...Distinguish between consequentialist and non-consequentialist ethical perspectives and discuss their application in a business context. Andrew Brady 10358293 Ethics can be defined as distinguishing and choosing between right and wrong (Oxford English Dictionary) and is a central part of what makes us human. It is, however, not as simple as it would first appear. The idea of ethics has long been the topic of discussion for philosophers and there are many differing views on the issue ranging from utilitarianism to virtue ethics. Despite this multitude of views certain grounds are agreed upon with regards to ethics: * The possibility of free will. * The focus on an individual’s relationship with others. * Some form of individual responsibility. (O’Regan, A; 2012) Morality and ethics are the fabrics with which our society is sewn. Society, its laws, social order and ethics are all interlinked. One of the main goals of society is to create harmony among its people and as such morality plays a huge role (Anon; 2007). Without these moral principles humans would act on mere base instinct with little regard for consequence, be they positive or negative. With this in mind it can be said that ethics and morality arise when we are no longer bound by the rules and laws of our society and as such must look within ourselves to decide what is right or wrong (Anon; 2007). As I have already said ethics is seen as an entirely human concept and is often seen as a social construct...
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...Freeman vs. Friedman In their theories of how a business should operate, R. Edward Freeman and Milton Friedman hold virtually opposite beliefs as to what businesses’ responsibilities should be. In favor of the Stakeholder theory, Freeman believes that any person or organization that has a “stake” in the business should also play a role of participation in the business’s actions and decisions. In the other corner of the ring stands Milton Friedman, who holds the belief that said business is only responsible for those that actually own stock in the business – the owners, or stockholders. A strong believer in his reconceptualized Stakeholder Theory of the Modern Corporation, R. Edward Freeman believes the key to success in business is several stakeholders working together in a sort of interconnected “corporate system”. Freeman begins his argument by raising a simple question: For whose benefit and at whose expense should the firm be managed? To answer this question, Freeman attempts to explain why managerial capitalism no longer works. He notes, “The basic idea of managerial capitalism is that in return for controlling the firm, management vigorously pursues the interest of the stockholders” (Freeman, 38). Freeman begins to attack this idea of managerial capitalism with several arguments pertaining to why this form of capitalism no longer can work. He argues that corporations act with limited liability for their actions and remain seemingly immortal since the existence...
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...Attributes: * Shareholders are primarily concerned with the company’s bottom line. * In a traditional business models, shareholders have the primary influence on the company’s strategy, usually resulting in business model with the foremost objective to increase the company’s stock value. In a shareholder business model, a company only addresses the needs and concerns of four parties: investors, employees, suppliers, and customers; with investors and customers receiving the most attention. Stakeholder approach: To make an analogy, stakeholder and shareholders are like sparkling white wine and champagne. All champagne is sparkling white wine, but not all sparkling white wine is champagne. Similarly, all shareholders are stakeholders, but not all stakeholders are shareholders. A stakeholder is anyone that can be affected by a company’s actions, objectives, and policies. This includes both internal stakeholders, such as employees and managers, and external stakeholders, such as shareholders, suppliers, customers, surrounding communities, creditors, the government, to name a few. The term’s common use came about only after R. Edward Freeman published...
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...mainly funded by legacies and wills, accounting 40% of their income, the rest is made up of other voluntary income coming in at 31%, profits from the retail division at 23% and investment income at a low 5%. But then again, it is a not profit but for research in order to pioneer research into the causes of heart disease and methods of prevention and treatment. And yes, they have shops too. The British Heart Foundation runs a large chain of charity shops throughout England, Wales and Scotland. As of 2013, they run over 700 shops and around 20,000 staffed volunteers. Nowhere close to Tesco, but it has become one of the biggest charity organisations in Europe considering it’s voluntary. Of course none of these would be possible without the stakeholders of the...
