Framing & Evaluating Business Ethics – Key Vocabulary

Vocabulary flashcards summarizing foundational terms, theories, and real-world examples from Chapters 2 and 3 on corporate responsibility and normative ethics.

Corporation

A legal entity separate from its owners that can own assets, incur debts, and enter contracts.

Milton Friedman's Profit Doctrine

The view that a business’s only social responsibility is to increase its profits (Friedman, 1970).

Corporate Social Responsibility (CSR)

A company’s responsibility to operate ethically and benefit society beyond profit-making.

Carroll’s CSR Pyramid

Framework outlining four CSR levels: economic, legal, ethical, and philanthropic responsibilities.

Economic Responsibility

The duty to be profitable so the business can survive and grow.

Legal Responsibility

The obligation to obey laws and regulations in all operations.

Ethical Responsibility

The expectation to do what is right even when not legally required.

Philanthropic Responsibility

Voluntary actions that give back to society through charity or community support.

CSR Criticism

The argument that firms use CSR mainly as a reputation-boosting marketing strategy.

Stakeholder Theory

Concept that a firm should consider the interests of all stakeholders, not only shareholders.

Stakeholder (Internal)

Individuals inside the firm—employees, managers, and owners—affected by business actions.

Stakeholder (External)

Parties outside the firm—customers, suppliers, governments, communities, environment—affected by business actions.

Stakeholder Theory Criticism

Difficulty in balancing conflicting stakeholder interests, e.g., wages vs. profits.

Corporate Citizenship

The idea that companies act like citizens, respecting laws and contributing to social welfare and global issues.

Corporate Political Actor

Role of a company when its decisions (e.g., on privacy or climate) influence public policy and rights.

Corporate Accountability

Requirement that firms be answerable for the social and environmental impacts of their actions.

Transparency

Openly sharing accurate information with stakeholders about corporate activities and impacts.

Normative Ethical Theory

A framework that prescribes how people ought to act to be morally right in business contexts.

Egoism

Ethical view that actions are right when they maximize self-interest, such as profit or career gains.

Ethics of Duty (Kantian Ethics)

Theory emphasizing universal moral laws and respect for human dignity, treating people as ends not means.

Categorical Imperative

Kant’s test asking whether an action could be universalized and whether it respects persons as ends.

Utilitarianism

Ethical theory holding that the best action creates the greatest good for the greatest number.

Greatest Happiness Principle

Core utilitarian idea of maximizing overall happiness and minimizing harm.

Categorical imperative analisis

Two-step process: list positive/negative consequences and choose the option that maximizes net happiness.

Human Rights Approach

Ethical stance that businesses must respect, protect, and remedy fundamental human rights.

UN Guiding Principles on Business and Human Rights

2011 framework instructing firms to identify, prevent, and disclose human-rights risks and impacts.