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PHIL 215: Business Ethics CHEAT SHEET.docx

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University of Waterloo
PHIL 215
Kurt Holukoff

Business ethics is the study of business situations, activities, and decisions where issues Corporate citizenship describes corporate function for governing citizenship rights for of right and wrong are addressed. individuals Equivocal: simply may not be a definitive ‘right’ answer to many business ethics Ethical theories are rules and principles that determine right and wrong for given problems situation. Morality is concerned with norms, values, and beliefs embedded in social processes Two extreme positions: which define right and wrong for an individual or a community.  Ethical absolutism – there are eternal, universally applicable moral principles. Right and wrong are OBJECTIVE qualities that can be rationally Ethics is concerned with study of morality and application of reason to elucidate specific determined rules and principles that determine right and wrong for a given situation. These rules  Ethical relativism – morality is context-dependent and SUBJECTIVE. No and principles are called ethical theories. universal right and wrongs that can be rationally determined Globalization: process which diminishes the necessity of common and shared territorial Pluralism – occupies something of middle ground between absolutism and relativism basis for social, economic, and political activities, processes, and relations  Individual vs institutional morality - Cultural issues  Questioning vs accepting capitalism - Legal issues  Justifying vs applying moral norms - Accountability issues Western Modernist Ethical Theories – absolutist in intention Sustainability is the long-term maintenance of systems according to environmental, economic, and social considerations. Consequentialist Theories – based on outcomes to decide right or wrong Corporate social responsibility (CSR) includes economic, legal, ethical, and Egoism – an action is morally right if decision-maker freely decides in order to pursue philanthropic expectations placed on organizations by society at given point in time. either their (short-term) desires or their (long-term) interests Economic Responsibility - Required Utilitarianism – an action is morally right if it results in greatest amount of good for Shareholders demand return on investment greatest amount of people affected by the action Employees want safe and paid jobs Main problems: Customers demand good quality products at fair price Subjectivity Legal Responsibility – Required Problems of quantification Demands businesses abide by law Distribution of utility Law is codification of society’s moral views Act utilitarianism Ethical Responsibility – Expected Looks to single actions and bases moral judgment on amount of pleasure/pain caused Oblige corporations to do what is right, even when they are not compelled to by law Rule utilitarianism If underlying principles of action produce more pleasure than pain for society in long run Philanthropic Responsibility – Desired Love of the fellow human Non-Consequentialist Theories – based on motivation/principles Corporation’s discretion to improve quality of life of employees, communities, society Ethics of Duties Ethics of Rights and Justice Corporate social responsiveness refers to capacity of a corporation to respond to social pressure. Feminist ethics is an approach that prioritizes empathy, harmonious and healthy social relationships, care for one another, and avoidance of harm above abstract principles. Four Strategies of Social Responsiveness: 1. Reaction – corporation denies any responsibility for social issues Egoism: one’s own interests (Is it really in my, or my organization’s, best long-term 2. Defense – corporation admits responsibility, but fights it interest? Acceptable to think only consequences to myself in this situation?) 3. Accommodation – accepts responsibility and does what is demanded Utilitarianism: social consequences (If I consider all possible consequences for my 4. Pro-Action – seeks to go beyond industry norms and anticipates future actions, for everyone affected, will we be better or worse off overall?) expectations Ethics of Duty: duties to others (Who do I have obligations to in this situation? What would happen if everybody acted in the same way as me?) Outcomes of CSR: Corporate Social Performance Ethics of Rights: entitlements of others (Whose rights do I need to consider here?)  Social Policies – policies stating company’s values, beliefs, and goals with Theories of Justice: fairness (Am I treating everyone fairly? Have processes been set up regard to social environment to allow everyone an equal chance?)  Social Programs – programs of activities, measures, and instruments Virtue Ethics: moral character (Am I acting with integrity?) implemented to achieve social policies Feminist Ethics: care for others and relationships (How do the other affected parties feel  Social Impacts – traced by looking at concrete changes the corporation has in this situation? Can I avoid doing harm to others?) achieved through programs implemented in any period Discourse Ethics: process of resolving conflicts (What norms can we work out together to provide mutually acceptable solution to problem?) A stakeholder of a corporation is an individual or a group which either: is harmed by, or Postmodern Ethics: moral impulse and emotions (Am I just simply going along with benefits from, the corporation OR whose rights can be violated, or have to be respected, usual practice, or slavishly following organization’s code, without questioning whether it by the corporation. really feels right to me?) Three forms of stakeholder theory: Stages in ethical decision-making:  Normative Stakeholder Theory – provide reason why corporations should 1. Recognize moral issue take into account stakeholder interests 2. Make some kind of moral judgment on issue  Descriptive Stakeholder Theory – ascertain whether corporations actually 3. Establish intention to act on judgment do take into account stakeholder interests 4. Act according to intentions  Instrumental Stakeholder Theory – answer the question whether it is beneficial for the corporation to take into account stakeholder interests Influences on ethical decision-making: - Individual factors (age, gender, culture, education, employ, Corporate Accountability – whether a corporation is answerable in some way for the psychological, values, integrity, moral imagination) consequences of its actions - Situational factors Two reasons for privatization: Cognitive moral development: different levels of reasoning that individual apply to  Governmental failure issues  Increasing power and influence of corporations Level One. Concerned with self-interest Level Two. Does what is expected by others. Transparency is the degree to which corporate decisions, policies, activities, and Level Three. Decision-making based on principles of rights and justice. impacts are acknowledged and made visible to relevant stakeholders. Locus of Control – determines extent to which he/she believes that they have control Corporate Citizenship:
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