Page 224 - (DK) The Business Book

222
IN CONTEXT
FOCUS
Business ethics
BEFORE
1265 Italian philosopher and
theologian Thomas Aquinas
states: “no man should sell
a thing to another man for
more than it is worth.”
1807 The UK and US outlaw
the Atlantic slave trade.
1948 The United Nations
(UN) adopts the Universal
Declaration of Human Rights.
1970 US economist Milton
Friedman claims: “the social
responsibility of business
is to increase its profits.”
1970s The term “business
ethics” comes into common
use in the US.
2011 The UN Human Rights
Council endorses Guiding
Principles for Business and
Human Rights, which sets
global standards for human
rights and business activity. See also: Play by the rules 120–23
ALWAYS DO WHAT IS RIGHT.
IT WILL GRATIFY HALF OF
MANKIND AND ASTONISH
THE OTHER
MORALITY IN BUSINESS
he US author Mark Twain temptations. In the 1980s, for
said we should “always do example, the price of Guinness
T what is right,” but this has shares was inflated to assist the
not always been the case in company’s takeover bid for Distillers,
business. High-profile scandals a leading Scotch whisky company.
such as Enron and Lehman Brothers Businesses worldwide are under
in the 2000s have led to a collapse greater scrutiny to be ethical in
of public trust in companies. their practices. In 2011–13 several
Individuals are often tempted to multinational companies came
use immoral means to further their under fire for shifting profits between
aims. J. D. Rockefeller controlled the countries, thereby avoiding large tax
US oil industry in the 19th century liabilities. Though not illegal, many
because of underhanded methods regard it as immoral, and consumer
to put competitors out of business. perception can affect profit. ■
Today, some corporate companies
are, in essence, a collection of
individuals who want their company
to get ahead of the competition, but
are also alert to opportunities for
personal gain. They may even go
as far as illegal phone hacking or
price collusion. For example, in 2013
Dow Chemicals was ordered to pay
$1.2 billion for price-fixing.
Executives may be tempted to
break the law because of pressure
In 2013, several oil companies came
from shareholders for results or for
under investigation by the EU antitrust
performance-related bonuses. Gains authority for preventing other companies
from share prices and the value of from entering the price assessment
the business overall pose additional process, thereby distorting oil prices.
■ Profit before perks 124–25 ■ Collusion 223 ■
Creating an ethical culture 224–27