Applied Business Ethics

Foundations for Study and Daily Practice

Mathias Schüz

• Publisher: WSPC
• Year: 2019
• ISBN:
  9789813279186
• Topic: Economics
• Subtopic: Microeconomics
• Index: Economics

What has ethics got to do with my job? How can I take on ethical responsibility and help to make my company more successful at the same time? Although 'ethical responsibility' has become something of a catchphrase these days, most people only have a vague idea what it means and how it can be demonstrated in actual practice.

Disasters like the Volkswagen's emission scandal, the oil spill in the Gulf of Mexico, the nuclear meltdown of Fukushima, the global financial crisis, and countless lesser-known cases of damage to human beings and the environment are the result of unethically irresponsible business practices. Efforts to maximize profits frequently lead to reckless behavior, as those in charge focus on short-term benefits and ignore social and environmental risks. Their actions have negative consequences, not only for the victims but, in many cases, for the perpetrators themselves too. Aggrieved interest groups or disadvantaged stakeholders may react with strikes, public protests, or boycotts, jeopardizing their reputation and profitability.

This textbook, Applied Business Ethics, is the result of many years of research work and lecturing, and is an attempt to present the most important principles and the latest approaches in business ethics to students, teachers, and business practitioners alike, and help them to make business decisions that everyone concerned will benefit from, rather than just a few fortunate stakeholders.

The author illustrates his theoretical subject matter with practical examples of real-life situations and provides numerous exercises to help the reader grasp complex issues, moral dilemmas, and business risks better. In clear, accessible, and easily understandable terms, he demonstrates how ways of finding satisfactory solutions can be found in a systematic way thanks to interdisciplinary research and philosophical reflection.

Contents:

• Responsibility in Companies:
  • The Growing Need for Responsibility and Ethics
  • A Holistic Model of Corporate Responsibility
• Traditional Ethics in Companies:
  • Ethics:A Way of Regulating Social Processes
  • Utility Ethics: How We Judge the Consequences of People's Actions
  • Duty Ethics: What We Need to Respect
  • Virtue Ethics: What Makes Ethical Behaviour Possible
  • Synopsis: Traditional Ethics in Practice
  • Application in Strategic Management and Use of the SCR Checklist
• Recent Ethical Approaches to Business:
  • Intergenerational Ethics: Considering Future Generations
  • Biocentric Ethics: Reverence for Life
  • Deep Ethics: Getting Along with Evil
• Outlook: Conclusions About Responsible Leadership:
  • The Essence of Responsible Leadership

Readership: Students, academics and practitioners in business ethics.Ethics;Business Ethics;Corporate Responsibility;Ethics of Utility;Duty Ethics;Virtue Ethics;Strategic Management;Intergenerational Ethics;Biocentric Ethics;Deep Ethics;Responsible Leadership0 Key Features:

• Despite having a strong practical focus, this textbook also amply demonstrates the theoretical and philosophical reasoning that underlies ethics. Without theory, the actual cases it outlines would simply be arbitrary, and a work on theory that doesn't contain any practical applications of it would equally be of limited use
• This textbook is the result of many years of research work and lecturing, and is a way of ensuring that the author's outstanding knowledge of teaching about and explaining ethical behavior in a business context remains accessible to a broad audience, linking new insights with established knowledge

Foreword 1

by Prof. Ing. Ivan Novy

Mathias Schüz has developed and tested the contents of his textbook, not only in his own lectures, but also in seminars over a period of more than 10 years at universities before he published them in the German language with Pearson. Beforehand, he had almost 20 years of experience in dealing with ethical issues in business practices.

Thanks to many years of cooperation between our Faculty of Business Administration at the University of Economics, Prague (VŠE), the largest business university in Czech Republic, and the School of Management and Law at the Zurich University of Applied Sciences (ZHAW), the largest university of applied sciences in Switzerland, we have been able to anchor the foundations of his approach also in our teaching. From then on, they have become the foundation of numerous lectures and seminars at both universities dealing with ethical responsibility.

Both universities had already begun to integrate “ethics in entrepreneurial practice” as an object of research and teaching, even before they officially committed themselves to the UN Initiative Principles of Responsible Management Education (PRME). Not least for this reason, they met the strict requirements of the accreditation bodies of the Association to Advance Collegiate Schools of Business (AACSB) and the European Quality Improvement System (EQUIS).

In a joint conference held in Prague in September 2015, Professor Schüz presented large parts of his textbook in Czech. The aim of this conference was to uncover why and how to integrate ethics in management education. The audience members, who were made up of individuals from the industry and academia, discussed especially his comprehensive model of ethical corporate responsibility with great enthusiasm.

The most important learning outcome for the participants was that economic action is not a contradiction to ethics. On the contrary, it is based on fair exchange, which is in the middle of the spectrum between robbery and charity. It is therefore a special case of ethics whose golden rule makes it clear that you should not take more than you give, if you do not want to be cheated yourself.

