Business decisions come hand in hand with ethical considerations. Modern times present itself with a growing structure that looks to cater for both a society perspective and a business sense of point. One cannot simply look at the income, market exposure and business generated but the social aspect in many cases takes precedents. How does a decision impact an individual? Is it for the greater good as the theory of Utilitarianism describes, or perhaps decisions that do not depend on consequences but merely fulfil society’s duties, as Immanuel Kant argues. The rights and justice of decisions also come into fruition. These aspects must be considered in any form of decision, and apply directly to the case of Chinas expanding auto industry. Arguably, the study of business ethics is a complex combination of theories and ideals of proper conduct amongst humanity as well as interaction within the organizational environments. These theories reflect upon human morality, rationality, simple equality and fair opportunities, difference in cultural understanding of ethics. They also work well applying calculative evaluations of one’s actions and decision making on society as whole. Looking closer at the Chinese auto industry and the attempts of foreign companies to expand it, provides many social and ethical dilemmas that assist in justifying the overall success and applicability to the proposed initiative
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In the case of Chinas Auto Industry the main action is the selling of foreign cars into the Chinese market. Selling the motor vehicles into the market creates a positive outcome in economic terms for the foreign car manufacture as sales continue to grow, as well as benefiting Chinas economical development (Becker, 2011). This action also addresses the Chinese consumers as they are given a greater verity of vehicles to choose from. Assessing benefits to the parties involved, one may conclude that the foreign expansion to China is ethically correct, however the theory of Utilitarianism suggest that all aspects and interests of all parties involved must be taken into account. This concept refers to the moral approach of decision making process which deals with evaluation of one’s wishes versus long term implications (Shaw, 1999). The theory simply states that “an action is right, if it produces or tends to produce the greatest amount of good for the greatest amount of people affected by the action. Otherwise the action is wrong” (Mill, 2009). Do the expansion into China and the assistance constitute the greater good? Consistent increase in the volumes of sold foreign cars in Chinese market will undoubtedly increase pollution due to the greater production of carbon dioxide. With the greater production of carbon dioxide the health risk associated will dramatically increase. Expects predict that the level of lung cancer as well as tuberculoses will drastically increase not only amongst China but it will also affect neighbouring countries (Velasquez, 2012). With China’s rapidly growing population the consumption of oil will also increase. Applying the theory of Utilitarianism and taking into consideration the interest of all parties involved it is plausible to suggest that foreign assistance into Chinas Auto Industry is deemed ethically incorrect. This is supported by the theory of the fact that this action does not achieve greater good for the greatest amount of people involved.
The utilitarianism theory casts a shadow of doubt over the proposed ethical ramifications of the expansion of the car industry. It seeks to establish the greater good and concise ethics in decisions (Ferrell, 2012). Due to underlying factors that take into consideration the environmental and economic stand point of the Chinese society, the theory does not succeed in its overriding ambition. Interestingly, Immanuel Kant opposed the theory of Utilitarianism and opposed the concept of consequences of actions (White, 2011). The expanding Chinese auto industry demonstrates that the act itself is unethical. If such heavy investment was to be made universally, the global environment would be under great danger. For example, carbon dioxide would interfere with the greenhouse effect. Investment in motor vehicles would also put restrains on the availability of oil as the oil consumption will grow and will then put a danger on the naturally found resource of it availability. Kant proposed that actions must be rational; if they are rational therefore they are moral. Kant’s theory simply states that “the rightness or wrongness of actions does not depend on their consequences but on the whether they fulfil our duty” (George, 2010). The concept of human worth is being under question within the expanding auto industry of China as the population health is being put at risk. With the increasing numbers of car production the level of pollution will increase, therefore the risk of lung cancer and tuberculoses and other health hazards will increase. Furthermore, the Chinese government does not take into consideration its citizens human worth, as they are not asked whether they would prefer to have a wider choice within the automobiles and therefore put their future population at risk. Kantian deontology supports this basis and he specifically looks at the action of a situation rather than its consequences (Hare, 1981). Foreign investors who are seeking an opportunity within the Chinese market are only trying to foresee the opportunity to help themselves, their action is driven by greed and overzealous. Bearing in mind this problem faced by the industry, the growing concern of justice comes to mind and how it impacts the society.
In common sense justice refers to giving someone their due or ultimately what they deserve (Velasquez, 2012). This can be summed up by the most fundamental principle of justice is “equals should be treated equally and unequal’s unequally” (Sandel, 2010). Based on this concept and in particular aligned to the concept of rights theory, the economical impact of expansion can provide clues to the injustice of the proposed expansion. Specifically, the economic status of current employment in the country can be tarnished and ruined by the influx of foreign companies. In line to the principle of justice, would this ideology of employment issues classify as injustice? The presumption strongly suggests that this is the case.
