Question

1. Discuss one or two things that the study of business ethics can learn from the idea of “The Tragedy of the Commons”?

Answer 1

The Tragedy of the Commons is a theory which states that people uses the common resources for self use and exploiting it without considering the consequences it have on the whole group. This theory focuses on the selfish behavior of the people who uses the available limited resources for their own benefit without considering the effect if that on the whole community. 'Common' is the resource available for use by the whole community. It basically includes the natural resources that are available to the manking for use by all. For example, Air, water, land, trees, grass, etc. and all the amenities available to us by nature are to be used by all. But, some people are exploiting the use of these resources and for their benefit, they are neglecting the negative it is having on the whole environment and the impact it is having on other community.  

This theory was devised by William Forster Lloyd in 1833, where he wrote a pamphlet specifying the concepts in the 'Tragedy of the commons'. This work of Lloyd was unknown until Garrett Hardin specified his work in his article in science magazine.

Business Ethics is related to applying the right business policies that are for the benefit of all. Business ethics deals with devising the right business policies which can benefit the organization and the society. This deals with effectively using the avilable resources and contributing to the society for using its resources. It includes Corporate Governance, CSR activities, etc.

The things that business ethics can learn from the tragedy of commons is:

1. Effectively using the resources available

2. Compensating to the society fairly for the resources used