CBA Ethical Bank Case Study

However, a private company only has the obligation to prevent harm. It must make sure its activities do not impact anyone negatively. The prevention of harm is an extra step in the path to ethical conduct. CBA has to begin with the bare minimum and then build on the foundation. Doing no harm sounds relatively straightforward but it is not. The complexity of defining harm is especially visible in low-income nations where the people are desperate for jobs. Friedman asserts that a company is not morally responsible for the prevention of harm. That is indeed true to some extent. The absolute minimum standard is for companies not to do harm. The choice to prevent harm is one that should be contemplated deliberately and carefully.

It is an idea that does not sound realistic at all. That said, CBA will need to refrain from lobbying for it to be an ethical bank. Stakeholder Management There are two main ways of categorizing stakeholders. The first is the narrow view which defines stakeholders as those entities the firm needs to survive. A broad view asserts that stakeholders are all the entities affected by the organization (Reyes, Kim, and Weaver 39). Modern ethics calls for companies to treat their workers as partners. Ethical organizations should protect the employees from physical and emotional harm as they help the workers attain a high level of wellness. An investor’s primary interest is to protect his or her capital. He or she trusts the management to make good use of any resources afforded to it.

Therefore, it would be an injustice to these investors if the management diverted the money for personal use. As the crash of 2008 showed, banks have an immense potential to cause harm to the public at large and clients in particular (Ims and Pedersen 50). A fraudulent bank robs from the public. A bank which supports criminal organizations directly contributes to the harming of society. Therefore, a bank that wants to be ethical has to stop itself from doing any harm. That means protecting customer information and cash, being accountable to government authorities, following the law, and communicating honestly with the public. The use of the Critical Theory will help the managers understand why the public feels that way and what can be done to rectify the situation.

Secondly, the theory will aid the bank in deciding what its ethical boundaries are. As stated earlier, the definition of “harm” can be confusing as society evolves and redefines morality. Some time ago, investing in a sweatshop in Vietnam was not a serious ethical issue in the country. However, the social climate has changed and the public is sensitive to any negative news about a brand. The very idea of ethics is yet to be settled to this day as different schools of thought push their own interpretations. Therefore, it is reasonable to rely on a system that calls for constant evaluation. The theory demands the constant collection and analysis of accurate, relevant, and current data on the environment. One should know and understand as many environmental factors as possible so that he or she can mitigate against them.