Including incentives for innovation entrepreneurship

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including incentives for innovation, entrepreneurship, and productionAny attempt to rearrange social benefits requires an accurate measurement of current wealthUtilitarianismoProponent: Jeremy BenthamoRequires a decision maker to maximize utility for society as a wholeoAchieving the highest level of satisfaction over dissatisfactionsoA person must consider the benefits and costs of her actions on the whole society oFocus is on society as wholeoJudges actions as good or bad based on consequences: “the ends justify the means”oAct only if the benefits to society outweigh the costs of the actionoActions are judged based on the outcomesoStrengthsEasy to articulate the standard of conduct: you need to do what is best for society as a wholeCapitalist in nature: focuses on total social satisfactionsoCriticismsCritic: John Stuart MillDifficult to measure satisfactions and dissatisfactions of a societyIt can foster a tyranny of the majority that may result in morally monstrous behaviorNot constrained by law- the pains of violating a law may outweigh the benefits resulting in illegal activities Profit MaximizationoMaximize business profits while Corporations have a duty to comply with the lawoRequires a decision maker to maximize a business’s long-run profits within the limits of the lawoBased in laissez faire – total social welfare is optimized if humans are permitted to work toward their selfish goals oClosely related to utilitarianism because focuses on results-maximize total social welfare, different in how ethical decisions are made- Under profit maximization Total Social welfare is optimized by narrowing the actor’s focus. Requiring the decision maker to make decision that merely maximizes profits for himself or his organization rather than whole societyoSociety will be benefited if humans are permitted to work toward their own selfish goalsoStrengthsBy working in our own interests, we compete for society’s scarce resources, which are allocated to those that can use them the most productively-allocating resources to most efficient usesResults in ethical conduct, requiring society’s members to act within the constraints of the lawoCriticismsCorporate managers are subject to human failings that make it impossible for them to maximize corporate profits. Group decision making- group often accept a higher level of risk than they would as individuals
Improving Corporate Social ResponsibilityEthic CodesCode of ethics adopted by large corporations and industries to guide executives and other employeesSarbanes-Oxley Act requires a public company to disclose whether it has adopted a code of ethicsEthical Instruction

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