Chapter 02---

Competitive Multinational Company

Companies that prioritize ethical conduct, social responsibility, and sustainable practices beyond legal compliance.

Competitive Advantage

An attribute that is difficult to imitate and enables a firm to outperform its competitors in the same industry.

Utilitarianism

An ethics theory advocating actions that foster happiness and opposing actions that cause unhappiness.

Rights Theory

An ethics theory that states every human being has rights which all governments are obligated to protect.

Justice Theory

An ethics theory describing a society of free citizens with equal basic rights and cooperation within an egalitarian economic system.

Cultural Relativism

An ethics theory stating that the morality of an act depends on its perception within a specific culture at the time of the act.

Corporate Social Responsibility (CSR)

The belief that a company should incorporate social objectives within its goals and policies, positively contributing to society.

Stakeholder Theory

A view of capitalism that emphasizes the interconnected relationships between a business and those who have an interest in the organization.

Benefit Corporation

A form of business entity legally empowered to pursue positive stakeholder impacts alongside profits.

B Corporation

A certified movement promoting businesses that meet higher social and environmental performance standards.

Benefits of competitive advantage that embraces ethical behaviour

Greater brand loyalty, equity and differentiation
Higher employee retention
Increased sales/margins
Enhanced goodwill from Communicty
Lower risk of legal issues (lawsuits, protests, boycotts)

Principle sources of Unethical Behaviour

Moral integrity of Individuals

Firms management and policies

Stakeholders

Directly involved and affected by business actions

Shareholders

Financially tied to organization but don’t have any power in company

Adam Smith

Competitive markets are the most efficient method of allocating resources and maximizing society’s well being

(Max Profits)

Milton Friedman

A company’s sole responsibility is to maximize profits for its owners (shareholders) (Max profits)