Chapter 10 Critical Legal Questions Flashcards
(34 cards)
What are ethics- definition?
a system of moral principles, quality, or practice
What do ethics study?
what is right and good for humans
What do ethics deal with?
moral duty
What 3 platitudes express a statement of the idea that “good ethics makes good business?”
(1) unethical companies rarely prosper
(2) honesty is best policy
(3) there can be substantial consequences to misbehaving as a corporation or individual
Which makes more money- bad businesses or good businesses?
good business
What 2 things are wrong with the assertion that “good ethics make good business”?
(1) it often isn’t true
(2) it has nothing to do with ethics
What are 5 consequences of the idea that “unethical behavior breeds cynicism”?
(1) we don’t trust the person who behaved badly
(2) lies weaken our confidence in other people besides the liar
(3) every act of shirking affects the whole group
(4) influence of a bad example lowers the morale of an entire community
(5) when a community gets a reputation for being unethical, other people don’t want to do business with them.
If people behave differently than they know to be “right” what is it psychologists say they would be prone to suffer?
Cognitive Dissonance
What is Cognitive Dissonance
people behaving differently than they know to be “right”
What does the maintenance of high ethical standards measure?
our sympath with our fellow humsn, an affirmation that we exist here to serve more than ourselves, that there is a larger purpose than us
Who is Milton Freidman?
famous economist for the University of Chicago
What does Milton Freidman equate with economic freedom?
political freedom
What does Friedman think is a “fundamental misconception of the character of a free economy?”
corporate officials and labor leaders have a “social responsibility” that goes beyond serving the interest of their stockholders or their members
What does Freidman state is the “one and only social responsibility of business”?
use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game
What is the “nub” of Friedman’s assertion?
the responsibility of businesses is to make as much money for their stockholders as possible as long as it’s legal
What objection is there to Friedman’s idea?
it has been tried and found that people want a government interaction
What is the problem with the assertion that “the business of business is money?”
it ignores other aspects of good business and focuses solely on making money
What 3 things does business affect?
(1) the economy
(2) the society
(3) the environment
What does failure to take all 3 affects of business lead to?
dislocations
When the goal of a business is to make as much money as possible, who is the main interested party?
shareholder
Who is it possible to recognize as an interested party when the goal of business is to make as much money as possible?
stakeholders
What does a company using the stakeholder model consider shareholders?
society, workers, customers, competitors
What type of profit do such companies seek to make?
satisfactory profit- profit in the short term
What are the 2 critiques of the Stakeholder Model from the political left?
it doesn’t go far enough, it doesn’t acknowledge many stockholders and fails to compel the business to honor those interests
