Unit 3 Flashcards
What is the agency relationship?
It’s a relationship between two parties where the agent agrees to represent or act for the principal
Who has the right to control the agent’s conduct in matters entrusted to the agent?
The principal
What is one of the most common and most important of all legal relationships?
The agency relationship
Who are those who have a stake or claim in some aspect of a company’s products, operations, markets, industry, and/or outcomes?
Stakeholders
Who must keep the relationships among stakeholders in balance?
Management
What is Milton Friedman’s philosophy?
The only social responsibility of a business is to increase its profits
How has Milton Friedman’s philosophy been developed through agency law?
The agency relationship is a relationship between two parties where the one party, the agent, agrees to represent or act for the other party, principal. He interprets this by saying that a corporate officer, the agent, is an employee of the owners of the business, the principal, so they have a direct responsibility to their employers. That responsibility is to earn as much money as possible while conforming to the basic rules of society.
What is Edward Freeman’s stakeholder theory?
He says that stakeholders are those who have a stake or claim in the firm, so they should all be considered when the firm makes a decision
What did you learn about group thinking from the Parable of the Sadhu?
When you are alone you might form a certain opinion, but when you work in a group setting that opinion might change or you might be influenced to change your opinion by the other group members
What happened to business ethics in the 1960s?
The 1st code of ethics was developed
What happened to business ethics in the 1970s?
The highlighting of legal compliance
What happened to business ethics in the 1980s?
The 1st U.S ethics office was developed
What happened to business ethics in the 1990s?
The focus of ethics was internationalization
What happened to business ethics in the 2000s?
Business ethics education was implemented
List 3 events that happened in the 1960s
- Cold War
- Vietnam
- Civil Rights Movement
