Crane & Matten, Business ethics, 3rd Edition, Chapter 6

Suggested answers to the Think Theory exercises associated with the Ethics in Action boxes

THINK THEORY 1 Think of the duties of managers to their shareholders from the perspective of ethics of duty (Kant’s theory). Apply this theoretical lens to the three incidents described above.

In each case, management in the three incidents failed to respect the ethics of duty. Kant’s Maxim 1 is about an action being right only if everyone could follow the same underlying principle (the ‘golden rule’). For example, Ahold management concealed the true state of affairs from the company’s owners (and everyone else), action which they cannot have wanted to become a universal law. Maxim 2 requires human dignity to be respected, with people being treated as ends, not means. For example, management at Porsche treated the company owners instrumentally, not respecting their dignity, essentially treating them as ‘finance-providing ends’. Maxim 3 is about universality; whether the principles of an action would be acceptable for every person. The fact that 90% of shareholders voted against Goodwin’s pension is clear evidence that this was not the case at RBS.

THINK THEORY 2 Thinking of different corporate governance practices around the world, are these just ‘different’ (i.e. reflecting different cultural and customary practices) or would you argue that some of them are clearly more or less ethical from a moral perspective?

One could perhaps argue that some governance models are more ethical than others. For example, the continental European model focuses more on employees as key stakeholders than does the Anglo-American model. However, this focus on employees could be to the detriment of other important stakeholders. One could also argue that some models are less ethical than others; the Russian model, with its