Lecture 4 Flashcards
(15 cards)
What is the only thing that matters according to the shareholder theory?
Respecting ownership and maximizing shareholder value.
Libertarian principle is connected to which justice principle?
Negative freedom.
What is the view of the Libertarian Principle on what companies can do?
Companies should be free to hire, promote, hire, in whatever way they want.
What is needed for the process to be fair based on the libertarian principle?
Based on the libertarian principle, for the process to be fair, it’s needed that all parties should be sufficiently informed and that all parties should be sufficiently independent from each other.
What is an arm-length transaction?
It is a deal between parties that are independent of one another.
What is a justice principle related to utilitarian principle?
Utility.
What is the view of the utilitarian principle on what companies can do?
Companies can hire, promote, or fire so as to maximize utility. In other words, in such a way that it maximizes the benefits to everyone affected.
What are the three different understandings of the utility?
Utility as a contribution to profitability of company.
Utility as a contribution to whatever aims company has.
Utility as a contribution to overall welfare in society.
Based on the utilitarian principle, who would be wrong to hire?
It would be unfair to hire, promote, or fire someone who creates less desirable consequences.
What is the Justice Principle that is connected to the Desertist Principle?
Desert.
What is the view of the Desertis principle on what companies should do?
Companies should hire, promote, give bonuses to whomever is most deserving.
What are the three bases of this desert that should be rewarded?
Talent, productive contribution, hard work.
One of the objections against the three principles related to the justice at work is related to the racist, sexist, or other morally problematic preferences. What does that objection say about each principle?
For the rebuttalian principle, it says that it is racist because the hiring committee can hire whoever they want and this can be unfair and discriminatory.
For the totalitarian principle, the hiring committee should take into account the race and preferences of customers as the goal is to maximize the overall utility, but this is also still unfair and discriminatory.
For the desertist principle, it deals better with the racist, but the preferences should not play a role. The most deserving candidates should win. Which is good, because then the race or preferences are not important, only the capabilities are.
Why is the desertist principle a bit better than the libertarian and utilitarian?
It’s because libertarian principle only looks at process, and utilitarian principle only looks at the outcomes, at the kind of the result, at whatever it maximizes the utility. So, both have a very instrumental view of employees, suppliers, consumers. And because of that, both can lead to huge inequalities in outcomes.
And what is the objection against the Desertist Principle?
Even after you agree on what counts as a merit, the Desertist Principle does not give a way to translate each degree of merit into the precise pay level.
