Week 1 Flashcards
(12 cards)
What is Business Ethics?
“The study of business situations, activities, and decisions where issues of right and wrong are addressed.” – Crane & Matten (2010)
Accoding to abeka and Owen, 2019 why do employees act ethically?
Employees act ethically because they:
o Want company success
o Value reputation
o Seek personal fulfilment
What it CSR according to Carroll (1991) and what are the 4 responsibilities?
Corporate Social Responsibility (CSR)
“Meeting economic, legal, ethical, and philanthropic demands of society.” – Carroll (1991)
Carroll’s 4 Responsibilities:
1. Economic – Be profitable
2. Legal – Follow laws
3. Ethical – Do what’s right
4. Philanthropic – Give back to society
What is the Shareholder theory? According the Friedman
According to Friedman:
“the corporation
should be managed in the best interests of
shareholders, which is maximizing their wealth.”
-Focus on maximising shareholder profit
-Only individuals (not corporations) have morals
-Social issues should be handled by the state
What are the arguments for and against the Shareholder theory?
Arguments FOR Shareholder Theory
* Deontological: Managers owe loyalty to shareholders.
* Consequentialist: Clear goals (profit) = better efficiency.
Criticisms:
-It ignores other stakeholders (e.g. employees, customers, suppliers, communities, the environment).
-Encourages short-term profit maximization at the expense of long-term sustainability.
What is the Stakeholder theory?
“Instead of
managing the firm in the best interests of shareholders
only, managers should seek to “balance” the interests of
all stakeholders, where a stakeholder is anyone who
has a “stake”, or interest, in the firm.”
Balance interests of all stakeholders
Corporation affects and owes responsibility to many
Employees, consumers, communities matter too
What are the arguments for and against the Stakeholder theory?
Arguments For Stakeholder Theory
* Consequentialist: Benefits more people (greater overall welfare).
* Deontological: Treats employees and others with dignity and rights.
Criticisms:
The theory doesn’t specify how to balance competing interests among stakeholders.
Stakeholder demands can conflict — e.g., increasing wages for employees might reduce returns to shareholders or raise prices for consumers.
Define “sustainability”.
“Meeting present needs without compromising future generations.” – Brundtland Report (1987).
What is the Triple Bottom Line?
The framework helps corporations to assess their progress towards sustainability
– measuring overall organizational success in social and environmental
performance, not only economic performance.
Triple Bottom Line (TBL) – John Elkington
1. People (Social) – Fair labour, community impact
2. Planet (Environmental) – Eco-friendly practices
3. Profit (Economic) – Financial health
What is responsible management?
It balances:
o Sustainability (TBL)
o CSR (Value to stakeholders)
o Ethics (Deciding right from wrong)
What are the Sustainable Development Goals (SDGs)?
17 goals created by the UN in 2015. Aim for a better, more sustainable world by 2030
Examples:
o No poverty
o Quality education
o Clean energy
Positives and criticisms of the SDGs?
Positives
* Global focus
* Supported by all UN countries
* Ambitious (e.g., ending poverty)
Criticisms
* Not legally binding
* Hard to assign responsibilities
* Some important issues (e.g., tax evasion) not addressed
* May reflect a neo-liberal pro-growth agenda
