Crane & Matten, Business ethics, 4th Edition, Chapter 1

Suggested answers to the Think Theory exercises

THINK THEORY 1
A good definition is an important starting point for any theory. The one we have given for
business ethics is mainly a definition of business ethics as an academic subject. If you
were trying to define an organizations business ethics, what definition would you use? Try
writing it in the form, An organizations business ethics are . . .

Simply turning the academic definition of business ethics on its head renders the
following:
An organizations business ethics is its practice of addressing issues of right and wrong in
business situations, activities, and decisions.

An alternative definition:
An organizations business ethics is the way individual employees, and the company as a
whole, engage in practice with issues of right and wrong in both everyday situations and
decision-making.

THINK THEORY 2

If, as we have argued, business ethics is not an oxymoron, then is it necessarily true of
any business, regardless of the industry it is in? Think about the reasons for and against
regarding sex shops such as Other Nature or Good for Her as ethical organizations.
Would the same arguments hold for an ethical land mine manufacturer, or an ethical
animal testing laboratory?

Some reasons for these (or some of these) companies being ethical organizations include:
An organization can be seen to be ethical if its products are produced in an ethical
manner, regardless of the nature of the product.
Helping to promote safe sex practices with women around the world.
These companies are responding to poorly served segments of the market,
including women and the LGBT community.
Trying to change the image of erotica products as something that all men and
women can enjoy, that these products are not just the tools of the seedy underbelly
of the sex industry sex is something that can be healthy and positive for all.
Some of the companies engage in educational and philanthropic programs related
to sex and the sex-shop industry.

Some reasons for these (or some of these) companies being unethical:
Many of these products are too expensive to be enjoyed by the average individual.
This might suggest that ethical sex is only available to the wealthy.

Andrew Crane and Dirk Matten 2016. All rights reserved.

 Crane & Matten, Business ethics, 4th Edition, Chapter 1

Some of the products for sale are designed to be used in practices that some would
regard as immoral, such as bondage, anal sex, sadomasochism, and other
fetishes.
The language and imagery on the websites and in the stores may be regarded as
offensive.
Models on the company websites are often women in a state of undress, and
frequently in bondage. This may be seen as exploitative and/or shameful from
some perspectives. It also arguably contradicts some of their statements about love
and equality, given that the sites often do not feature men in the same way.

If the argument is always based on whether the company produces products ethically, and
that there is an ethical justification for their products within a particular context or time,
then there may be grounds for considering land mine producers or animal testing
laboratories to be ethical. Arguments along these lines might include:
The production of land mines is not unethical if it is done in a time of war, and the
products are used against tanks etc. (e.g. no anti-personnel mines) to protect the
citizens of a nation against an aggressor.
With the animal testing laboratory, actions could be argued to be ethically justifiable
if a) every possible action is taken to reduce the pain and suffering, and to improve
the quality of life of the animals, and b) they are being used for tests critical to their
own species or to humanity (as some would argue humans are more important and
therefore justify the death of animals).

THINK THEORY 3
Capital punishment and topless sunbathing are interesting issues to think about
globalization theory and cultural dimensions of ethics, but have little to do with business
responsibility as such. Can you think of some similar examples that a business might have
to deal with?

There are cultural differences almost everywhere that businesses may have to deal with.
Food provides one set of potential stumbling blocks that can greatly affect the business:
global restaurant chains may face culturally-specific issues in different markets due to
religious custom (such as selling pork in Muslim or Jewish areas, using beef fat for French
fries in Hindu areas). Another example with potentially-significant consequences is in
simple non-verbal communication. A nod of the head usually means yes, and a shake, no;
but in Bulgaria this is apparently reversed, with a shake of the head indicating yes and a
nod, no.

THINK THEORY 4

Looking at different east Asian countries what are common themes in responsible
business practices? Also, reflect also on the differences between these countries?
Discuss potential reasons for both the commonalities and differences.

