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MGMT 1040 Chapter Notes -Pareto Efficiency, Distributive Justice

Course Code
MGMT 1040
William(bill) Woof

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Ethics of Management
Chapter 1- The Nature of Moral Problems in Management
Three premises/requirements for resolving moral issues related to firms:
1. Recognize that moral problems in business are complex and difficult to
Moral issues in business usually involve individuals, groups etc who
are going to be hurt/harmed while others will be benefited
Some will have their rights ignored/denied while others will have
their rights recognized
This mixture of problems makes it difficult for managers to decide
upon the correct course of action
2. Understand that business managers can’t rely upon their moral standards
of behaviour or intuitive feelings when faced with a moral issue
Individuals/groups in a global economy come from different cultural
and religious traditions and live in different economic/social
situations. Thus, their moral standards of behaviour differ
3. Accept that it is not enough for a manager to simply reach a decision
based on what they believe is right/wrong and proper balance of benefits in
any situation
Managers have to go further and convincingly explain why that
balance should be viewed as best
A convincing explanation requires objective methods of analysis
which include:
oEconomic outcomes based on impersonal market forces
oLegal requirements based on impartial social and political
oEthical duties based upon universal ethical principles
This logical process starts by listing harms, benefits and rights
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Process is continued onto the tripartite economic, legal and ethical
Understanding the Different Standards
Most people when faced with a moral issue turn to their moral standards of
oMoral Standards of Behaviour: our intuitive gauges for decisions
and actions
The problem is that our moral standards of behaviour are subjective.
They are personal
Such an understanding is not acceptable when we are faced with a major
moral problem such as lying to substantial numbers of stockholders in a
company, or even to larger numbers of the customers of that firm
Moral standards of behaviour differ between people because goals, norms,
beliefs and values upon which they depend also differ
Personal Goals: our expectations of outcomes or the things we want out
of life and the things we expect others will probably want out of life as well
(material possessions, personal goods, social aims etc.)
Personal Norms: our expectations of behaviour. They are the ways we
expect to act and the ways in which we expect others to act in given
Personal Beliefs: our expectations of thought. They are the ways we
expect to think and the ways in which we expect others to think about
given situations
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