Business Ethics Slide

Costs and Benefits of Ethics

Lecturer: Mr. John Andre
Student: Nguyen Thi Kieu Anh – Snow
ID number: F05-014
Class: F05A


CONTENTS

1

Different ethical
perspectives

2

Business objectives
from ethical perspective


Theoretical ethical approaches

Western modernist ethical theories

Consequentialist ethics

Egoism

Utilitarianism

Non-consequentialist ethics

Ethics of duties

Rights and justice

(Crane & Matten, 2010


Theoretical ethical approaches
Utilitarianism
- John Stuart Mill (1806 – 1873) – a British philosopher
- Based on the consequences of action
- Do the most good for the most people

Categorical Imperative
- Immanuel Kant (1724 – 1804) – a German philosopher
- Right is right, wrong is wrong, no matter what
consequences are
(Crane & Matten, 2010)


Compare and Contrast
Absolute ethics

Relative ethics

Similarities The standard to determine rightness and wrongness of action
Rules

are

consistent

universal.

and Judgment of right or wrong depends
on different situation.

Differences A situation is always right or Nothing is inherently right or wrong,
always wrong, whatever results ethics is just to give some advantages
or reasons.

(social, economic,…)

Objective sense

Subjective sense


Example

Kill 1 patient to save the other 5 patients who are waiting for life-saving transplants. If not,
all 6 patients will die.

- Absolute ethics: Killing is always wrong, whatever the
circumstances (everyone has right to live).
- Relative ethics: Kill 1 patient to save 5 is the best choices
for this situation (do the most good for the most people).

Development of theoretical ethical approaches

• Virtue ethics: Moral characters
Ex: Telling the truth or doing the good deed and
not

for any reward

• Feminist ethics: Care for others and relationship
Ex: Share some food or little money for beggar


Business ethics of Vedan Vietnam
VEDAN PROFILE
• Vedan Vietnam is a MSG (monosodium
glutamate) plant
•

Established in 1991

•

Located in Dong Nai Province

ETHICAL ISSUES

Vedan factory

Vedan Vietnam has polluted the Thi Vai River

•

Vedan dumped nearly 110,000cu.m
of untreated wastewater every
months

•

Contributed 82.9% to the pollution
of Thi Vai River

The head of Vedan

(Tuan, 201


Impacts and reasons of ethical issue
ENVIRONMENT

IMPACT
COMMUNITY

REASON
Cutting down the cost of waste-processing
•

Complicated stages

•

Specialized techniques

•

High cost

Thi Vai River


Impacts on operational activities of Vedan Vietnam
1. Reaction from external stakeholders
Resident
(Complaint letter)

•
•

Government
Suspending Vedan’s license
Imposing administrative penalty

2. Financial damages
- Pay fine: VND267.5 million (current US$15,030)
-

Environmental fee: VND127 billion (current $7.14 million)

-

Compensation for farmer: VND569 billion ($31.970 million)

-

The cost of restoring Thi Vai River

-

Decline the revenue


Impacts on objectives of Vedan Vietnam
OBJECTIVES
“As a foreign-invested company in Vietnam, apart from business
objectives, Vedan Vietnam pursues the purpose of making a positive
contribution to socioeconomic development of Vietnam” (An, 2013)

Objective  Unattainable


Implication for Vedan and its stakeholders

Customers
DECISION
Cutting down the cost of waste-processing
 Reduce cost of products
 Gain more profit to satisfy shareholders
IMPACT ON STAKEHOLDER
- Shareholder
- Community
- Government

LESSON
- Changes wrong perspectives
- Realizing the link between running

Shareholders


Lesson for business
GOOD ETHICS IS GOOD BUSINESS
NO ETHICS , NO BUSINESS
ETHICAL BUSINESS IS PROFITABLE
ETHICAL BUSINESS GENERATES GOODWILL
UNETHICAL BUSINESS LEADS TO EXPLOITATION OF
CONSUMERS AND SOCIETY AT LARGE

(Rupani, 2014)


References
An, A., 2013. Vedan Vietnam: Integrating Business Activity with Social Contribution.
[Online] Available at: />[Accessed 23 March 2014].
Crane & Matten, 2010. Business Ethics. 3rd ed. Oxford: Oxford University Press Inc.,
New York.
Rupani, A., 2014. Business Ethics. [Online] Available at:
[Accessed 20 March 2014].
Tuan, L.T., 2011. CSR Lessons from Vedan Deeds. [Online] Available at:
www.macrothink.org/journal/index.php/ber/./1604 [Accessed 11 March 2014].
Vedan, n.d. Vedan (Vietnam). [Online] Available at:
[Accessed 11 March 2014].