Business ethics

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Business ethics SOlvay
Alexander Rehn
Flashcards by Alexander Rehn, updated more than 1 year ago
Alexander Rehn
Created by Alexander Rehn almost 9 years ago
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Kohlberg stages Kohlberg Stages of Moral development: 1) Level 1 preconventional a. Stage 1 on pusinshment and obedience: do good to avoid punishment b. Stage 2 Instrumental and Relative orientation: do good to have good done for you 2) Level 2 conventional stages a. Stage 3 interpersonal concordance orientation: conform to expectations of those who are close b. Stage 4 Law and Order orientation: conform what society expects 3) Level 3 Postconventional stage a. Stage 5 Social Contract Orientation: All moral views should be tolerated b. Stage six Universal Moral Principles
Kohlberg vs Gilligan Kohlberg: moral development through stages. Many stuck at some levels. Gilligan says that difference between male and female. Male: right and justicee from impartial impersonal pov. Women concerned with nunrturing relationships. Caring, being responsible
Classification of stakeholders Internal vs External Active vs passive Voluntary vs Involuntary
Levels of Stakeholder Framework 1) ENDS : Purpose and values. a. Values aspirations, basic business or value proposition i. Aspirations? What do we stand for? How to make SH better off? 2) MEANS: Stakeholders and Principles. a. Principles underlying all stakeholders or for specific stakeholders  value driven stakeholder management i. Major tradeoffs when manageing stakeholder relationship? Principles, values and policies we committed so that stakeholders can count on our support? Values, policies that underlie all stakeholder relationships? 3) Moral Legal constraints: Societal Context and Responsibility a. Societal trends, critics, governance, stakeholder dialogue and engagement i. What do critics say? Way of opening dialogue with critics? Future issues?
Fisher Lowell Trigger level Ordinary level Veto level Reject Level
Buddhist ethics Not like deontological and consequentialist ethics in that the source of discussion is not the self. The aim is to reduce the self importance because it is a way of reducing suffering and reaching nirvana, enlightenment. Linked to teachings of gotama, summarized in 4 thruths: 1) there is suffering, 2) suffering is caused by attachment and cravings 3) no suffering is the nirvana 4) there is a path to nirvana --> buddhas 8 fold path divided in 3 parts: wisom, ethical wisdom and meditation. Link to business ethics and csr is that western ethical discussion is still embedded in the capitalist individualistic profit seeking maximization. If less self, then more altruism and paradoxically in the end no need for ethics.
MOral principles 1) Utilitarianism: right action is the one that produces most good for most people 2) Rights: Kant: universability and reversability, no means to ends. Libertarian: Nozick, only right is negative right to freedom. To have freedom you need property rights. 3) Distributive: Egalitarianism Dworking, resources CApitalist: desert and contributtion Rawls 4) Care 5) Virtue: different because not looking at deontological or consequences, but at what character it demonstrates.
Environment & Ethics Anthropocentric: instrumental Enlightened Antrho: also nature but first humans Intrinsic generates moral duty.
Intergenerational Justice Equal rights or no rights? no: do not exist yet, do not know their preferences Issue: assymetry in power. Libertarian: do what you want CAre: should care about our descendence Right: same rights as us Utilitarian: which optimizes utility?
Blue Economy Question resource neccessity Waste does not exist Full use of resources cascades into more efficiency Ijects money back into local economy, and offers higher quality products
Blue economy, how to solve sustainability issues? Include externalities (make people pay) Subsidies to change behaviours --> incentives e.g. company cars.
Precautionary principle If practice has an unknown risk of catastrophic consequences, but uncertain how large risk is --> practice should be rejected until it is certain that the risk is insignificant
Farber: climate change compensation climate change already occuring , mitigation measures will not have time to have real impact --> need for adaptation. Mitigation crucial for future generations, adaptation for our generation.
Buddhism vs virtue Virtue too self centered, buddhism not concerned with development of self.
Principalism 1. Autonomy 2. BEneficience 3. Non Maleficience 4. Justice
Ethnocentrism Evaluate other culture by your own standards
RElativism No absolute truth
Donaldson ethical algorythm 1. Economic issues. Permissible if it was permissible in similar conditions at home 3. Cultural. Permissible if: impossible to do business without, no international rights are breached.
Ethical Banking Most banks apply neutrality principle: no Ethical environmental or social considerations in decision making. More and more financial institutions signing internationally accepted standards: principles for responsible investment or Equator principles. But money is not neutral, it has an impact on human, social environmental welfare. Neutral banking is thus irresponsible. Historically, ethical banking was already present in world religions with interest regulations. Quakers in the 18th century refrained from investing in industries they were morally opposed to.  negative screening. This is known as responsible investment. In the 1990 first attempt to create a positive ethical screening to be used with negative screening. Involves the “best in class method”: compare performances to competitors. Socially responsible funds performance: mixed results. Ethical banking is related to leans and direct financing BUT socially responsible investment relates to the ability to influence company behavior through the provision of capital. Types of ethical banking: cooperatives, private dvlp
Impact Investing Investments made into companies, organizatios, and funds withy the intention to generate measurable social and environmental impact alongside return.
continuum of investments from social to profit phliantrophic donations Venture philanthropy program related investing IMPACT INVESTING ESG investments Socially responsible investments Traditional investment
Equator principles Developed by private sector to model the equator principles on environmental standards of the world back and social policies of the international finance corporation.
