PHL295S - March 9th, 2012

PHL295S - March 9th, 2012 - Business Ethics - March 9th...

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Business Ethics - March 9 th 2012 1. The Market (Smith, Coase, Sen) 2. The Corporation (Coase, Lee) 3. Managers Obligations (Davis, Friedman, Hansmann) 4. Managing for Stakeholders (Freeman, Goodpaster, Porter) 5. Critics of Stakeholder View (Marcoux, Boatright, Heath) Marcoux: - Fiduciary argument against stakeholder theory - Some relationships require fiduciary duties (information vulnerability, control vulnerability) - Shareholder-manager relationship has these relevant features (like lawyer/client doc/patient) - Stakeholder theory is morally lacking; not the same relationship as is required for shareholders o Ability to detect errors, vulnerability, etc. Boatright: - Stakeholder idea is a useful concept but it is used for the wrong purpose - It is a bad idea as a system of governance; all are better off if managers aim at serving shareholders o Employees with stable jobs, maximum pay, integral to suppliers etc, - Stakeholder theory is good as a vision for the company, a reminder that all must benefit Heath: - Business ethics is a type of professional ethics o Like doctors and lawyers o A role specific type of ethics; to fit their specific social role - Shareholder model good because it reminds managers that they’re dealing with someone else’s money, but does not tell them why they shouldn’t engage in antisocial behaviour to max. profit - Stakeholder theory solves this, but it introduces agency problems because managers must serve multiple parties - “Market Failures” Model: o Managers must not seek profit from market failure Information asymmetry, externalities, monopoly Avoiding these things is the underpinning if the market Self-interested behaviour is justified so long as you abide by these rules… competitive domains need rules…hitting hard w/in rules is okay
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This note was uploaded on 03/26/2012 for the course PHL 295 taught by Professor Chrismacdonald during the Spring '12 term at University of Toronto- Toronto.

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PHL295S - March 9th, 2012 - Business Ethics - March 9th...

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