Ethics Flashcards
What is ethics and why is it important in IB?
- The accepted principles of right or wrong that govern the conduct of a person, profession or organisation
- It is often argued that inward investment by a MNC can be a force for economic, political and social progress that ultimately improves the rights of people
What are the philosophical approaches to ethics?
- Straw Men
- Utilitarian and Kantian ethics
- Rights theories
- Justice theories
What are the aspects of the Straw Men approach?
- Friedman doctrine
- Cultural relativism
- The righteous moralist
- The naive moralist
What is the Friedman doctrine and what is it?
- Aspect of the Straw Men philosophical approach to ethics
- Only social responsibility is to increase profits so long as the company obeys the law
- Explicitly rejects the idea that companies should undertake social expenditures beyond those mandates by the law and required for efficient running of the business
- If stockholders wish to use their proceeds to make social investments that is their right, but managers shouldn’t make that decision for them
What is cultural relativism and what is it?
- Aspect of the Straw Men philosophical approach to ethics
- Belief that ethics are nothing more than the reflection of a culture, and accordingly a firm should adopt the ethics of the culture in which it is operating
What is the righteous moralist and what is it?
- Aspect of the Straw Men philosophical approach to ethics
- Claim that a MNC’s home country’s standards of ethics are the appropriate ones for companies to follow in foreign countries
- Typical of managers in developed nations
What is the naive moralist and what is it?
Assertion that MNC’s should imitate the ethics of other MNC’s operating in the same foreign country
What is Utilitarian and Kantian ethics?
- Hold that the moral worth of actions or practices are determined by their consequences
- An action is judged desirable if it leads to the best possible balance of good consequences over bad consequences
- Kantian ethics holds that people should be treated as ends and never purely as means to the ends of others
What are rights theories?
Recognise that human being have fundamental rights and privileges that transcend national boundaries and cultures
What are Justice theories?
- Focus on the attainment of a just distribution of economic goods and services
- A just distribution is one that is considered fair and equitable
- John Rawls
What was John Rawl’s contribution to and what was it?
- Justice theory
- Argues that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone’s advantage
- Under the ‘veil of ignorance’ all people would agree that 1. each person should be permitted the maximum amount of basic liberty compatible with a similar liberty for others and 2. that once equal basic liberty is ensured, inequality in basic social goods (income & wealth distribution, and opportunities) is to be allowed only if such inequalities benefit everyone
- One can therefore argue that a market based system that produces unequal distribution is just as it in itself benefits the least advantaged members of society,
What kinds of organisational stakeholders are there?
- Internal
* External
Who are the internal organisational stakeholders?
- Shareholders (ROI)
- Employees (compensation)
Who are the external organisational stakeholders?
- Suppliers (demand stability/price)
- Consumers (quality/price)
- Society at large (social contribution)
- Governments (taxes, legal compliance)
- Environment (sustainability)
What are the approaches to the legal foundation of ethical behaviour?
- The law is inadequate
* Legal justification is appropriate
