Business Ethics paper

Business Ethics paper - Business Ethics Business decisions...

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Business Ethics Business decisions are ethical decisions. They have a basis in some understanding of what ought to be done - what is "right" and "wrong". Theories about the nature of the firm not only provide some perspective on how we conceptualize the economic objective of business, but help formulate how we view the choices that business confronts. A purely economic perspective argues that the business of the firm is paramount. If the firm pursues its economic, profit maximizing objectives, the social and larger economic interests of all will be served. If we assume that competing interests are imposed on the firm. Business management engages not only the interests that are specific to the firm itself, but also engages interests and issues that have implications beyond the single profit maximization goal of investors. The firm has social responsibilities. We examine five ethical frameworks for consideration of the social responsibility of business and managers: Egoism or Self Interest Social Group Relativism Cultural Relativism Utilitarianism Deontology Egoism or Self Interest Perspective Egoism or self-interest ethics assumes that individuals and businesses have an obligation to guide their conduct by a rational calculation of one’s own interests. For business, it follows that value creation or profit maximization is paramount to the firm. This view is presented by Milton Friedman in his classic Capitalism and Freedom (1962): The view has been gaining widespread acceptance that corporate officials and labor leaders have a "social responsibility" that goes beyond serving the interests of their stockholders or their members. This view shows a fundamental misconception of the character and nature of a free economy. In such an economy, there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud. . . . It is the responsibility of the rest of us to establish a framework of law such that an individual pursuing his own interest is, to quote Adam Smith again, "led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society it was no part of it. By pursing his own interest, he frequently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." Milton Friedman illustrates his perspective with the pencil. The pencil is a product composed of many parts that are produced independently around the world. The wood is from a South American tree cut by a worker who knows nothing of its intended use. The worker labors to cut the wood for wages. The rubber is from a plantation of rubber trees, perhaps located in Indonesia, cultivated for diverse purposes. The lead is made from graphite produced as by -
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This note was uploaded on 04/07/2008 for the course BUSENV 1101 taught by Professor Neff during the Spring '08 term at Pittsburgh.

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Business Ethics paper - Business Ethics Business decisions...

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