Case Studies in Business Ethics

Chapter 2

Interesting intro pointing to a need for action as opposed to chat.

2 approaches are looked at in the chapter.

Both kindof Aristotelian

1. Idea that behaviour is affected by decisions
look at decisions
decision procedures
how do we figure out the right think to do?
JUDGEMENT

2. Idea that motivation is key.
virtue theory
what do we want?
DESIRE

1. Sternberg - essentially teleological and Aristotelian.

definition of a human activity should be given in fixed terms of its purpose.
we assess goodness of behaviour by reference to the defining the purpose of the behaviour.
Purposes are essential for defining goodness.
'If the purpose of writing is to inform, then what counts as good writing will be different if the purpose is to confuse or amuse.

> purpose of business - maximise owner value
this is what differentiates business from club/gov/family
>in order to maximise value long-term, confidence is needed
therefore trust is needed
legality must be favoured
honesty, fairness must be followed
ORDINARY DECENCY
> In order to achieve its purpose DISTRIBUTIVE JUSTICE must be followed
i.e. rewards for contributions to cause. Good pay for hard work etc.

Business is ethical when it maximises long-term owner value subject to distributive justice and ordinary decency.

P29 Key insights into ethical decisions.
>not an add-on
>if an act does not maximise owner-value lon-term, then it is wrong, both ethically and financially
>must contribute
>this does not mean 'green' stuff in wrong - it may contribute long-term.
>Using business resources for non-related activities in THEFT.

p.30
>business should only partake in activities where adds to long-term value is maximised
>one additional issue with unrelated 'social responsibility' is that it distracts from real ethical objectives. diverts attention.
>shouldn't give money to charity to avoid justice for unethical activities.

New Slant.
Some corps fo follow other goals, as decided by their shareholders.
>Stakeholder theory. idea that business is not run for financial gain of owners, but for the benefit of those who have a stake in the business. eg. employees/customers.

However, Sternberg argues
A business is not a business unless it follows th goal of profit maximisation long-run.
Anything else - not business.
Stakeholder theory may be an improvement, but it is not business.