PHIL 2274 Study Guide Exam 2
PHIL 2274 Study Guide Exam 2 PHIL 2274
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This 6 page Study Guide was uploaded by Bridie Burke on Sunday March 20, 2016. The Study Guide belongs to PHIL 2274 at East Carolina University taught by Kenneth Ferguson in Fall 2016. Since its upload, it has received 476 views. For similar materials see Business Ethics in PHIL-Philosophy at East Carolina University.
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Date Created: 03/20/16
PHIL 2274 Business Ethics Study Guide Exam 2 3/21/16 Capitalism Capitalism – an economic system that operates on the basis of profit and market exchange and in which the major means of production and distribution are in private hands Capital – money being used for a specific purpose – to make more money (closely related to private property) An argument for capitalism is that it reflects people’s natural right to property as well as private ownership of the means of production Another – it is the most efficient and productive economic system (utilitarian consideration) Adam’s Invisible Hand done privately with limited gov. interference competitive Bush said “it’s not a zero-sum game” – we can all be winners Adam Smith’s Invisible Hand Smith argues when people are left to pursue their own interests, they will, without intending it, produce the greatest good of all Everyone’s private pursuit of wealth results as if guided by an invisible hand – in the most beneficial overall organization and distribution of economic resources Human beings have a natural instinct for trade and so in pursuing our individual economic interests, we can benefit society as a whole March 1996 – employment rose (5.5 5.8%) Good news for job seekers, NYSE Jones dropped 171 pts With more jobs comes more money things are more expensive inflation money is worth less (helped some, hurt others) Capitalism has corporations Corporations – private organizations, artificial persons They are legal entities, with legal rights and responsibilities similar but not identical to those enjoyed by individuals. Business corporations are limited-liability companies- their stockholders are liable to corporate debts only up to the extent of their invesments. Limited Liability – not the same as partnership, organization becomes a corporation when it is registered by law and the shareholders only benefit from their investment after it is declared a corporation by law Chief Justice John Marshal described as “artificial being, intangible, invisible” They risk other people’s money, and sell shares Not responsible for corporation’s money Allows them to evade legal responsibility CEO (boss) Board of Directors (elected) Shareholders (owners) *Board of Directors act as mediator because share holders have a ton of money but may not know how to run corporation Fair Wages Competition – is a regulator that keeps a community activated only by self- interest from degenerating into a mob of ruthless profiteers Because of competition – people with similar interests as our own become competitors and this leads to price gouging or employee exploitation competition makes individual pursuit of self-interest socially beneficial Employees want higher wages, employers want lower Ian Maitland – both shareholders and employees face risks Shareholders place risk when they invest in a corporation Employees risk other possible job opportunities, and anticipate steady income for homes Job Security Employment at Will – an employer may fire, hire, promote, etc an employee whenever and for whatever reason the employer wishes and employees have to rights to demand and appeal. Applies to those in private sector, most of whom are “at will”. Patricia Werhane is strongly against EAW. EAW justified for: 1. Businesses should be able to control their property (not persons) 2. Businesses should have the right to free association 3. EAW increases business efficiency 4. Gov should stay out of business Negligent Hiring – in order to accuse of negligent hiring, must prove: 1. X worked for Y 2. X was unfit to work for Y (criminal activity, alcohol, drug, inexperience) 3. Y knew/should have known X was unfit (proximate cause) Cases: Avis Rent-A-Car Had a stand at an airport, with a man and woman working. The man raped the woman Is Avis responsible? Respondeat superior- do what superior says even if you believe it’s wrong According to RS – man worked for Avis – so Avis is responsible Judges now disregard RS and allow for charge of Negligent Hiring American Airlines Man came up to boarding agent without a ticket & boarding agent bit the man and kicked him There had been no prior record of violence – how to prove negligent hiring? Foster v. The Loft Loft = a bar, Foster went to the bar with a friend, friend wasn’t pleased with a drink and the bartender (Rida) said they could leave Foster’s friend threw drink @ Rida, blinded Rida and accidentally punched Foster – Foster & friend sued the bar