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Chapter 2:

Ethics & Social Responsibility of Business

Law and Ethics

Moral Theories and Business Ethics

The Social Responsibility of Business

The Corporate Social Audit

 

CHAPTER OBJECTIVES:

1. Describe ethical fundamentalism

2. Describe utilitarianism as a moral theory.

3. Describe Kantian ethics

4. Describe Rawl's social justice theory.

5. Describe ethical relativism,

6. Describe maximizing profits as a theory

7. Describe the moral minimum theory of

social responsibility.

8. Describe the stakeholder interest theory

9. Describe the corporate citizenship theory

10. Describe corporate social audits.

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A. LAW AND ETHICS

1. Much of our law is based upon moral principles

and moral values.

a. Thou shalt not kill = criminal homicide

statutes:

1st degree murder

2nd degree murder

voluntary manslaughter

involuntary manslaughter

vehicular manslaugher

b. Thou shalt not steal = criminal theft statutes:

robber

larceny

bad checks offenses

embezzlement

possession of stolen property

 

2. Not all moral principles or moral values have been

enacted as law. The law may permit something

that is ethically wrong. The law may also require

or demand conduct that may be ethically wrong.

 

 

3. In terms of ethical behavior, merely obeying the

law is the minimum level of expected conduct.

 

4. Ethics may be defined as a set or moral principles

or values that govern the conduct of an individual or a group.

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B. MORAL THEORIES AND BUSINESS ETHICS

1. Ethical Fundamentalism outside source for ethical rules.

2. Utilitarianism Jeremy Bentham (1748-1832) AND John Stuart Mill (1806-1873).

3. Kantian Ethics duty ethics or deontology. Universal rules. Categorical imperative: "do unto others…"

Consistency all cases treated alike, no exceptions

4. Rawl's Social Justice Theory. John Locke (1632-1704) and Jean Jacques Rousseau (1712-1778) proposed a social contract theory of morality. I will keep the rules if everyone else does. Distributive Justice Theory and the veil of ignorance.

5. Ethical Relativism each person decides for themselves.

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C. THE SOCIAL RESPONSIBILITY OF BUSINESS

Social responsibility is the duty owed by businesses to act socially responsible in producing and selling goods and services.

1. Maximizing Profits for shareholders

2. Moral Minimum to make profit while avoiding harm to others.

 

3. Stakeholder Interests requires a corporation to take all stakeholders interests into consideration, not just shareholders.

 

4. Corporate Citizenship corporation should do good.

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D. THE CORPORATE SOCIAL AUDIT