Wednesday, 12 January 2011

Application of Natural Law to Business Ethics

Natural Law (NL) and Business Ethics (BE)
NL provides a stakeholder theory which can be applied to BE. This means that the purpose of a business is to satisfy all its stakeholders not just shareholders. In this post we will explore four branches within BE: the relationships between employees and employer; business and consumers; business and the environment; and business and globalisation. In addition, the strengths and weaknesses will be explored as well. When applying NL to BE there are two main sources of guidance we look to the 10 commandments (remember this is a Catholic teaching) and the formation of rules through primary precepts.
Employees and Employers
The Decalogue provides some good advice to how the relationship between employees and employers should be. Business must shut on Sunday as this is the day of Sabbath and the fourth commandment says ‘thou must remember Sabbath day, keep it holy’. Employers are expected not to behave rivalrous towards other firms in the industry as  the tenth commandment suggest ‘Thou must not covet thy neighbor’.  This implies that employers should treat employees with respect and value and not exploit them or their wages in order to compete with other firms. Employees, however, are also expected to behave in a certain way too for example they are expected not to steal (8th commandment). Furthermore, they are expected to whistle-blow if they see any practice which is moral and for this they should be rewarded. This belief stems from the commandment ‘thou must not bear false witness’ (9th commandment). 
The primary precepts also provide some guidance as to how the relationship between employers and employees should be. The precept of life, education and most interestingly reproduction apply here. For example the precept of life determines that we should be kind and respectful to one another, the precept of education encourages employers to train and educate employees and the precept of reproduction implies that maternity and paternity leave should be given and employees should be respected for taking a leave not looked down upon.
Business and Consumer
Similarly, we can draw conclusions from Natural Law when exploring the relationship between business and consumers. Like employees consumers are expected not to steal or bear false witness. Businesses are also expected to charge a fair price for their goods and services because if the price is to high some people may interpret this as being stealing. Furthermore, consumers need to have all the information because this can also be seen as a form of deception. 
Business and the Environment
Given that one of the primary precepts is worshipping God, we can induce that businesses should act as stewards and not exploit the environment as this is one way of worshipping God. Where possible green policies should be implanted e.g. use of solar panels.
Business and globalisation
This branch of BE looks at the utilization of cheap labour abroad in places like India and China. NL promotes the care and protection of the vulnerable hence workers in these countries should be cared and protected for. Furthermore as we saw in the employees and employers sections workers need to be given a fair wage and good working conditions.
  • Supports laws that already exist e.g. informing the consumer
  • Supports Havard University’s stakeholder theory
  • Promotes fairness and equality
  • Has some great implications for the future
  • Is it realistic? 
  • The idea of firms not being rivalrous and competing has some problems e.g. in economics we see this can lead to adverse affects for the consumers
  • You can’t satisfy employees with good pay, working conditions etc and consumers with low prices - they clash.
  • What if you are not christian?

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