As simple as this message is, so little it is in the consciousness of most players in business life. They learn to maximize their profit without reflecting on how it was obtained: whether from a robbery or from a fair exchange. Of course, the next question is how one can ensure a fair exchange along the entire value chain. This textbook provides the answers to this question in abundance.

One of them is Schüz’s clock model. It has the advantage of showing, at a glance, the different dimensions, scopes, and sustainability levels of responsibility in companies. It sensitizes managers as corporate leaders to the frequently ignored impacts of their choices on society and nature. Used in advance, it could prevent corporate scandals, as they occur again and again.

With this publication, the English-speaking audience can now familiarize themselves with Schüz’s holistic model of ethical corporate responsibility, his easy-to-understand philosophical explanations of various approaches to ethics, and his didactically well-thought-out explanations and numerous practical examples.

I would like to wish the readers a lot of motivation, as they implement the concepts of applied business ethics in theory and practice.

Prof. Ing. Ivan Novy

Dean of Faculty of Business Administration,
University of Economics, Prague (VŠE)

Foreword 2

by Prof. Dr. habil. Gerald Steiner

In this book, Applied Business Ethics, Mathias Schüz is applauded for not taking the role of a ‘business ethics evangelist’. These days, too many of them appear to be around, often with one-sided and inconsistent messages. Instead, Schüz provides the reader with the opportunity to find her/his own orientation and to connect to their own backgrounds, experiences, disciplines, and mental models. He does so by offering a great overview of theories, schools of thought, useful methods, and applications. By connecting these considerations with real-life situations and using a toolbox of useful concepts and methods, the reader discovers how integrity, fairness, responsibility, reflectiveness, and appreciation can become strong forces within management practice, decision-making, and future orientations, which go far beyond a pure normative orientation, and are not outdated but highly relevant for survival, success, and sustainability. Schüz and the publisher’s layout meet in a symbiotic manner that leads to a substantial didactical contribution in business ethics and ethical leadership. This is based, beyond others, on: carefully chosen and highly relevant business cases, which help to deepen the reader’s understanding; page columns of key words that are guiding the whole book and give a wonderful orientation; in addition to the book’s clear structure which includes boxes of aims, and lessons learned/summaries — a composition of texts which are easy to read.

But what is the secret behind this masterpiece of ethical leadership and ethical education? One explanation is definitely related to the author’s background. Schüz is a real ‘transdisciplinary personality’, with great experience in practice (particularly based on his leadership positions in the industry) and science (as scholar in philosophy, physics, pedagogics, management, and ethics studies), which is bridged by an extensive teaching experience. Schüz is not someone who is talking about an academic field from the distance; quite the opposite, he has his feet deeply in both dimensions. Hence, practitioners as well as students and academics will find essential lessons to be learned and will be picked up carefully by a master of mutual learning processes between science/theory and society/practice. Most recently, Schüz has lately also been providing advice and assistance in the context of intensified joint cooperation with the faculty members of the Faculty of Business and Globalization here at Danube University Krems — a process and joint endeavor with great future perspectives.

With his great intellect, honest compassion for people and nature, and elegant writing, Schüz provides an outstanding guidance for newcomers and experts to business ethics. At the Faculty of Business and Globalization of Danube University Krems — one of Europe’s forerunners in post-graduate and continuing education — we decided to use this book for our MBA program based on the book’s unparalleled clearness, comprehensiveness, depth, and practice relevance, even without having met Schüz at the time. As a University with a clear and explicit transdisciplinary orientation and known for our focus on our societal responsibility, ethical considerations are also crucial from a scientific and practical perspective. With the newly available English version, we will now integrate this book also in our international programs. With his seminal work, Schüz not only offers a great basis to be applied in business ethics, ethical leadership, and corporate responsibility courses, but because of its holistic perspective also within study programs related to sustainable development, resilience, and general management.

Prof. Dr. habil. Gerald Steiner

Full Professor of Organizational Communication and Innovation,

Dean of Faculty of Business and Globalization,

Chair of Department for Knowledge and Communication Management,

Danube University Krems (Austria)

Preface

During my career in business, I personally witnessed the rise and fall of a major company I worked with for 16 years. In fact, I observed this near-collapse close to its very epicentre. As a close colleague and friend of the owner, I experienced how decisions were influenced by light and shade at all levels of management. These can best be described in terms of “virtues” such as integrity, justice and consideration, and “vices” such as greed, envy and unscrupulousness. The potential for exhibiting such types of behavior is embodied in every human being and gets triggered in different ways, depending on the situation. This innate pattern has an effect on corporate culture, and corporate culture has an influence on employees’ conduct. This is why poor decisions get made that cause huge amounts of money to be lost and which may eventually force business owners to sell their company—with unforeseen consequences for the members of its workforce and thus their families.