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...obligation. And business is activities of buying and selling, or in another word, social dealings between hundreds of thousands people all around the world. So my understanding of the term “responsible business” is that companies and firms should build their businesses with the consideration of morality and values rather than only aim to maximize their profits, which means companies and firms should build a socially acceptable business that not only according to shareholders’ wants but also have good influences for society and the environment of our planet. Knight (2015) discussed there are two points of views as in shareholder and stakeholder. Docstos (2009) post details about these two theories that stakeholder theory is businesses have corporate social responsibilities with respect to employees, customers and society at large while Shareholder Theory is businesses have only one obligation, which is to maximize profit for shareholders. Enron, a good example that if a company doesn’t rely on a responsible business-even it’s huge once-it cannot evade nose-dive and crash (Shaw et al. 2013, p3). Founded in 1980s, Enron only took a short period of...
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...UI400 Philosophy Paper Methodology. The method of argumentation and (sometimes) proof used in philosophy is derived from and is essentially a refinement of the so-called Socratic Method, also known as Platonic dialectic (derived from Plato’s dialogues & refined over the centuries). It consists not merely in reporting on what others have said or argued, but in examining their claims to test them for validity, truth, soundness, and reliability of generalization and so on. It involves deductive methods, reductio ad absurdum or the selective application of relevant counterexamples, analogical and inductive procedures. It requires the examination of ideas, reasons, arguments and experience, and evidence drawn from various sources. It even involves experimental reasoning in the form of thought experiments. The overall format is that of the hypothetical-deductive method of developing a thesis by proposing a hypothesis, deducing the consequences that logically follow from that hypothesis and then testing them against other well-established beliefs, experience, data, and the results of the analyses and interpretations of a thesis by other scholars (secondary sources). Below follows a brief outline of some key steps to follow in executing a genuine philosophical analysis of a thesis and it argument(s). First a flow chart: 1. Thesis statement – a brief statement of the problem, why you think it’s a problem, & how you plan to approach it (these elements...
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...BUSINESS ETHICS AND STAKEHOLDER ANALYSIS Kenneth E. Goodpaster Abstract: Much has been written about stakeholder analysis as a process by which to introduce ethical values into management decision-making. This paper takes a critical look at the assumptions behind this idea, in an effort to understand better the meaning of ethica] management decisions. A distinction is made between stakeholder analysis and stakeholder synthesis. The two most natural kinds of stakeholder synthesis are then defined and discussed: strategic and multi-fiduciary. Paradoxically, the former appears to yield business without ethics and the latter appears to yield ethics without business. The paper concludes by suggesting that a third approach to stakeholder thinking needs to be developed, one that avoids the paradox just men* tioned and that clarifies for managers (and directors) the legitimate role of ethical considerations in decision-making. So we must think through what management should be accountable for; and how and through whom its accountability can be discharged. The stockholders' interest, both short- and long-term, is one of the areas. But it is only one. Peter Dnicker, 1988 Harvard Business Review W HAT is ethically responsible management? How can a corporation, given its economic mission, be managed with appropriate attention to ethical concerns? These are central questions in the field of business ethics. One approach to answering such questions that has become popular during...
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...The Boundaries of Strategic Corporate Social Responsibility Geoffrey P. Lantos Professor of Business Administration Box D-55 Stonehill College North Easton, MA 02357 June 2001 Phone: 508.565.1205 Fax: 508.565.1444 E-mail: glantos@stonehill.edu 1 The Boundaries of Strategic Corporate Social Responsibility Keywords Corporate social responsibility (CSR), Roles of business, Stakeholder theory, Ethical CSR, Responsibilities and duties, Altruistic CSR, Strategic CSR, Abstract Reviews the development of the corporate social responsibility (CSR) concept and its four components: economic, legal, ethical, and altruistic duties. Discusses different perspectives on the proper role of business in society, from profit making to community service provider. Suggests that much of the confusion and controversy over CSR stem from a failure to distinguish its ethical, altruistic, and strategic forms of CSR. On the basis of a thorough examination of the arguments for and against altruistic CSR, concurs with Milton Friedman that altruistic CSR is not a legitimate role of business. Proposes that ethical CSR, grounded in the concept of ethical duties and responsibilities, is mandatory. Concludes that strategic CSR is good for business and society. Advises that marketing take a lead role in strategic CSR activities. Notes difficulties in CSR practice and offers suggestions for marketers in planning for strategic CSR and academic researchers in further clarifying the boundaries of...
