Study Guide Midterm 2 ch 5- 7

Study Guide Midterm 2 ch 5- 7 - Moral Issues in Business...

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Moral Issues in Business Chapter 5 Corporations A Corporation is a thing that can endure beyond the natural lives of its members and that has incorporators who may sue and be sued as a unit, and who are able to consign part of their property to the corporation for ventures of limited liability. “limited liability” means that the members of the corporation are financially liable for corporate debts only up to the extent of their investment. Limited-liability Corporations vs. Partnerships A corporation is not formed simply by an agreement entered into among its members. It becomes incorporated by being publicly registered or in some other way having its existence officially acknowledged by the law. While a partner is automatically entitled to his or her share of the profits as soon as they are ascertained, the shareholder in a corporation is only entitled to a dividend from the company's profits when it has been “declared” (e.g., by the corporation's directors). First National Bank of Boston vs. Bellotti This was a 1978 U.S. Supreme court case in which the free-speech rights of corporations were defined for the first time. The bank wanted to spend corporate funds to oppose a Massachusetts’s referendum enacting a graduated personal income tax, and the Supreme Court decision allowed them to do so. Three Senses Of “Moral Responsibility” Sense 1 refers to holding people morally accountable for some past action. Sense 2 refers to one's accountability, not for a particular past action, but for the care, welfare, or treatment of others as derived from the specific social role that one plays. Sense 3 refers to one's capacity for making moral or rational decisions on one's own. Shaw and Barry say that sense 3 is a necessary but not sufficient condition for senses 1 and 2. 2 Views Of Corporate Social Responsibility Narrow View -- profit maximization: o The only responsibility of business is to make money for its owners. The only limits here are the elementary rules of morality (face-to-face conduct) such as honesty, good faith, etc. Broad View -- social responsibility: o In addition to making a profit, business has other responsibilities, e.g., to consumers, employees, and society at large. Business should refrain from undesirable conduct and contribute actively and directly to the social good.
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Study Guide Midterm 2 ch 5- 7 - Moral Issues in Business...

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