Edward Freeman and Joseph Heath.docx

4 Pages
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Department
Philosophy
Course Code
Philosophy 2074F/G
Professor
Dean Proessel

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Description
Edward Freeman A Stakeholder Theory of the Modern CorporationFreeman Managing for StakeholdersHumanity argumentTo create value for stakeholders executives must understand that business is fully situated in the realm of humanity Businesses are human institutions populated by real live complex human beings Stakeholders have names and faces and children They are not mere placeholders for social roles As such matters of ethics are routine when one takes a managing for stakeholders approach p64Placeholders are people do if they lose their job they run the risk of not being able to support themselves nor their families This approach solves some of the problems of the dominant modelThe dominant model stockholder modeloManagerial capitalism with shareholders at the center springs from a separation between management and ownershipIncreasing shareholder value is thus paramount Executive incentive plans are tied to a companys stockIn other words it is a normative model with too many problems and exceptionsNot Consistent with basic ethicsSeparation fallacyX is a business decisionX is an ethical decisionThis is a mistake it is a fallacya mistake in reasoning A business decision cannot be separate from ethical decision There is no such thing as a pure business decisionTo separate business and ethical any act which you might consider a business decision can also be called as an ethical decision The open question argument supports the separation fallacyThe open question argument1If the decision is made for whom is value created or destroyed2Who is harmed and or benefited by this decision3Whose rights are enabled and whose values are realized by this decision4What kind of person will I become if we make the decisionWhat kind of person am I Can I live with such decision Can I let my kids be impacted by my decision Can I sleep at night That is what I stand for I want to set an example for the worldWhen you ask these four questions any business decisions you made will involve the Others and therefore becomes an ethical decisionNever take the humanity out of business BACK TO FREEMANThis is something that motivates Freemans paperPg 76 suggesting all contractures are all equalStakeholder modeloThe whole idea we actually have nexus of contractspursue equalityFreeman does not buy the privilege of shareholders ideaIntroduction paragraphs
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