Chapter 42: Ethics and Social Responsibility of Business

Vocabulary flashcards covering theories of business ethics, Kantian principles, theories of social responsibility, and public benefit corporations.

Ethics

A set of morals and principles that governs the conduct of a person or a group.

Ethical Fundamentalism

A theory of ethics where a person looks to an outside source for ethical rules or commands (e.g., an "eye for an eye" law).

Utilitarianism

A theory of ethics centered on choosing the action that provides the greatest good for society (e.g., choosing an action that benefits 26 people over one that benefits 25).

Kantian Ethics

A theory of ethics based on the concept that people owe moral duties based on universal rules (e.g., "Do unto others as you would have them do unto you").

Principle of Consistency

A principle of Kantian ethics stating that all cases are to be treated alike.

Principle of Reversibility

A principle of Kantian ethics stating that if an action is made an exception for yourself, it must be made an exception for everyone else.

Rawls's Social Justice Theory

A moral theory stating that fairness is the essence of justice, and that everyone is under a social contract to obey rules to maintain peace.

Ethical Relativism

A theory of ethics holding that individuals decide what is ethical based on their own feelings about what is right or wrong.

Social Responsibility of Business

The requirement or duty that a business should act with awareness of the consequences and the impact it will have on others.

Maximize Profits

A theory of social responsibility stating that a firm owes a duty to take actions that maximize profits for its shareholders.

Moral Minimum

A theory of social responsibility stating that a firm is to make a profit while avoiding causing harm to others.

Stakeholder Interest

A theory of social responsibility stating that a firm must recognize its actions have an effect on people other than just its shareholders.

Corporate Citizenship

A theory of social responsibility stating that a firm has an obligation to do good for the community.

Public Benefit Corporations

A type of corporation that must pursue public benefits and specific social or environmental goals while considering the interests of stakeholders, not just shareholders, when making decisions.