New spirit of capitalism Resillience: progressive adoption of values of critics. (study with economics textbooks)
Moral reponsibility 1) causality 2) knowledge 3) deliberate
DeGeorges 10 principles for cross cultural management Picks: no intentional harm More good than bad COntribute to development REspect human rights Pay taxes REspect culture Cooperate with gov to support just institutions Accept responsibility Ensure safe working conditions Redezign dangerous working conditions
UN COMPACT Code of conduct for international comapnies. 10 principles in 4 categories: human rights, labor standards, environment and anti-corruption.
Why NO Business ethics Relativism Libertarianism (friedman, only resposibility towards shareholders) Neo-liberal : responsibilities to shareholders only Legalist: limited to the law Pessimist: oxymoron
Codes of conduct - Definition Written documents that guide the decision making in a corporation in terms of values, rules of conduct, stakeholder principles, institutional values. Also practical mechanisms for reporting and sanctions.
Classification of Codes of conduct 1 zone internal 2 zone environment impacted by activities 3 zone political environment
Motivations for code of conduct Marketing Self interest Politics of consumption Forced Vacuum created by globalization
Forum shopping MNC putting countries in competition between each other regarding legal regimes. influence on politics
Theories of moral virtue Virtues enable... Aristotle : ...live according to reason Aquinas: ...+ united with god MacIntyre: ...achieve the good at which human "practices" aim (reach happiness) Pincoffs: generally desirable dispositions which are desirable to have in view of the human situations under which human beings must live.
Integrative thesis Most business decisions, or statements about business, have some implicit ethical view. Most ethical decisions, or statements about ethics, have some implicit view about business
Rode, Lemenestrel : study Test how subjects decide to allocate revenues when one is contributing more than the other. REsult: meritocratic or egalitarian.
Fair wage- talking points SROI by NEF Criteria for wages: Market base, procedural, deontological
Standards for fair wage Egalitarianism Positive rights (minimum subsistence) Moral desert (according to contribution) Libertarianism (fair when voluntary)
SROI tells you how much social value is created for each pound invested. Is a measure of how effective work is creating benefits for everyone involved.
A bit rich - NEF - Recommendations End the policy silence on high pay (Some Japanese firms voluntarily impose pay ratios limiting the gap between the top and bottom pay)  Learn from the successes of anti-discrimination legislation  Build social and environmental value into prices  Introduce more progressive taxation (Wealthiest o not pay their fair share of tax, the very wealthy may pay none at all)  Encourage new forms of ownership (Mutually owned building societies, cooperatives, land trusts)  Radically reform the role of the City (Return finance to its role as servant, not master of the economy)
Deontological Rightness and wrongness of actions themselfes, not consequences
Three levels of ethical issues systemic Corporate Individual
3 views on moral resposibility company Employees both
Easterlin Paradoz Average happiness not correlated (or very weakely) with GDP. (example of US)
Dominance principle prefer living in bel than BRA, because of living conditions despite level of happiness
What impacts happiness unemployement Stress Health, age, gender, family... SOCIAL COMPARISON, HABITS, UNOBSERVED
Rights Principle The morally correct action is the one that you have a moral right to do, that does not infringe on the moral rights of others, and that furthers the moral rights of others. MEans not result
Conflicting rights example HIV in Africa : intellectual property and right to healthcare
Gilligan steps development of ethics of care 1. care for self 2. care for others 3. Understand interconnection between other and self. Care becomes self chosen principle.
Distributive justice DEsert Locke: contribution, effort, compensation
Nozick entitlement theory justice in acquisition and transfer.\ Entitled if: 1 not previously owned 2 voluntary transaction
Rawls theory of justice 1. each person has an equal claim to a fully adequate scheme of equal basic rights and liberties 2. SOcial and eco inequalities satisfy 2 conditions (a) attached to positions open to everyone (b) profit the leas andvantaged members of society
Karel DeGucht Resembles Rawls: eco inequality justified by 2 ways: a) personal responsibilities b) economic efficiency Duty of assistance for less well off societies. TO do: boost GDP in poorer countries, open borders.
Forms of Tax avoidance practices De Colle & Bennet 1) state-induced (legal and welcome) 2) Strategic (transparent legal but not always in accordance with legislators intentions) 3) Toxic (strictly legal but contradict intent of law
Sarbanes-OXley act Requires all public firms to disclose whether or not they have adopted a code of ethics
Mailand: fair salary If freely accepted by informed workers
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