Week 1 Flashcards
Introduction lecture + stakeholder theory
The textbook discusses a lot on the topic of crossings, which three crossings are meant?
- Between ethics and business
- business and philosophy
- business ethics and continental philosophy
In which philosophy is Business ethics grounded and which perspective (of philosophy) is added within the book?
Grounded in analytical philosophy but continental philosophy is added
How do analytical philosophers view themselves?
As:
* Scientifically oriented
* language oriented
* Disciplined
* Politically neutral
* Methodological
* Optimistic
* Real philosophers
How do analytical philosophers view continental philosphers?
As:
* Atristic
* Non-sensical
* Politically left
* Chaotic
* Poetic
* Pessimistic
How do continental philosophers view themselves?
As:
* Profound
* Politically engaged
* Critical about science
* Philsophical
* Realistic
How do continental philosophers view analytical philosophers?
- Shallow
- Naïve
- Neutral, petty
- Docile followers (science, liberalism)
- Too language oriented
- Unserious
What is ethics?
the discipline of questioning whether we still agree with what is commonly accepted as right and wrong in society. It is a reflective and critical study about good and bad. It:
* is aporetic (aporia = no opening), which means that it does not provide answers.
* criticizes morality; The whole of the current norms and values, i.e. ideas about what is ‘right’ and ‘wrong’ in society.
What is the is-ought fallacy?
The belief that is something has always been a certain way, it is ought to stay that way.
Ex. We say there has always been injustice in society but this does not mean it is ought to be that way
What are values?
enduring beliefs about what makes a preferable existence
What are norms?
Beliefs about what we find valuable, that tell us how we should act and day-to-day
What are principles?
Moral laws that we adhere to because they have a rational appeal
What is relativism in ethics?
The application of different moral standards to different ethical problems
Why is relativism rejected by most ethicists?
- It assumes there are no fundamental goods which should be protected within society
- it can’t offer compelling arguments against abuses
- Difficult to solve disputes because they don’t believe some ethical arguments are better than others
What is ethical subjectivism?
The belief that one does not have to justify their actions to others
What is ethical absolutism?
The belief that there is only one conception of right and wrong that should hold at all times
Continental philosophers: pessimistic on this view bc of totaliarian implications
What is ethical imperialism?
situation where a code of ethical behavior or attitude is imposed on another community or society.
Think: standard imperialism
Business ethics
Asks the central question on how ethics can make business more profitable
* Studies good and bad within organizations
* Strives to improve the status quo within business and organizations
What is the criticism on business ethics?
- Focused on improving the status quo but doesn’t question it
–> therefore, not serious ethics bc non-reflective and non-questioning, does not really critisize morality - business ethics does provide an answer to questions
–> therefore non-aporetic
=
What does stakeholder analysis consist of
- Define stakeholders
- Determine powerfulness of stakeholders
- You keep more powerful stakeholders more into account
- Determine what to do for each stakeholder in order of their power rank
Based on which three characteristics do you determine the salience or relevance of stakeholderss?
- Power: How much power does the stakeholder hold over the firm. To what extent does the firm depend on it?
- Urgency: To what extent does the stakeholder require immediate attention
-
Legitimacy: Is the role this stakeholder carries widely perceived as appropriate and valid?
Stakeholders vary from weak to strong or low to high salience
1 characteristic= low salience
2 characteristics= moderate salience
3 characteristics= high salience
What does the stakeholder theory entail?
A view of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities and others who have a stake in the organization. The theory argues that a firm should create value for all stakeholders, not just shareholders.
How does the Freeman define the stakeholder?
“A stakeholder is any group or individual who can affect, or is affected by, the achievement of a corporation’s purpose. Stakeholders include employees, customers, suppliers, stockholders, banks, environmentalists, governments and other groups who can help or hurt the corporation.”
What are Friedman’s arguments in the stakeholder debate?
- The only responsibility an organization has is that it should increase its profits. Therefore, the only stakeholders are shareholders (1).
- Undermines democracy as it messes with the distribution of wealth creation (corporations) and wealth distribution (governments) (2)
- It is the task of politicians, not of entrepreneurs, to decide about the distribution of wealth
- Stakeholder theory is more socialistic (as opposed to democratic bc it doesn’t involve everyone in decision-making)
- Friedman’s theory: shareholder capitalism is more in line w/ democratic principles and freedom than stakeholder theory (3)
- As long as they play within the rules of the game (law) and act morally decent
- Governments can be elected and voted away if the public is not satisfied with their wealth distribution, this cannot be done
- because it supports individual ownership and control, which is a key part of democracy.
What are Freeman’s arguments in the stakeholder debate?
Reasonable pluralism:* We need a plural perception of the relationship between business and society
* seperation fallacy: the economy cannot be seperated from all other parts of society (is intellectually fallacious), all these structures are part of a system (1)
* He wants to prescribe pluralism Stakeholder theory makes the business world complex bc of conflicts of interest but Freeman is optimistic: assumes capitalistic agents are willing to accept reasonable pluralism (2)
* Stakeholders’ interests should therefore inform strategic management
- Freeman is a system theorist: ystems theory is an interdisciplinary study of systems open in new as they relate to one another within a larger, more complex system. The whole is greater than the sum of its parts. - Friedman argues the oppossite: the structures should be seperated
- Friedman argues opposite: don’t perscribe, let firms alone
Why does the Friedman vs. Freeman debate matter?
