Chapter 1 Ethics and Business
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Law and Ethics
Law
Ethics
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Stakeholder Analysis
When analyzing business and ethics, we
will be mindful of the stakeholders.
Who are a corporation’s stakeholders?
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Theories of Ethics
Ethical fundamentalism—People look to an outside
source or central figure for ethical guidelines Utilitarianism—People choose the alternative that would provide the greatest good to society Kantian ethics—A set of universal rules based on reasoning establishes ethical duties Rawls’s social justice theory—Moral duties are based on an implied social contract
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Social Responsibility of Business
Social responsibility
of business is a duty owed by businesses to act socially responsible in producing and selling goods and services
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Theories of Social Responsibility
Maximize profits – To maximize profits for stockholders Moral minimum – To avoid causing harm and to compensate for harm caused Stakeholder interest – 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 Prentice Hall © 2001 6
Examples of Ethical Questions
Is it ethical to pay bribes in a foreign
country where that is the common business practice? Is it ethical to use cartoon characters to advertise cigarettes?
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Merck
River Blindness Moral Obligation?
Financial Obligation?
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Ethical Relativism
When In Rome, Do As
The Romans Do?
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Arguments Against Business Ethics
In perfectly competitive free markets, the
pursuit of profit will by itself ensure that the members of society are served in the most socially beneficial ways Business managers should do what is in the best interest of its firms Obeying the law is all the ethics you need.
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The Case For Business Ethics
Businesses will collapse without it All businesses require a stable society in
which to conduct business It is in the best interests of business to promote ethical behavior among its own members and within society Ethics is consistent with the pursuit of longterm success and profit
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