Chapter 2: Ethical Theories
Chapter 2: Ethical Theories BLW 201
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This 4 page Class Notes was uploaded by Shannon Panagopoulos on Thursday January 14, 2016. The Class Notes belongs to BLW 201 at DePaul University taught by Daniel T. Gillespie in Winter 2016. Since its upload, it has received 19 views.
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Date Created: 01/14/16
Ch. 2: Business Ethics Ethical Theories Ethics — study of what is right or good for human beings. Business Ethics — study of what is right and good in a business setting. Ethical Fundamentalism — individuals look to a central authority or set of rules to guide them in ethical decision making. Ethical Relativism — actions must be judged by what individuals subjectively feel is right or wrong for themselves. Situational Ethics — one must judge a person's actions by first putting oneself in the actor's situation. Utilitarianism — moral actions are those that produce the greatest net pleasure compared with net pain. – Act Utilitarianism — assesses each act according to whether it maximizes pleasure over pain. – Rule Utilitarianism — supports rules that on balance produce the greatest pleasure for society. CostBenefit Analysis — quantifies the benefits and costs of alternatives. Deontology— actions must be judged by their motives and means as well as their results. – Kant’s categorical imperative John Stuart Mill (18061873) • Disciple of Jeremy Bentham • Author of “Utilitarianism” – Rejects concepts of natural law – Describes the “pleasure principle” • Author of “On Liberty” – Describes the “harm principle” • One should be free to do as he wishes as long as he doesn’t harm someone else. John Austin (17901859) • Systematic exponent of “legal positivism.” • Main points of Austin’s theory of law: 1. The law is a command issued by the uncommanded commanderthe sovereign. 2. Such commands are backed by sanctions. 3. A sovereign is one who is habitually obeyed. Kant’s Categorical Imperative (17241804) • Enlightenment Philosopher • Act only according to that maxim by which you can, at the same time, will that it should become a universal law. • Act as never to treat another human being as just a means to an end. – This has been described as a variation of the Golden Rule. Social Ethics Theories • Focus is on a person's obligations to other members in society and also on the individual's rights and obligations within society. Social Egalitarians — believe that society should provide all its members with equal amounts of goods and services regardless of their relative contributions. Distributive Justice — stresses equality of opportunity rather than results. Libertarians — stress market outcomes as the basis for distributing society's rewards. Other Theories Intuitionism: – A rational person possesses inherent power to assess the correctness of actions. Good Person: – Individuals should seek out and emulate good role models. “Television Test”: – Imagine that every ethical decision we make is broadcast on TV. – An appropriate ethical decision is one we would be comfortable seeing broadcast on TV. Kohlbergs’s Stages of Moral Development Levelsls Perspective Justificationcation K Preconvventi(Chididhodo)) Self Puuniihmmentt/ewwa Connventional Addolescent) GGroupp Grouup Normss Postconveento(Adult) lt) Unniversal MooralPrincipes Ethical Standards in Business accepted model. cal System — Kohlberg's stages of moral development is a widely is not clear whether it should be held morally responsiblestatutorily created entity, it Ethical Responsibilities of Business because all the conditions for perfect competition have not been satisfied and free competition cannot by itself achieve other societal objectives. Corporate Governance — vast amounts of wealth and power have become concentrated in a small number of corporations, which are in turn controlled by a small group of corporate officers. Arguments Against Social Responsibility Profitability — because corporations are artificial entities established for profit making activities, their only social obligation should be to return as much money as possible to shareholders. (Milton Friedman). Unfairness — whenever corporations engage in social activities such as supporting the arts or education, they divert funds rightfully belonging to shareholders and/or employees to unrelated third parties Accountability — a corporation is subject to less public accountability than public bodies. Expertise — although a corporation may have a high level of expertise in selling its goods and services, there is absolutely no guarantee that any promotion of social activities will be carried on with the same degree of competence. Stakeholder Model: Managers Suppliers Employees Corporation Responsible T o: Customers Community Stockholders
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