unit 3-4 300

What is Objectivism and who developed it?

Objectivism is a philosophy developed by Ayn Rand, emphasizing rational self-interest and capitalism.

Objectivism is the antithesis of…

ethic of care

What is the decision rule of Objectivism?

to be rational and all you can be

What are the pros and cons of objectivism:

• Pro: reinforces personal responsibility

  • Each individual had to use our productive energy to be responsible for the pros and cons in our lives and be the best we possibly can 

• Con: individualistic and judgmental 

  • Want people to be more community-oriented

What is the main focus of Integrative Social Contracts Theory?

The main focus is that actions should not violate a global hypernorm or local authentic norm.

What are the two key hypernorms in Integrative Social Contracts Theory?

Respect the dignity of all human beings and respect human rights.

What are the pros and cons of Integrative Social Contracts Theory?

• Pro: adapts to variations in local norms within some global limits

• Con: local norms are vague and may give actors too much flexibility

  • Individual norms can get tricky when they clash with local norms 

What is the main principle behind the Ethic of Care?

The Ethic of Care emphasizes focusing on relationships and responsibilities.

What are the pros and cons of ethic of care?

• Pro: protects the weak and dependent

• Con: neglects justice

What theory is related to ethic of care?

Nozick’s rights theory → if you have a right from force and fraud, that means everyone around you has a responsibility not to use force or fraud on you 

What defines a corporation?

A corporation is a legal entity chartered by the state with rights and responsibilities separate from the individuals running it.

What are the two perspectives on corporate responsibilities?

The two perspectives are Shareholder Value, which focuses on maximizing profits, and Stakeholder Theory, which considers the interests of all stakeholders.

What is the difference between Instrumental and Normative CSR?

Instrumental CSR aims to maximize profits while engaging in social responsibility; Normative CSR emphasizes ethical responsibility even at the expense of profits.

What are stakeholders in corporate context?

Stakeholders are entities significantly affected by the firm's activity, including employees, customers, shareholders, and the community.

What does the Power Argument state regarding corporations?

The Power Argument holds that a corporation's purpose is to use its resources to advance the interests of those most affected by its activities.

What is CSR?

Corporate Social Responsibility (CSR) is the commitment to actions beyond maximizing profits while adhering to legal and moral standards.

What is a whistleblower?

A whistleblower is someone who reports unethical or illegal activities within an organization.

What should you do first when deciding to blow the whistle?

Make a memo outlining your concerns to give to your boss.

What is the key distinction regarding a corporation's responsibilities towards externalities?

Corporations should not only repair their own externalities but may also advance the common good.

What are arguments against normative CSR?

• Violates owners’ property rights → CEO is using other people’s money without consent

• Presumes that managers have better moral skills than shareholders

• Weakens management’s accountability to shareholders

• Distracts management from its primary purpose 

What is stakeholder theory?

advancing the interests of all stakeholders (even at the expense of profit)

What are the ethical justifications to stakeholder theory?

1. Powerful corporations can help alleviate global inequalities

2. Stakeholder approach leads to greater liberty for the vulnerable

3. Capitalism will only be efficient if the masses buy into it

4. Shareholders don’t do the real “work.”

5. Consider non-Western values: economic actors should pursue what is efficient 

   • Shareholders should be happy with a satisfactory level of shareholder value instead of maximized shareholder value 

What is the power argument (ethical justification)?

• With great power comes great responsibility 

  • “Can, imply, should”

• The limited capacities of gov and the power and influence of corporations require that the corporations address these social problems 

Name evidence of CSR popularity.

• Socially responsible investing

• CSR-related shareholder proposals

• Nongovernmental orgs

• Benefit corporations: special legal status for for-profit business that includes social responsibility in their core mission 

What are the two kinds of gov intervention?

limited and significant

What is the top-down process of gov limited intervention?

international orgs specify norms endorsed by executives

What is the bottom-up process of limited gov intervention?

CSR as a legal mandate

What is a key distinction between Instrumental CSR and Normative CSR?

Cleaning up after yourself (instrumental) or going beyond and cleaning up other messes that may not be related to your business (normative)

What is the impact of normative CSR?

1. Shareholders’ expectations are undermined, and owners of record at announcement pay for entire CSR redirection

2. startup → investors purchase IPO w/ full knowledge of the potential for a lower market price (ex: Ben and Jerry’s)

What are arguments for shareholder value?

• Legal argument: corporations are obligated to maximize shareholder value 

• Economic imperative

  • it’s fundamental to the economy that corporations do this

• Ethical justifications

  • Efficiency- resources pulled to their most valued uses

    • Investors will go to companies that have what they want and will invest more if corporations do what the market wants 

  • Liberty- individuals are free to participate or not 

    • People are free to buy things from a corporation, and they’re also free to not do that 

What are some challenges to shareholder value?

• Difficult to rely on self-interested businesspeople to act on others’ behalf (including shareholders); market mechanisms are required to rein them in

• Shareholder value proponents think that corporate responsibility lies in devising effective corporate governance mechanisms to protect the long-term interests of shareholders 

What is virtue ethics and who developed it?

Virtue ethics is the idea that ethics is about having virtue (having good character). Developed by Aristotle

What is ethical egoism in relation to objectivism?

a maximizing or perfectionist concept about what is good for you: maximize the good of the self that you have