- Discusses what we as a society can expect of businesses
- Pragmatic for manager bc they know what is expected
- Is politically relevant: which actors should solve societal problems (governments or businesses?)
- has a moral perspective (reasonable pluralism)
What is meant by the big or great reset?
‘Building back better’ emerged in response to the global challenges posed by the COVID-19 pandemic: he debate about a transition to stakeholder capitalism Friedman would have seen this as the end of democracy because it gives corporations too much power. Critics argue that it is just about saving capitalism from capitalists (1).
- save capitalism from its own excesses and flaws, rather than fundamentally addressing underlying systemic issues. They suggest that while the rhetoric may emphasize positive change, in practice, the reset may prioritize maintaining the status quo and preserving the interests of powerful economic actors.
What is reasonable pluralism?
Freeman advocates a “reasonable pluralism”, which is supposed *“to bend together the central concepts of business with those of ethics”. *
What is philantro capitalism?
A way of doing philanthropy, which mirrors the way that business is done in the for-profit world. Solving the world’s biggest and most pressing issues. Rather than simply writing a check, the ultra-wealthy are taking on a very personal and involved approach by starting their own philanthropic ventures and applying market-based solutions to the causes they take up.
See summary for example
What are the 2 issues with the big or great reset?
- Just a way of saving capitalism from capitalist: maintaining capitalism and the status quo while saving it from its ruin by capitalistic greed
- Will entrepreneurs do better than managers and politicians?
What are the four ways in which stakeholder capitalism is understood according to Freeman?
- As a PR-tactic: things such as greenwashing and virtue signaling
- As CSR/ CSP: actually wanting and trying to deal w/ social issues
- As top-down elites or government policy shaping business
- As the business model (Freeman’s view): involves a fundamental shift in how businesses operate, integrating the interests of various stakeholders into their core strategies and decision-making processes.
What are hyperagents?
Individuals, with enormous amounts of wealth who can do what it would otherwise take a social movement to do, they have power to influence the world.
By what actors and which idea is philantro capitalism driven?
- Actors: hyperagents
- Idea: Richesse oblige
Richesse oblige= with great power comes great responsibility
What are critiques on philantro capitalism?
- un- or anti-democratic: hyperagents cannot be voted away if the public does not agree with actions
- Richesse does not only oblige, it **expects to be obliged too **
- Sets the scientific agenda cause researchers go where the money is
- David Rieff: “for the first time in
modern history, private business—the most politically influential, undertaxed, and underregulated sector among those groups that dispose of real power and wealth in the world, as well as the least democratically accountable—should be entrusted with the welfare and fate of the powerless and the hungry.”
Freeman proposes a mental model (stakeholder map) of the stakeholder analysis w/ the firm in the middle, what is the critique on this firm-centric depiction and what solutions are there?
This depiction may lead to difficulties in the firm for seeing from other perspectives
1. The firm as middle stakeholder is interhcnageable w/ other stakeholders
2. Put a picture of the chosen stakeholder in the middle
3. Take a systems approach portraying interrelatedness
What are overall criticisms on the stakeholder model?
- Theoretical flaws
- Too much emphasis on powerful stakeholders
- Decentring models are fake/ irrelevant
- Thinking is not acting
- Refusal to really think about ethical implications to others
- Stakeholder analysis is overly rational and bureaucratic, responsibility is not
- Moral responsibility is related to the ‘human face’ (Levinas), not to systems theory or complexity theory
What does Levinas’ view entail?
Known for his phenomenological approach to ethics and his emphasis on the ethical significance of interpersonal relationships. His work explores themes such as responsibility, alterity, and the face-to-face encounter with the Other.
Our understanding is a selfish totalization of the world around us. He makes a clear dinstiguish between ‘same’ that which is me and ‘other’; that which is not me.
For Levinas responsibility is felt in an encounter with the Other. Morality comes from relationships between human subjects and moral subjects. However, he offers few practical directions for how to operationalize this responsibility.
What does Bauman’s view entail?
known for his contributions to social theory and his analysis of modernity and the condition of postmodernity. Bauman’s work often focuses on issues such as globalization, consumerism, liquid modernity, and the nature of social bonds and morality in contemporary society.
He has the same ideas as Levinas about the Other and the responsibility that comes forth from encounters with the Other. Dividing responsibility among many in institutional and organizational projects remove the face-to-face encounter with the Other.
What are the continental critiques on the stakeholder model?
Levinas:
1. Stakeholder theory concerns itself w/ the firm rather than the individual
2. Each class of stakeholders is viewed as one ‘same’ rather than a collection of individuals
Bauman:
1. Bureaucracy removes the face-to-face encounter w/ the ‘other’ and therefore bureaucracies can’t respond to stakeholders’ needs
2. We is not actualy the plural of form ‘I’ and so the idea of collective responsibity is fallacious
These views remind us that real encounters with the ‘other’ explain the infinite responsibilities we have toward one another and that we cannot escape this accountability.
