B A 300 Austin Exam 2

Objectivism

- A theory that pushes American values to the limit

- Values capitalism

- Free markets

- Be rational, think hard, don't let emotions cloud your decisions, and be all you can be

Integrative Social Contracts Theory

DONALDSON AND DUNPHY

Action does not violate the global hypernorm or local authentic norm

Ethic of Care

-It is moral to focus on ALL relationships and responsibilities

*Every right has a corresponding responsibility*

Rationality

Americans tend to be sloppy so we need to be rational

Man qua Man

Be the best you can be

Global Hypernorms

**RULES THAT WE FOLLOW ALL AROUND THE WORLD**

-Respect dignity of all human beings

-Respect human rights

Authentic Norms

**care about what's going on in the local economy**

- Make sure that the people in the local area approve of your behavior

- Think about whether or not they would disapprove of your behavior

-Almost everyone there does it

Objectivism Pro

- Reinforces personal responsibility

- Worry about the least fortuante

Objectivism Con

Both individualistic and judgemental (too self centered)

Objectivism Example

MOTIVE COMMUNOCATION

- Small company

-Competitive people

-Independent people

-Deontology

-Judgmental and rational

- Sensible

Integrative Social Contracts Theory PRO

Adapts to variations in local norms within some global limits

Integrative Social Contracts Theory CON

Local norms are vague and may give actors too much flexibility

Integrative Social Contracts Theory Example

Levis Strauss hiring underage workers in Bangladesh

Ethic of Care PRO

Protects the weak and dependent

Ethic of Care CONS

-Neglects justice

-Enabling bad behavior

Ethic of Care EXAMPLE

Certain small, entrepreneurial businesses able to adopt unusual circumstances

Corporate Responsibility

Only a corporate issue

Corporations

Legal structure charted by the state with rights and responsibilities apart from the persons running or working for the corporation

Separation of Owner and Control

-When you have shareholders as well as control over the company as a whole

-You don't have the same level of power due to shareholders

Shareholder's Rights vs Managerial Discretion

Shareholders have legal rights to control what managers of corporations are doing however managers have control over what they do with the shareholders money

Rights and Responsibilities of a Corporation

Shareholder Value

Stakeholder Theory

Shareholder Value

Maximize profits within the law is the purpose of the corporation( and morality)

Stakeholder Theory

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

Shareholders Ownership

Investors put in money hoping to make the most profit possible while following the law and ethics. In return, they take on the risk of whatever is left after the company pays its bills.

Shareholder Value Perspective

Maximize profits within the law (and morality)

Arguments for Shareholder Value

- Legal Argument

- Economic Imperative

-Ethical justifications

Legal Argument

Companies agree to make money for their shareholders

Economic Imperative

Maximize profits and stay successful you need to focus on making money, or it won't last, and everyone will lose out.

Ethical Justifications

It's the right thing to do — if someone invests in something, you should try your best to make it work and succeed.

Efficiency

the property of society getting the most it can from its scarce resources

Liberty

Individuals are free to participate or not

Challenges within Shareholders Value

-People who care only about their own benefits and might make choices that hurt the company in the long run

-Responsibility lies within planning effective corporate governance to protect long-term interests of shareholders

Corporate Social Responsibility

Focus on making as much money as possible but also think about doing good things for people, the environment, and society

Instrumental/Strategic

If we do good things for others, it can also help our business make more money in the long run.

Normative

How corporations should engage in CSR programs because it's the right or moral thing to do even at the expense of profits

Arguments Against Normative CSR

•Violates owners' property rights

•Presumes that managers have better moral skills than shareholders

•Weakens management's accountability to shareholders

•Distracts management from its primary purpose

Violates owners' property rights

CEO using money for something other than its intended purpose

Presumes that managers have better moral skills than shareholders

Managers donating to a charity even tough you would rather support a different one

Weakens management's accountability to shareholders

CEOs performance can be measured to see if they are being an appropriate shareholder

Distracts management from its primary purpose

Executive team is put in place because they are good executives(making a successful company

Impact of Normative CSR

-Shareholders wanted the company to focus on making money, not just doing good things -Reduce the profits -Shareholders have to pay for the entire CSR redirection — meaning they lose some of their expected money

Startup of CSR

Investors purchase IPO shares with full knowledge of potential for lower market price

Stakeholders

EVERYONE that is significantly affected by the firm's activity

**Employees, customers, shareholders, the community or broader society, the environment, and suppliers**

Power Argument

-Powerful corporations have a lot of money and can help make the world a better place by helping those in need

-They can do things that governments can't always do

(If you CAN do something you SHOULD do something)

Stakeholder Approach

-The company thinks about everyone who is affected by its actions. -Help protect the people who are weakest or most at risk

Ethical Justification

Capitalism will only be efficient if the masses buy into it

(you have to have cooperation from customers)

Consider Non-Western Values

Economic actors should pursue what is sufficient

Key CSR Distinction

-Repair externalities/ do no harm

-Advance the common good, whether or not it's directly related to their core business

Evidence of CSR Popularity

•Socially responsible investing

•CSR-related shareholder proposals

•Nongovernmental organizations

•Benefit corporations

Benefit Corporations

Special legal status for for-profit businesses that include social responsibility in their core mission

Limited Government Intervention

Top Down Process

Bottom Up Process

Significant Intervention

Top down process:

the big bosses at the top of an organization make important rules or decisions, and then everyone else has to follow those rules.

Bottom Up Process

when regular people (like consumers or workers) influence the decisions made by companies or leaders.

Significant Intervention

someone in charge steps in to make sure that important rules or laws are followed

Whistleblowing

the act of an employee exposing an employer's wrongdoing to outsiders

Whistleblowing Triggers

-Truth

-Employee or customer rights

-Trust

-Harm (physical/psychological)

-Your personal reputation

-Your organization's reputation

-Breaking the law

Precursor to Whistleblowing

- Dealing with a serious issue?

-Assembled the facts?

-Checked to be sure facts are accurate?

-Asked peers or manager for advice?

-See a law or policy about to be violated?

7 Steps of Whistleblowing

1. Approach your immediate manager first

2. Discuss the issue with your family

3. Take it to the next level (your boss' boss)

4. Contact your company's ethics officer(hotline)

5. Consider going outside your chain of command

6. Go outside the company

7. Leave the company

Codetermination Laws

Require companies to include workers in decision-making...the people who work at the company get a say in what happens in the business

Pragmatic

Use power responsibly

Ethical

Having to do with morals, values, right and wrong

Strategic

related to long-term plans for achieving a goal

Triple Bottom Line

people, planet, profit

Social, environmental, financial