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...MANAGING FOR STAKEHOLDERS: TRADE-OFFS OR VALUE CREATION1 One of the central uses of stakeholder theory, in its original form, was as a counterpoint to the idea that corporations should be managed in the interests of shareholders. As the theory developed the debate was often framed in terms of “shareholders vs. stakeholders.” While developing “theories of the firm” is an interesting and useful project, focusing solely on “theory of the firm” obscures a more important contribution of stakeholder theory. The purpose of this brief essay is to set forth what I consider to be the central insight of stakeholder theory: the jointness of stakeholder interests. The Basic Idea The basic idea of “managing for stakeholders,” as I now see it, is quite simple, and I believe it is closer to the origins of the idea from Eric Rhenman and the Tavistock thinkers. In fact, Juha Nasi was correct in his assessment of the Scandinavian origins of the stakeholder idea that focus on what holds stakeholder interests together. Nasi originally suggested that we focus on “intressent” in Swedish. “In Finnish this term was modified as “intressentti” or “sidosryhma” which could be translated as an “interest group” or even as a “linkage” or “bonding” or “binding” group.” (Nasi, 1995 at 98) It is this bonding or binding idea that is most interesting to explore. Managing for stakeholders asks us to see stakeholders as “bound together by the jointness of their interests.” So, the basic idea goes like this. Business...
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...The current issue and full text archive of this journal is available at www.emeraldinsight.com/1754-243X.htm Corporate governance theorising: limits, critics and alternatives Stephen Letza and James Kirkbride Liverpool John Moores University, Liverpool, UK Corporate governance theorising 17 Xiuping Sun Leeds Business School, Leeds Metropolitan University, Leeds, UK, and Clive Smallman Commerce Division, Lincoln University, Canterbury, New Zealand Abstract Purpose – This paper seeks to examine the mainstream theories of corporate governance in an attempt to suggest that their underlying assumptions and ideologies are misplaced and ought to give way to an emerging pluralistic view of the governing process in order to understand any governance contribution to the dynamics of the business environment. Design/methodology/approach – The paper engages with the traditional literature and views on governance models from law, business and organisational studies perspectives. It then considers the environment and changes in the environment and how those challenge the relevance of the traditional approach, drawing upon the impacts on the fluidity of management and governance perspectives and practices in the global economy. Findings – The reflections and analysis confirm the view that the underlying assumptions of existing models and regulatory frameworks for governance are misplaced and it is suggested, with reason, that a pluralistic view and framework are better than...
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...ERM Paper - Learning Team D ERM Paper - Learning Team D Maintaining effective and compliant business practices is an important part of any management strategy. As shown in the Business Regulation simulation; even one instance of increased liability can cause long-term concerns for a business. Each violation or perceived violation can open the business to questions of negligence and both legal and financial responsibility. To minimize these instances and create a business that has limited liability concerns it is important that management creates and maintains an effective risk management model for the business. Using the simulation provided, our team has identified legal issues and tort violations presented in this scenario, defined a process for managing risk factors, and identified relevant factors in determining what steps to take after a violation occurred. Legal Issues and Principles In the scenario presented Alumina had one Environmental Protection Agency (EPA) violation five years earlier for unacceptable levels of polycyclic aromatic hydrocarbons (PAHs) found in nearby Lake Dira. This contamination was found to have occurred as a direct effect of Alumina’s refining operations. PAHs are carcinogenic chemicals released during refining activities as “suspended particulate matter in the air” (Breast Cancer Fund, n.d.). The company complied fully with the EPA’s order to clean up the contamination as evidenced by a subsequent agency audit. As stated...