This course of affairs keeps on happening again and again in a similar way all over the world. It is representative of many other examples of the decline of once very successful large companies. This leads us to some questions of fundamental—indeed, existential—importance. Is running a successful business essentially the same as an egoistic leader exploiting the power in his (or her) hands? Or conversely, could the real basis of successful business management be the ability to tame one’s own negative energy in a responsible manner? What is the level of responsibility necessary to make business decisions properly—and who will benefit from it or suffer as a result?

The question of what behavior is right or morally justified is even more fundamental. What exactly do we mean by ‘good’ and ‘bad’? Why should I behave in a ‘good’ way in the first place? As a young man, one of the things I discussed with my friends was whether being a powerful tyrant or a ruthless CEO who can afford whatever he likes would be preferable to leading a simple but insignificant life. A tyrant would be able to enjoy much more of what life has to offer than someone much further down the ladder, even though they might have a shorter life as a result. I found it easy to answer this question at the time, as I only had to think of the countless people who would suffer as a result of the tyrant’s selfish behavior—I was quick to feel a sense of solidarity with them in their plight.

My academic pursuit of physics and philosophy at the university brought up these old questions once again a few years later. Friedrich Nietzsche’s radical questioning of established morals and his tracing them back to the ‘will to power’ (Wille zur Macht) challenged me to look for new answers this time. In my doctoral thesis, I investigated the philosophical consequences of quantum physics in the works of Carl Friedrich von Weizsaecker, the German physicist and philosopher. One fundamental insight I gained from this was that particles of matter do not exist in isolation, but are actually part of a whole; they all have an effect on each other, and they resonate mutually. Hence, the world in all its diversity is a single entity, the origins of which go back to the Big Bang, according to contemporary theory.

At the same time, however, everything is in the process of evolving and changing. Scholarly opinion today has it that the universe has been expanding and life developing in it ever since the Big Bang occurred. For many people, this oneness is primarily apparent in their ‘will to live’ (Wille zum Leben), to put it in Arthur Schopenhauer’s words. Nietzsche’s ‘will to power’ would be a secondary quality, then, as life is both interaction and a constant, ongoing attempt to fathom the ideal states of energy, which are governed by forces of attraction and repulsion. In human life, which is rather more complex than that, our driving force is the desire for material wealth and happiness and the avoidance of evil and unhappiness. This also means there is a constant struggle for scant resources, each allocation of them automatically provoking a counter-reaction elsewhere.

Is this conflict the only way in which life reveals itself, though? Apparently not, as it can also be seen in sympathy, cooperation, solidarity, and caring. As recent research has shown, not only do humans and highly developed animals behave this way, but even plants do. ‘How should I deal with this contradiction in life as a human being?’, you might ask, ‘Particularly during the parts of my life that I spend at work, employed by an organization?’ This discrepancy is particularly obvious in companies: on one hand, they strive for profit and try to safeguard their own future rather than their competitors’, while on the other, they constantly try to build up and maintain good relationships with their customers, suppliers, financial backers, and even local authorities—with all the stakeholders involved, in fact.

The aim of this textbook is to show how company managers can consciously reflect on their own behavior in terms of whether it is ‘good’ or ‘bad’ and then tailor it accordingly in a responsible, sustainable way. Apart from possessing the ability to interact with others in a perceptive and understanding manner, one of the key qualities responsible leaders should possess is the ability to harness the negative forces that coexist in their own minds and which are capable of destroying people’s lives. A person who is unable to manage his own life and tame his own mind in this respect is certainly not in a position to lead anyone else; he would only ‘mislead’ them, as it were, i.e., deliberately lead them astray, guiding them along paths merely serving his (or her) own egoistic goals.

This book is the result of years of research and teaching on how to promote and justify ethical behavior in business. What counts here is the ‘connection rationality’ (Anschlussrationalität) described by German sociologist Niklas Luhmann. This links new insights with established knowledge. As I have found repeatedly in more than 25 years of teaching managers and students of business administration, these listeners like to hear and see things that relate to their own situation and way of thinking. Understandably, they tend to reject any moral finger-pointing in their own direction. Why? Because most people find that condemning their effort to make a profit is an attack on their own bid for survival—a primeval driving factor in every form of life on our planet. Thus, that is certainly not the best way to draw their attention to ethical issues. This is much more likely to be achieved through sensitization and practical relevance. I will have succeeded in gaining their attention if this book helps them grasp just how important ethical behavior is to the economic success of their own work. By using examples of real-life situations, I aim to demonstrate which risks can arise if they make decisions without due ethical reflection.

Despite having a strong practical focus, this textbook also amply demonstrates the theoretical and philosophical reasoning that underlies ethics. Without theory, the actual cases it outlines would simply be arbitrary, and a work of theory that doesn’t contain any practical applications of it would equally be of limited use.

I have many people to thank for being able to write this book. In particular, I would like to express my sincere gratitude to C...