Business Ethics

Ethical and cultural relativism have been defined as differences in opinion among people from different cultures as a result of their belonging to such cultures (Shomali). Put differently, as a result of growing up in different cultural environments, people acquire certain sets of beliefs which are distinct from those of persons who grew up in other cultures. The end result is that both groups of persons have different beliefs about what is right or wrong as a result of the cultural conditioning that they have undergone. Proponents of the cultural relativism school of thought have argued that as a result of these differences in cultures which essentially give rise to different moral codes, there is no universal morality (Shomali). They contend that morality, just like culture is very relative. In other words, what is moral and acceptable in one community may be completely immoral and even abominable in another community. The proponents further contend that as a result of there being no universal morality, individuals should not be quick to term the actions or inaction of others as immoral when they do not agree with them (Shomali). Rather, they advance the argument that we should abide by the postulates of the cultural relativism school of thought and accept that such persons’ actions or inaction are perfectly fine or moral, it is only our difference in culture that makes us see their actions in a different light.

However, this submission contends that while there is no universal morality, every human being is created with an innate sense of right or wrong. It is this innate sense of right or wrong that should then guide our morality. In any case, culture is highly dynamic and what may be immoral today may not necessarily be immoral tomorrow. Indeed, critics of the cultural relativism school of thought have advanced the argument that the underlying issues in various cultures are the same; it is only the means to the end which differ. For example, both the Greeks and the Callatians believe in the respect of the dead (Shomali). Put differently, both the Greeks and the Callatians have a similar underlying set of beliefs regarding the dead. Indeed, both communities believe that the dead should be respected and that even after death, they continue being part of the community. The only difference between these two communities arises in the manner in which they seek to ensure that the dead continue being part of the community. While the Geeks cremate the dead, the Callatians eat their dead. A superficial understanding of the cultural relativism school of thought would make one to quickly jump to the conclusion, depending on his or her set of beliefs, that either the Greeks or the Callatians are immoral. Yet, this should hardly be the case. One must always seek to identify and critically assess the rationale behind acts performed by various persons or groups of persons. In the long run, they will realize that just like the case among the Callatians and the Greeks, there is a common belief, a common moral strand, it is only the means by which the belief is manifested that differs.

In conclusion, this submission contends that individuals should not hide under the veil of cultural relativism so as to commit immoral acts. Indeed, even cultural relativism itself in more often than not underlined by a common strand of morality.

The notion of social contracts was first advanced by such scholars as Thomas Hobbes and Jean Jacques Rousseau. According to these scholars, the social contract was a contract between the governing and the governed which detailed the expectations and responsibilities placed on either party. Similarly, in the business context, the social contract details certain expectations on either party to the contract. This is especially with regard to ethics as far as business is concerned. According to Donaldson and Dunfee, the refined theory that illustrates the applicability of social contract to business ethics can be termed as the “Integrative Social Contracts Theory.” A fundamental question that begs to be answered is what exactly are the pros and cons of the social contracts approach to business theory? This submission proceeds to highlight some advantages and disadvantages of the social contracts approach to business theory.

One key advantage of the social contracts approach to business theory is that it advocates for the idea of grand or super norms which transcend across boundaries and cultures (Donaldson and Dunfee). However, despite transcending boundaries and cultures, such norms underlie all business activities. An example that could be used illustratively is honesty in business contracts. Irrespective of the culture or boundary in which a business is conducted, the expectation by all the parties is that they will be honest with each other. Such a norm arises from the social contract theory in that it is implicit in every business activity. The advantage of having such a norm is that it makes it much easier to carry out business activities (Donaldson and Dunfee). Indeed, while due diligence has always been encouraged, it would be extremely cumbersome to undertake business activities with the belief that the persons one is dealing with are lying. The social contract places on every such person involved an obligation to be truthful.

The social contracts approach to business theory is also instrumental in achieving standards that bind all players in a given industry (Donaldson and Dunfee). For instance, where the social contract theory demands that companies do not make products that are harmful to people, in time, this becomes a grand norm. In the long run, any companies which were involved in processing or manufacturing harmful products will have to change so to abide by the grand norm. Numerous advantages flow from this key benefit of the social contracts theory. Key among these is the fact that as a result of the social contract, the safety of consumers will be enhanced.

There are equally a number of challenges or disadvantages regarding the social contract approach to business theory. The first challenge would arise due to the fact that unlike the social contract advocated by Hobbes which envisaged the governing and the governed as the only two entities in the contract, business involves many diverse players thus the idea of a social contract binding all these players may not be tenable. Secondly, differences in cultural and national practices may also be a great impediment in actualizing the social contract approach to business theory. Indeed, such differences may only serve to ensure that the said benefits of the social contract approach to business are never manifest but simply remain theoretical.

In conclusion, this submission contends that the pros of the social contract approach to business theory outweigh the cons. It is a theory which is especially relevant in the twenty first century business environment.

Works Cited

Donaldson, Thomas and Thomas W Dunfee. Ties that Bind: A Social Contracts Approach to Business Ethics. Harvard: Harvard Business Press, 1999.

Shomali, Mohammad A. Ethical Relativism: An Analysis of the Foundations of Morality. London: Saqi, 2001.