Insider Trading – buying/selling of shares based on knowledge which is not public Tort = civil penalties – up to 3 times amount lost/gained Crime = criminal Securities Exchange Act (SEA) Gov set up the SEA, section 21A: “if you’re trading shares (buying/selling) while in possession of “material, nonpublic info” you shouldn’t be buying/selling Nonpublic = available to insiders (managers, directors) Material = affects share price It’s strict because we want to maintain an honorable financial system It is responsibility of CEO to prevent insider trading Martha Stewart Imclone was developing a drug (Erbitux) Dr. Sam Waxall found out that the FDA wouldn’t approve of Erbitux, and he had already invested money in it with MS Together they removed investment to avoid losing money Imprisoned for obstruction of justice (denied contact with Sam Waxall) Privacy Richard Lippke – without privacy there is autonomy When you apply for jobs, they have access to many private records: academic, polic credit, medical, drug testing Some offer a psychological profile- a quiz to determine hiring potential Privacy (The right to privacy) 1. A. Parent – the right not to have personal, undocumented info about self possessed by others 2. Warren & Brandeis – “the right to be left alone” 3. John S. Mill – the right to do anything unless harmful to others Workplace Privacy Should allow privacy unless harmful to your work Cases: Elementary Teacher/Swinger Mrs. Pettit – an elementary school teacher for mentally handicapped by day, husband & swingers were night swingers She went on TV and people recognized her, police entered club and gave out tickets for public lewdness (she had sex with 3 men in an hour publicly) School found out – they fired her and she sued School argued 1. Danger - She might expose students to her lifestyle 2. She should be a moral role model to students 3. Her actions were not private – occurred in public Deal v Spears (1992) Sibby Deal was a clerk at a liquor stor, and Sears was the owner Sears lived in a trailer behind the store, they had a party phone line between the store & trailer. Sibby was on the phone a lot Store was robbed $16,000 and Spears thought it was Deal tapped phone for evidence Taped for 22 hours – found Sibby having an affair with Calvin Lucas – she was giving Lucas discounts Spears fired her She sued & won because Spears didn’t disclose that he was tapping the phone Privacy: Drug Testing DesJardins & Duska think drug testing of workers is a violation of privacy Arguments for drug test use: 1. Job performance – believe it hinders performance 2. Danger/Safety – necessary only if safety is involved NIOSH (1984) regulate workplace safety They tested work place accidents within a chemical industry and found that of the 3,000 accidents – only 8 involved drugs Enzyme drug test – typically a urine sample Multiplied 99% sensitive (catches 99% percent of users) Immunoassay 90% specific (catches some nonusers) Technique can request alternative tests (GC/MS) Luedtke v. Nabors (1989) Paul Luedtke = driller, Nabors = Alaskan oil company Thought Luedtke was a drug user, asked him to take a physical on land, company wanted a sample of his blood & found traces of marijuana He sued for violation of privacy – judges argued right of safety of others, and was fired Trade Secrets & Patents Trade secret 1. Secret knowledge 2. Competitive advantage 3. Not patented 4. Protected as a secret Patents 1. Public information (to read, not to use) while patent pending 2. Expiry date- 20 yrs after apply date (prevents monopoly) to encourage invention, reward invention. You can posses a 20 year monopoly 3. Expense for patent (must apply for patent in every country where you intend to sell) Kentucky Fried Chicken The recipe for KFC chicken is made of 14 herbs & spices (no one knew except Col. Sanders) Secretary had recipe typed & hidden in vault Donald Wohlgemuth Worked for BF Goodrich, making space suits Another company (International Latex) wanted to make suits but couldn’t figure out valve for oxygen International Latex looked into Wohlgemuth and found he wasn’t paid well and worked with poor lab conditions, so they promised him a pay raise & new lab Donald wanted job, Goodrich ordered an injunction (prevent him from working with company that sold space suits) but court wouldn’t grant injunction Bribery Bribery – giver usually initiates exchange, usually no threat made. Both parties benefit Extortion – recipient usually initiates, sometimes with a threat. One party benefits (also called blackmail) Jeffry Fadiman – found that bribery is the highest in Africa, Asia, and S. America Under President Carter (1977) Issued Foreign Corrupt Practice Act (FCPA) which prohibits US companies from bribing to obtain business contracts Doesn’t exclude gifts (not quid pro quo) Grease payments – to speed up a process Violation of FCPA = 1 mill$, officer of company = $10,000 & 5 years in prison
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