Andrew Crane and Dirk Matten 2016. All rights reserved.

 Crane & Matten, Business ethics, 4th Edition, Chapter 1

Common Themes:
Relatively New Interest in Corporate Responsibility Issues: while the piece reminds
us that some of these firms have been interested in responsibility issues for a long time,
the general trend has been for East Asian business communities to be increasingly
devoted to these issues. This is partially due to a diffusion of business practices as a
result of globalized businesses, and partially due to changing social expectations.
Responses to Social Pressure: most of these responsibility practices can be seen
as responses to social concerns over firms legitimacy, or the extent to which business
operations benefit wider society. Whether it be to respond directly to an angry stakeholder,
as in the case of Angkor Gold, or a response designed to help the generally
disadvantaged, as in the case of Pegadaian, responsible practices can help firms show
they benefit others.
Business-Led: Interestingly, many of these practices are led and organized by
business groups, such as the Malaysian stock exchange and the Vietnamese Chamber of
Commerce. These business groups seem to see some real benefit either ethical or
strategic to responsible business, and are taking a leadership position to see it happen.

Some Differences:
Philanthropy and Social Investments Should be Tailored to Local Context: each
firm is speaking to different audiences. The Singaporean business community is speaking
to the Singaporean middle class, and is demonstrating their public spiritedness through
sponsoring regattas and the harbour front. Pegadaian is speaking to critics of their
supposedly exploitative business model, by providing health services to the
disadvantaged. Pertamina is reimbursing those affected by their operations. None of these
three practices can be transferred to the other contexts in fact, it would be very awkward
and counterproductive to try to do so.
Responsible Practices Should be Tailored to the Industry in Question: each firm is
trying to allay specific concerns. It is not surprising that Pertamina and Angkor Gold, a pair
of extractive firms, are the most concerned about targeted individuals, nor that their efforts
are so philanthropic. These firms are trying to convince specific people that the firms are
on net a positive force for them. Meanwhile, financial services firms in both Singapore and
Vietnam are making investments that serve many people they are hoping to polish a
general sense that they are good corporate citizens.

Some Similarities:
International Firms as First Movers: we can see across countries that some
transnational firms, who have already-established organizational understandings of what
constitutes responsibility, are likely to enact responsible practices no matter the local
standard.
Still Relatively Early-Stage: notwithstanding the exciting movement forward on
responsibility issues as seen here, these responsibility practices are still relatively early
stage. They are still quite philanthropic, still quite reactive to external pressure, and are
not (at least as far as we can see) being brought into the core value chain, nor are they
being used to help reorient the company in a new strategic position. We will have to see if
the East Asian responsibility movement follows the Western tendency in this direction.

Andrew Crane and Dirk Matten 2016. All rights reserved.

 Crane & Matten, Business ethics, 4th Edition, Chapter 1

THINK THEORY 5
Think about inequality in terms of the definition for sustainability provided above. To what
extent do you think inequality is relevant for the maintenance of social, economic or
environmental systems?

There are numerous possible answers. Here are just some examples:

Inequality can threaten social systems:

o Corrodes sense of common purpose and that progress benefits everyone.
o Can threaten state cohesion and the effective delivery of state programs.
o Violates sense of social justice and then the sense that we should all obey
social rules.
o Do our political systems need more, or less, corporate influence?

Can threaten economic systems:

o Is the economy strong if it only delivers gains for the elite?
o Can an economy thrive if the majority loses hope in future prosperity?

Can threaten environmental systems:

o Without broadly distributed welfare gains, it may be impossible to ask the
lower and middle classes to restrain consumption (eg. regarding carbon).
o In the face of economic suffering, who are we to demand that people stop
degrading the environment? Raising the standard of living for the base of
the pyramid could help authorities limit problematic economic activities such
as poaching and small-scale mining (which is very damaging to local water
quality).

Andrew Crane and Dirk Matten 2016. All rights reserved.