The Social And Political Environment Of Business by LisaB1982

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									The Social and Political Environment of Business
• Social Role of Business • Ethical Business Policies
– Descriptive – Normative

• Political Role of Business

Course Topics
• • • • • • Product Liability Privacy Issues Employment Advertising/Marketing The Environment The Community

Ethics
• Free Market Theory • Utilitarianism • Rights Theory

Free Market Theory
• Corporate responsibility: Maximize shareholder wealth • Government responsibility: refrain from interference in the “free market”

Free Market Theory
• Milton Friedman
– “social responsibility” = costs to owners and customers – Business manager acts as agent – “social responsibility” is socialism not free market – Rationalization of economic decisions – Exception: “without deception or fraud”

Free Market Theory
• Rebuttal to Friedman
– Normative ethics – Political v. economic systems – What is a cost to one group is a benefit to another – Stockholders – investors or owners? – Failures of the free market

Utilitarianism
• Maximization of the greatest good
– Greatest good – Norms for right and wrong – Good, right and wrong are relative

Utilitarianism
• Value
– Intrinsic – Instrumental

Utilitarianism
• Classical Utilitarianism
– Bentham (1748-1832)
• Hedonism
– Pleasure/pain

– Mill (1806-1873)
• Happiness

– Politcally radical at the time

Utilitarianism
• Contemporary Utilitarianism
– Preference Utilitarianism
• Satisfying wants and desires

– Interest Utilitarianism
• People’s best interests • Good is objective

Utilitarianism
• Objectification of “good” • Measurement of “good”
– Quantitative or qualitative

• Measurement of consequences

Rights Theory
• Types of rights
– Basic rights – Derivative rights

• Rights create obligations • Conflicting rights

Corporate Social Responsibility
• Stakeholder Theory • Social Contract Theory • The Corporation as a Morally Responsible Agent

Stakeholder Theory
• Expands corporate responsibility beyond shareholders • Greater good of non-shareholders

Stakeholder Theory
• Primary stakeholders
– – – – – – Stockholders Suppliers Customers Employees Community Management

Stakeholder Theory
• Secondary stakeholders
– – – – Governments Media Special interest groups Financial institutions

Stakeholder Theory
• Principles
– The corporation should be managed for the benefit of its stakeholders – Management bears a fiduciary relationship to stakeholders and to the corporation as an abstract entity, ensuring both the survival of the firm and the long-term interests of the stakeholders

Stakeholder Theory
• Equitable distribution of benefits • Increased pool of resources • Checks and balances

Social Contract Theory
• Implicit contract between members of society • Negative duties • Positive duties • Universal moral norms

The Corporation as a Morally Responsible Agent
• Corporation as an actor • Combinations of individual actors • Corporate liability and public policy


								
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