business ethics exam #1

Compliance vs ethics 

Compliance focuses on adhering to mandatory, external rules, laws, and regulations to avoid penalties. Conversely, ethics involves following internal principles of right and wrong, guiding behavior based on values like integrity

seperation thesis

The separation thesis is the assumption that economics and ethics are entirely separate

problems with separation thesis

all interactions require ethics, and values are an explicit part of doing business. 

Ethical relativism

holds that ethical values and judgments are ultimately dependent on, or relative to, one’s culture, society, or personal feelings. Relativism therefore denies that we can make rational or objective ethical judgments. The view holds that ethics is just a matter of personal judgement.

Cultural relativism

 A factual claim about cultures holding that, in fact, the values and ethos of cultures differ. To be distinguished from ethical relativism which holds, often on the basis of cultural relativism, that there is no way to make cross-cultural ethical judgments.

Realism

tehical truths exist independently of subjective opinions and that business actions should be guided by these objective moral realities, not just profit or compliance

Utilitarianism

To determine right and wrong, focus on the consequences. Maximize the good for the most people

Act Utilitarianism

evaluates the morality of each individual action based on whether it produces the greatest overall good

Rule utilitarianism

judges actions based on whether they adhere to rules that, if consistently followed, maximize happiness

Duty-based approaches

Always treat people as an end in themselves and never as mean to your own ends. Businesses should follow moral principles, individuals should have certain rights, and autonomy (the ability to make free and informed decisions). There are commands we owe other rational agents.

Categorical Imperative (Kant)

Act only on the maxim through which you can at the same time will that it should be universal law

Virtue ethics

Focuses on the character of the person or organization

problems with individual relativism

Holds that each opinion is equally valid, confusing the fact that there is wide disagreement about values, with the conclusion that no agreement is possible

problems with cultural relativism

Just because it is within a culture doesn't make it okay- child labor, Denies the idea of moral progress, Does not explain moral disagreement within a culture

problems with Utilitarianism

consequences are in the future so we may not be able to predict, acts can go from good to bad, seems to allow for some bad to benefit greater good

The Economic Model 

The role of a company is to make as much money as possible while complying with the law. This benefits everyone as more money equals paying workers more, not increasing price for consumers, etc

The Moral minimum Model

Make as much money as possible while complying with the law and not causing harm. Aka dont exploit workers or consumers. 

The Stakeholder Model  

Companies have obligations to all entities that have a stake in the business; employee, investors, suppliers, customers, community

Friedman’s View (as presented in The Social Responsibility of Business is to Increase Profits)

• Executives have a duty to act for shareholders desires not social desires

• Acting on social desires would be to tax all stakeholders

• Antisocialist

• Businesses cant have responsibility only people can- there is no such thing as corporate social responsibility

• A corporate executive is an employee of the owners and stockholders of the business so their responsibilities are to maximize profits. Personal responsibility can be handled in their own time with their own money, they weren't hired to solve social problems

criticism of Friedman’s position

• Characterized the corporate executive as the lone ranger that does everything

• Stockholders know what the business is trying to accomplish socially and economically through the mission statement before they invest

• Companies have responsibilities to stakeholders not just shareholders

How might Friedman overcome these criticisms

law should regulate whats right and whats wrong for the social good, people are subject to exploitation if they decide to work or consume from a company

problems with the moral minimum

hard to distinguish causing no harm from neglecting to prevent harm- if you don't have certain policies in place to prevent harm it may not technically be your fault,  do no harm can be a loose term, lying to customers isnt “technically harm”

problems with Stakeholder model

hard to get stakeholders on the same page, employees want more pay, shareholders want more return on investment

problems with Economic model

can exploit workers and stakeholders