The law is the most important source for ensuring that consumers receive a fair deal from retailers and manufacturers. The various health and safety laws have ensured substantial improvements in working conditions for employees. Contract law entails that employers no longer have complete freedom to make contracts or

in many jurisdictions trades unions represent the workers in wage and work conditions. Notwithstanding the advances in the law, this does not mean that business can leave the law to resolve its moral dilemmas. Management are expected to act in a responsible manner. Either management ascribe to the ‘no difference theory’, whereby they should maintain the same standards of ethical  behaviour in business as they would in their private lives or they ascribe to the value set within the firm.


This view of business ethics is often referred to as the coincidence theory: virtue and prosperity fortuitously coincide. If a firm sells defective goods, customers will simply discontinue purchasing the firm’s products. Management desires to avoid legal disputes and wish to ensure that the firm’s activities from hiring and firing employees, supply chain management to selling and sales all fall within best practice. An ethically ‘clean’ firm runs less risk of litigation. Litigation and adverse publicity have followed all the major disasters in the business world: the Bhopal disaster in India, the Zeebrugge ferry disaster off the coast of Belgium, Exxon oil spillage off the Alaska coast, Perrier bottled water contamination in Europe. In many respects legislation provides a baseline, below which business should not stoop.


In considering whether religion itself is the ultimate source of moral authority, Europe’s Age of Enlightenment in the 18th and early 19th centuries was marked by an emphasis on human reason. In matters of morality, what was right or wrong, good or bad, was not to be accepted simply because of divine authority or the authority of a Church; rather human reason could be trusted as the arbiter of truth, right and wrong, bad and good. The German philosopher, Kant, believed that the essence of morality was to be found in reason: it was by a process of rational deduction (as distinct from religious faith) that one could discover the basis of right and wrong.

The first thing that reason tells us, Kant argued, is that one’s duty is to be done for duty’s sake. Morality is not the same as self interest, or even benevolence. If the fact that Jones is an employee were the reason for treating him well, then management would be let off the hook if, say, management were to quarrel with him, and the friendship were to come to an end. In other words, feeling of friendship or compassion for others cannot constitute truly moral grounds for acting. The moral law, Kant argued, was to be obeyed because it is the right thing to do, not because of any consequences, which accrue to moral behaviour.

The second point, which Kant noted about the moral law was that it is by nature universal, unless there is an exception. For example, Mr A in a poor country may accept bribes whereas Mr B in a relatively rich country may not. Each are acting according to different principles or maxims: the poor man, ex hypothesis, has no means of survival.

A ‘maxim’ for Kant is the personal principle on which we act. He defined his categorical imperative, a basis for Kantian moral theory as follows:

“I ought never to act except in such a way that I can also will that my maxim should become a universal law”. Therefore, for bribery or theft to be right in one set of circumstances but wrong in another there must be a relevant difference in those circumstances and hence in the maxims on which the various parties are acting. But can the maxim become universal?

In order to answer the question, critics of Kant, have introduced additional principles to those identified by Kant. The debate need not detain us. Suffice to say that Kant insists that his moral theory is independent of the consequences.


As in our example, in making a moral decision, one might balance one person’s welfare against someone else’s and reach a decision on the basis of which course of action achieves the greatest good. To argue in this way is to adopt what is referred to as a ‘consequentialist’ approach to morality. Unlike Kantianism, what is really important for consequentialists is not moral principles that seem to be carved in tablets of stone but outcomes of ethical decisions. The best known of the theories is utilitarianism, which holds that actions are right in so far as they are conducive to the greatest happiness of the greatest number of people and wrong in so far as they are not. The utilitarian is not recommending that right actions must invariably produce large amounts of happiness. Let us suppose that the management team notes that the firm is losing market share to its competitors (say) because it has not kept up with innovative new product designs.

Management have a choice: either they introduce new technology and offer redundancies or alternatively suggest a reduction in wages. If they do not introduce new technology the firm will probably continue to be uncompetitive and eventually

close. Firm closure will have much worse consequences than the alternative. The greatest happiness in this case really translates into the least misery. This raises two further issues: (i) there is an over-emphasis on the amount of happiness with no reference to the distribution of happiness; and, (ii) individual actions are piecemeal. Combined these two issues raise an important point: is human happiness the only consideration to be taken into account when deciding what is right and wrong?

In the example above, an element of justice could be introduced into the choice of wage reductions. Suppose workers receive Kshs. 8,000 and management receive Kshs 80,000. Management have a choice: it can award itself a reduction in payments with a meagre increase for workers or it can endure a management wage freeze until the firm recaptures its lost market share. Alternatively, management could introduce voluntary redundancy schemes or a performance related pay structure. These solutions are more just than any arbitrary reduction in wages and they are also relevant to determining what is right or wrong. And such a determination requires the adoption of rules within the firm, which are defined in terms of duties.


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