Business Law Chapter 2 2
Terms
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- Ethics
- Study of what is right or good for human beings
- Business Ethics
- Study of what is right and good in a business setting;includes the moral issues that arise from business practices, institutions, and decision making
- Ethical Fundamentalism
- Individuals look to a central authority or set of rules to guide them in ethical decision making
- Ethical Relativism
- Actions must be judged by what individuals subjectively feel is right or wrong for themselves
- Situational Ethics
- Judging a person's actions by first putting oneself in the actor's situation
- Utilitarianism
- Moral actions are those that produce the greatest net pleasure compared to net pain
- Act Utilitarianism
- Each separate act must be assessed according to whether it minimizes pleasure over pain
- Rule Utilitarianism
- Supports rules that on balance produce greatest good
- Cost-Benefit Analysis
- Quantifies in monetary terms the benefits and costs of alternatives
- Deontology
- Holds that actions must be judged by their motives and means as well as their results
- Social Ethical Theories
- Focus on a person's obligations to other members in society and on the individual's rights and obligations
- Social Egalitarians
- Believe that society should provide all members with equal amounts of goods and services irrespective of their relative contributions
- Distributive Justice
- Stresses equality of opportunity rather than of results
- Libertarians
- Stress market outcomes as the basis for distributing society's rewards
- Intuitionism
- A rational person possesses inherent powers to assess the correctness of actions
- Good Person Philosophy
- Holds that individuals seek out and emulate good role models
- Kohlberg's Stages of Moral Development
- Emphasis on self, then emphasis on group, then emphasis on universe as a whole
- Corporations as Moral Agents
- Because a corporation is a statutory entity, it is difficult to resolve whether it should be morally accountable
- Regulation of Business
- Governmental regulation is necessary because all the conditions for perfect competition have not been satisfied and free competition cannot by itself achieve other social goals
- Corporate Governance
- Vast amounts of wealth and power have become concentrated in a small number of corporations which are in turn controlled by a small group of people and it is argued that they therefore have a responsibility to undertake projects to benefit society
- Profitability
- The business of business should be to return as much money as possible to shareholders
- Unfairness
- Whenever corporations engage in social activities they divert funds rightfully belonging to shareholders and/or employees
- Accountability
- A corporation is subject to less public accountablity than public bodies
- Expertise
- Although a corporation may have a high level or expertise in selling its goods and services there is absolutely no guarantee that any promotion of social activities will be carried on with the same degree of competence
- The Social Contract
- Because society allows for the creation of corporations and gives them special rights, including a grant of limited liability, corporations owe a responsibility to society
- Stakeholder Model
- Corporations have fiduciary duty to all of their stakeholders, not just their stockholders
- Less Government Regulation
- By taking a more proactive role in addressing society's problems, corporations create a climate of trust and respect that has the effect of reducing government regulation
- Long-Run Profits
- Corporate involvement in social causes creates goodwill, which simply makes good business sense