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...the intellectual property rights (IPR) generated from any life saving/life sustaining entrepreneurial initiatives should be transferred to the public domain whenever potential users of these innovations are unable or unwilling to enter into mutually beneficial exchange relationships with the creators of the IPR. This reply offers a perspective on why Ray’s (2004) imperative does not maximize social welfare and, in fact, will tend to diminish social welfare over the long-term as a result of lower economic incentives for innovation. Introduction ‘‘Few trends would so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as they possible can. This is a fundamentally subversive doctrine’’ (Friedman, l962, p. 133). Morgan P. Miles is Professor of Marketing, Georgia Southern University. His research interests...
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...Direct Vs. Indirect Cash Flow Method A company reports revenues and expenses on its income statement. Since most companies use accrual accounting, the income statement reveals little about cash flowing into and out of the business. To provide an understanding of cash flows, companies turn to the cash flow statement, which includes a section that restates income on a cash basis. You can choose between the direct and indirect methods to report operational cash flow. Cash Flow Statement The statement of cash flows contains sections for three sets of activities: operating, investing and financing. Only the operations section deals with the question of direct versus indirect cash flows. By comparing the operations section with the income statement, you can identify the differences in timing between income and cash collections. Comparison also reveals timing differences between expenses and cash payments. Large differences might indicate that the company is very aggressive in recognizing income, or that the company spends a lot of cash to buy or maintain assets, a fact not apparent from the income statement. Direct Method When using the direct method, you list cash flows in the operations section of the cash flow statement. Cash flows due to operations arise from customer collections and cash paid to suppliers, employees and others. The section also reports cash paid for income tax and interest. The problem in trying to use the direct method is that a company might not keep the...
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...thical pluralism is the idea that there are many theories about what is “right” and “wrong” (moral norms) which may be incompatible and/or incommensurable with your own personal moral norms. International engagement involves working within other societies where you are likely to be faced with different norms. Deciding when it is appropriate to act under one norm or another requires careful consideration. An example of a moral norm may be: “it is wrong to physically harm a child, and those who do so should be punished.” An ethical dilemma in your international engagement may arise when your moral norms differ from those of a society regarding: ▪ Treatment of/value in women and other gender/sex issues ▪ Treatment of/value in children and the elderly ▪ The environment, waste, and consumption ▪ Business practices, loyalty, contractual agreements, and work ethic ▪ Treatment of/value in animals ▪ Privacy and community ▪ Religion, religious dogma and tradition Ethical pluralism is also known as “value” or “moral” pluralism. It is related but not identical to the concepts of moral relativism (there exist many moral theories and there is no objective standard by which they may be judged) and cultural relativism (that norms, values, and practices may be understood as sensible within their respective cultural contexts). Relevance to ISL: Sustainability Ethical pluralism suggests your actions may be in opposition to local norms, or you might be expected to act in opposition to...
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...Due Care Standard” in the Business Judgment Rule Statutory duty to act: 1. “In Good Faith” – NO SELF INTEREST 2. “With Care of an ordinarly prudent person” BE INFORMED 3. “In manner reasonably believed to be in best interest of corporation” Comparison to a Professional’s “Duty of Due Care”: 1. Duty of Care 2. Breach of duty of care by a reasonably prudent professional 3. breach causes damages that were foreseeable. 4. Negligence Theory: , Can negligence be criminal—US v Parks case Yes! If informed of an issue, should follow through and ensure action was taken (supermarket example) States’ Differing Public Policy on role of stakeholders in making a decision that is in the best interests of the company * Half of the states say the officers and directors can take into account stockholders and other stakeholders (employees, customers, supplies, communities). * Pennsylvania and Indiana allow officers to place the interests of stakeholders above stockholders Why most companies choose Delaware to incorporate Management friendly. Example: business judgement rule Drucker’s Aristotelian statement--aligning a company’s competencies with societal problem “Organizations have a responsibility to try to find an approach to basic social problems which fits their competence and which, indeed, makes the social problem into an opportunity for the organization.” Peter Drucker Aristotle’s Eudaimonia—”full flourishing” if...
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