Without question "business ethics" is one of the hot topics of the day. Over the past months we have seen business after business charged with improper practices that violate commonly accepted ethical norms. This has led to a loss of confidence in corporate management, and has had severe economic consequences. Business ethics serves the important social function of integrating business and society, by promoting the legitimacy of business operations, through critical reflection. The social function of business ethics is implicit in leading business ethics foundation theories. Significant legal and ethical concepts are applied to establish the social integrative function of business ethics and to provide strong theoretical arguments against often heard criticisms of business ethics. Many of these criticisms are ideological in nature, in that they systematically play down the importance of integrative functions in the business society relationship, on the grounds of unrealistic assumption about the performance of economic and bureaucratic institutions.
However, business ethics itself can also become ideological, if it forgets that the conditions for the application of ethics to business are not always ideal as well. This paper sets out to explore the potentials of a functional approach to business ethics and its relation to law.
Business ethics does not stand by itself. It depends in large measure on the insights of political and ethical philosophy. Of course, it is not possible to do everything at once, and works in business ethics cannot be expected to deal with more general questions about the ultimate normative dimensions of capitalism, much less with the fundamental nature of morality and moral reasoning. Nonetheless, it is important to note three fundamental political and ethical insights that are crucial to appreciating the ethical significance of capitalism.
Rule of Law
To begin with it should be understood that...