Theories of Ethics Business Law

Product safety issues are the subject of significant debate among economists, lawyers and public policy experts. Business ethicists have paid little attention to these issues (cf. Brenkert 1981). Existing treatments often combine discussions about safety with discussions about liability – the question of who should pay for damage caused by products – and are usually found in business ethics manuals. One of the most careful treatments is that of Velasquez (2012). It distinguishes three (compatible) points of view: (1) the “contractual point of view”, according to which the manufacturer`s obligation is only to disclose precisely all the risks associated with the product; (2) due diligence, according to which the manufacturer must exercise due diligence to avoid harm to purchasers by the product; and (3) the “Social Costs View,” which states that the manufacturer should pay for all injuries caused by the product, even if the manufacturer has accurately disclosed all risks associated with the product and has taken the necessary precautions to prevent injuries (see also Boatright & Smith 2017). In the U.S. and elsewhere, the law has shifted toward considering social costs, where it is known as “no-fault liability.” Consumer safety is an important factor in examining ethical theories in business. These include product safety and liability, advertising practices, and sales or pricing tactics. Unethical business practices can cause serious harm to consumers. For example, counterfeit medicines that are not tested for quality are not only unethical, but also pose a serious threat to public safety. Most contemporary scholars believe that sellers have great, but not unlimited, discretion about how much they charge for goods and services. But there is an older tradition in business ethics, found in Thomas Aquinas and other medieval scholars, that there is a price sellers should charge: the “right price.” There is some debate about what exactly medieval scholars meant by “fair price.” According to a historically common interpretation, the fair price is determined by the seller`s cost of production, that is, the price that compensates the seller for the value of his work and expenses.

More recent interpretations include the medieval fair price closer to the market price, which may be more or less than the cost of production (Koehn & Wilbratte 2012). In the literature on business ethics, French is a pioneering thinker on this subject. In his early work (1979, 1984), he argued that corporations are morally responsible for what they do and should indeed be considered “full-fledged” legal persons. He bases this conclusion on his assertion that companies have internal decision-making structures through which they cause events and act consciously. Some of the early reactions to the work of French accepted the claim that companies are moral actors, but denied that they are legal persons. Donaldson (1982) argues that firms cannot be people because they lack important human skills, such as the ability to pursue their own happiness (see also Werhane, 1985). Other responses went further, denying that corporations are moral actors. Velasquez (1983, 2003) argues that while corporations can act, they cannot be held responsible for their actions because those acts are caused by the actions of their members. In subsequent work, Français (1995) withdrew his assertion that corporations are legal persons, but not his assertion that they are moral actors. Some companies “do business” for profit, others do not.

Examples include Pfizer and Target; Rutgers University and the Metropolitan Museum of Art are examples. An organization identified as a “business” is generally understood as a profit-seeking organization, and for-profit organizations are those that business ethicists focus on. However, many of the ethical issues described below also arise for non-profit organizations and individual economic actors. This contrasted with the notion of ethical business practices, which assume that organizations must conduct their activities morally with respect for justice, workers` freedom and human dignity (Ciulla, 2004). Justice and fair practices involve a relationship between workers and employers, and workers and workers, which is undeniable in the theory of justice. A number of issues relate to refusal to sell. Usually, companies want to sell their goods and services to everyone. But not always. In 2012, Jack Phillips of Masterpiece Cakeshop refused to sell a wedding cake to a same-sex couple because he opposed same-sex marriage on religious grounds. In response, the couple filed a complaint with the Colorado Civil Rights Commission. Should Phillips have sold the wedding cake to the couple? We could say that a business transaction is some kind of association, and people — including business owners like Phillips — should be free to communicate with anyone.