Lecture 3 Flashcards
(22 cards)
What is a minimal market morality?
The minimal market morality is a set of moral rules that people agree should apply in the domains of the market.
What are the 4 different views on CSR?
Shareholder theory, stakeholder theory, corporate citizen approach, market failures approach.
Company responsibility can mean two things. What are those two things?
Company X is morally responsible for epsilon, equals X can and should be held accountable for epsilon.
Company X is morally responsible for epsilon, equals X has the duty to do epsilon.
What does CSR refer to?
The CSR refers to responsibilities that the companies have beyond the minimal market morality.
Based on the shareholder theory, what is the only responsibility of the companies?
The only responsibility the companies have is to maximize shareholder value within law and minimal market morality.
Shareholder theory is based on which ideas?
The shareholder theory is based on the idea of differentiation and the division of labor between markets and the states.
Differentiation also creates duties, political duties, that are part of the minimal market morality.
What are the three duties?
Companies should accurately inform states, companies should follow democratic rules, companies should limit lobbying for corporate interests.
What are the two arguments in support of the shareholder theory?
The first argument is that if the company should be focused on CSR that means that the corporate executives are going to spend someone else’s money on that. They’re going to spend the money from the shareholders and this is going to have an impact on the customers because then they will have to pay higher prices for the products and services and it will also have an effect on the employees. They’re going to have lower wages because of the increased cost of the CSR. So this means that the CSR is violating interests and freedoms of the shareholders but it is also impacting the interests of other parties such as the employees, consumers, and suppliers.
The second argument is that invisible hand argument that says that self-interest is exactly what makes markets run well and what is leading to the win-win situations and the economic growth. That this profiting-seeking behavior is exactly what ensures competition and that competition leads to the economic prosperity for everyone.
What are the objections of the shareholder theory?
Market‐failure objection
Value‐chain objection
Limits‐to‐differentiation objection
Responsibility‐gaps objection
Imperfect‐states objection
Industrial‐complexes objection
Harshness objection
Deontological objection
Explain market failure objection.
Profit maximization does not always lead to greatest good for everyone. Claiming all of the market’s upsides but none of its downsides is dishonest.
Explain value chain objection.
All parties involved in market transactions shall create benefits.
Explain limits to differentiation objection.
The state cannot be expected to solve all social problems and market failures on its own.
What are the reasons that the state cannot be expected to solve all social problems?
Overload of tasks, implementation problems, limits of law, complex problems, limits of state power, states legitimacy problems.
Explain responsibility gaps objection.
Strict division of labor will lead to responsibility gaps, with different parties pointing at each other, and as a result, problems are not going to be solved, they’re going to be present and growing.
Explain imperfect states objection.
When states are emerging, deteriorating, or failing, companies should strengthen instead of merely follow the rule of law.
Explain the industrial complexes objection.
Both states and companies have a duty to avoid becoming partners in crime, like corruption or fraud.
Explain the harshness objection.
It’s too harsh to claim that employees, consumers, neighbors only matter if they contribute to the profit maximization.
Explain the ontological objection.
The shareholder theory is going against the key values of human dignity. For example, what Immanuel Kant’s categorical imperative says that it is immoral to treat others merely as a means to an end.
Who counts as a stakeholder?
Ethically speaking, all affected parties should be included. Pragmatically speaking, some are more strategically important. Hybrid approach, some are more important in the longer run.
What are the objections to stakeholder theory?
Disagreement on who counts as a stakeholder.
Disagreement on how stakeholder interests should be weighted.
From a utilitarian perspective, current stakeholder theory still excludes relevant parties.
Based on the corporate citizen approach, the companies should protect the rights of citizens. What are the three types of rights?
Civil rights, such as the freedom of speech, voting, and right to a fair treatment.
Social rights, such as a right of access to education, shelter, and medical care.
Economic rights, right to property, right to fair distribution of available resources.
The three Pro-CSR approaches agreed on which duties?
Political duties, duty to rescue, duty to help.
