240
242
266
268
269
278
291
293
297
312
343
345
358
361
369
375
379
393
403
407
413
414
425
425
431
435
441
442
445
446
458
471
475
480
483
LIST OF FIGURES
11.1.
11.2.
11.3.
11.4.
11.5.
11.6.
Government as a stakeholder of business
Government between business and society's interests
Business influence on government
2008 Corruption Perception Index (CPI) for selected countries
Globalization, government and business: changing context and roles
Players in the regulatory game and selected examples of private
regulatory efforts
11.7. Examples for regulatory outcomes on different levels in a
multi-actor setting
495
499
503
510
517
525
526
LIST OF BOXES
Ethics in Action
1.1.
1.2.
2.1.
2.2.
3.1.
3.2.
4.1.
4.2.
5.1.
5.2.
6.1.
6.2.
7.1.
7.2.
8.1.
8.2.
9.1.
9.2.
10.1.
10.2.
11.1.
11.2.
Ethical sex?
Counterfeits—knock-offs n o bargain
Satyam fraud—responsibility issues in India
Private, but public
India's special economic zones—an ethics black hole
Standards: ISO Steps towards social responsibility
Rogue trader, latest edition
The Stanford prison experiment
Partnerships—working better together
The Global Reporting Initiative
Islamic finance—London banks on sharia law
Norway's oil fund—can divestment make a difference?
Black empowerment—slaying South Africa's sacred cow
Workplace equality—putting harassment on notice
Diageo—marketing to remember
A take-off for responsible travel? Responsible travel.com targets
a growing niche of 'ethical tourists'
Factory closures—breaking up is hard to do
Cadbury invests in flaking supply chain
NGO campaigns—campaigners scrutinized but unrepentant
Social innovation: good for you, good for me
Private military—new rules of engagement
The UN Global Compact: talking about global regulation
10
22
58
80
114
124
162
174
208
218
264
274
300
324
348
3 72
398
428
452
478
514
532
Ethical Dilemma
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
No such thing as a free drink?
When good results are bad results?
Producing toys—child's play?
Stuck in the middle?
Clear codes for grey zones?
Who cares whose shares?
Off your face on Facebook?
A fitting approach to shoe selling?
A beautiful deal?
Where's the beef?
Always good to have friends in politics?
6
72
99
146
198
254
308
352
395
450
500
LIST OF BOXES
Ethics on Screen
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Blood Diamond
The Corporation
It's a Free World...
Michael Clayton
Wal-Mart: The High Cost of Low Price
Wall Street
Picrure Me
Orgasm Ine
Black Gold
Battle in Seattle
The Constant Gardener
12
50
130
168
204
246
292
356
418
456
520
Ethics Online
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Ethical fashion for ethics girls
The conspieuous rise of the political side of the corporation
The world of business ethics blogs
Ethics pledges
Stakeholder communication through corporate CSR blogs
Keeping up with the world of SRI
Diversity about diversity on the web
Tracking sustainable consumption
Practical resources for managing supply chain ethics
Campaigns 2.0
Holding business and governments accountable
14
83
95
158
190
271
295
377
421
459
502