Professional Documents
Culture Documents
by Henry R. Cheeseman
Introduction
Businesses organized in the United States are subject to its laws. They are also subject to the laws of other countries in which they operate. Business persons owe a duty to act ethically in the conduct of their affairs. Businesses owe a social responsibility not to harm society.
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Ethical Relativism
Kantian Ethics
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Ethical Fundamentalism
Ethical fundamentalism - When a person looks to an outside source for ethical rules or commands. Critics argue that ethical fundamentalism does not permit people to determine right and wrong for themselves.
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Utilitarianism
A moral theory that dictates that people must choose the action or follow the rule that provides the greatest good to society. This does not mean the greatest good for the greatest number of people. Has been criticized because it is difficult to estimate the good that will result from different actions.
with no exceptions. 2. Reversibility the actor must abide by the rule he or she uses to judge the morality of someone elses conduct.
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Rawlss social contract A moral theory that says each person is presumed to have entered into a social contract, with all others in society, to obey moral rules that are necessary for people to live in peace and harmony.
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choosing moral principles is impossible in the real world. 2. Many persons in society would choose not to maximize the benefit to the least advantaged persons in society.
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Ethical Relativism
A moral theory that holds that individuals must decide what is ethical based on their own feelings as to what is right or wrong. There are no universal ethical rules to guide a persons conduct. If a person meets his or her own moral standard in making a decision, no one can criticize him or her for it.
A criticism of this theory is that an action usually thought to be unethical would not be unethical if the perpetrator thought it was in fact ethical.
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Such decisions may cause negative externalities for others. Corporations are considered to owe some degree of social responsibility for their actions.
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Ethics Brief Corporations that conduct social audits will be more apt to prevent unethical and illegal conduct by managers, employees, and agents.
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Ethics is a function of history, culture, religion, and other factors. Therefore, ethical standards vary from country to country. The Caux Round Table promulgated an international ethics code called the Principles for International Business.
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Principle 2 The Economic and Social Impact of Business: Toward Innovation, Justice, and World Community
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Principle 3 Business Behavior: Beyond the Letter of Law Toward a Spirit of Trust Principle 4 Respect for Rules
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Corporate Citizenship
Stakeholder Interest
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Maximizing Profits
A theory of social responsibility that says a corporation owes a duty to take actions that maximize profits for shareholders.
The interests of other constituencies are not important in and of themselves.
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Moral Minimum
A theory of social responsibility that says a corporations duty is to make a profit while avoiding harm to others. As long as business avoids or corrects the social injury it causes, it has met its duty of social responsibility.
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The legislative and judicial branches of government have established laws that enforce the moral minimum of social responsibility on corporations.
e.g., Occupational safety laws e.g., Consumer protection laws for product safety
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Stakeholder Interest
A theory of social responsibility that says a corporation must consider the effects its actions have on persons other than its stockholders. This theory is criticized because it is difficult to harmonize the conflicting interests of stakeholders.
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Customers
Creditors
Local Community
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Corporate Citizenship
A theory of responsibility that says a business has a responsibility to do good. Business is responsible for helping to solve social problems. Corporations owe a duty to promote the same social goals as do individual members of society.
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This theory argues that corporations owe a debt to society to make it a better place.
A major criticism of this theory is that the duty of a corporation to do good cannot be expanded beyond certain limits.
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To consider the interests of all stakeholders, including stockholders, employees, customers, suppliers, creditors, and local community. Corporate citizenship To do good and solve social problems Stakeholder interest
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Corporate audits should be extended to include the moral health of the corporation. Corporations that conduct social audits will be more apt to prevent unethical and illegal conduct by managers, employees, and agents.
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The companys personnel should cooperate fully with the auditing firm while the audit is being conducted.
Copyright 2004 by Prentice-Hall. All rights reserved. 7 - 35
The results of the audit should be reviewed by the companys board of directors.
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