John Rawls theory on justice highlights the growing concerns for China’s expansion of the automobile industry. Of particular notice within John Rawls theory is his reference to the extent to which society’s institutions ensure that benefits and burdens are distributed among society’s members in ways that are fair and just (Rawls, 2005). When the institutions of a society distribute benefits or burdens in unjust ways, there is a strong presumption that those institutions should be changed. The influx of companies and their expected impact on employment issues highlights the extract in John Rawls theory that benefits should be distributed in ways that are fair and just. With a proposed increase of foreign companies, local jobs come under threat. Does that constitute fair and just? Evidence says no and according to Rawls theory, injustice would prevail. Therefore, according to Rawls, a principle is moral if it would be acceptable to a group of rational, self-interested persons who know they will live under it themselves (Mandle, 2009).
Interestingly, Robert Nozick can further cement the theory of justice and support the notion of injustice amongst the foreign consortium of assistance to the Chinese market. Nozick concurs that we have property rights to keep our possessions as long as they were attained fairly without violating other people’s rights, harming others, or defrauding them (Wollfx, 1999). With the foreign assistance how can local business attain possession fairly? More competition, more foreign involvement, less employment opportunities and less economic stability for people are all elements that question what is fair and just.
The growing and expanding consortium of companies can provide undoubted ramifications for China’s population and economy. Again more questions are raised to the ethical decisions and in particular, will the influx of foreign cars impact the environment? Concretely it can be seen that an increase of cars will already lead to a growing carbon dioxide problem for China’s population (Velasquez, 2012). Based on this assumption, would the go ahead of assistance from companies be morally right? The negative right theory supports the notion of rights that do not confer to the standards expected. For example, according to the ‘Negative Right’ theory, negative rights pertain to the obligations on the part of other people to refrain from interfering with our freedom of action (George, 2010). It holds that our basic human rights include rights to life, liberty, and private property. In that sense, the increase in pollution in the already heavily polluted air can affect the population in more drastic ways, thus supporting the notion that life is a basic human right. People need the right to obtain oxygen therefore an increase in pollution can cause drastic problems. This supports the notion that the assistance of companies in the expansion of the car industry is morally incorrect. This also raises the question of how would the influx of companies’ effect employment within society. The presumption lays with the concept that foreign assistance will increase market competition and run the effect of employment issues thus impacting on individual’s right for property. Increase in market competition or decrease in Chinese car manufacturers resulting in loss of employment are all elements that support the ‘Negative Right’ theory, making the expansion of the car industry immoral.
In light of the Rights theory it can be determined that business does not operate in a vacuum. Decisions made by business, in this case companies assisting China in expanding their automobile industry have far-reaching effects on society. It comes to fruition that many business decisions were made solely on a cost-benefit analysis or otherwise known as the “Bottom line” impact (MacKinnon, 2012). Such decisions may cause negative externalities for others. Corporations are considered to owe some degree of social responsibility for their actions.
According to the theory at hand, it involves creating or evaluating moral standards. Thus, it is an attempt to figure out what people should do or whether their current moral behaviour is reasonable. Is it morally correct for the assistance of foreign companies and their footprint into China’s car industry? To determine this aspect, the need to determine what constitute is ‘justifiable’ needs to be established. Do the companies see past the social aspect of their decision to assist the car industry or is it merely a business consideration. Although it is difficult to answer, normative ethical relativism provides a process which involves examining the moral standards people currently use in order to determine if they are justifiable, as well as attempting to construct new moral standards which might be better (Long, 2004).
The ultimate goal of all of this is to show how it might be possible to develop a consistent and reasonable system of moral rules which are valid for all. Normative ethics is involved with demonstrating how moral questions and rights can be answered with consistency and in the context of some general moral principles or rules (Ng, 2011). In short, normative ethics addresses questions such as, what should be our moral obligations? What is right and what is wrong? From a consumer perceptive, you have an increase of choice in cars, therefore the expansion into China is justified. However with the perceived impact on the environment, economic stance of people and employment issues, then will this constitute an ethical moral standard? Based on the theory this would be presumably morally wrong. It benefits those with an interest in business production and expansion and benefits consumer seeking a variety of cars, however it does not take into consideration moral standards of all and the social impacts i.e. health, lifestyle, employment.
Ethical consideration in decision making is an area of high importance. The outside perspective shows that the expansion into China’s auto industry is a wise move, as it offers great economic prosperity for the country as well as satisfying Chinese consumer markets with a broader range of automobiles. However from an inside perspective the alarming ethical issues raise concerns into how certain decisions can have a larger and more confronting impact on society. Ethical theories have pinpointed the problems and have provided arguments into the ramifications. Under the Utilitarian theory examined, decisions must be made for the greater good of society; Kant further provided evidence the unethical consequences of expansion into China by arguing the need for decisions to fulfil society’s duties. Evidence shows that in the case study of the expansion of the Chinese auto industry the heavy investment made by the foreign car manufacturing was in fact an unethical decision, as it does not take into the account the possible effect it may have upon the Chinese environment, economy as well as the consequence upon the next generations.
