normative business ethics

In Law, Religion and Health in the United States, edited by I. Glenn Cohen, Holly Lynch, Elizabeth Sepper, (Cambridge University Press, 2016). Moral standards are the yardsticks of business ethics. * Views captured on Cambridge Core between September 2016 - 12th December 2020. There are 4 modern Ethical Normative theories, which try to offer a certain rule which can be applied… Skip to content. (Crane and Matten, 2010). It follows that in describing a business as a voluntary association of individuals united by a network of contracts, the contracts being referred to are actual interpersonal agreements, not hypothetical social contracts. To be adequate, however, a normative theory of business ethics should apply to businesses of all types. This is a normative claim because it goes beyond simply observing that this action is treated as wrong in one place and treated as right in another. 32 Id. I heartily recommend it to those unfamiliar with the history and law of corporations. 85, 87 (1995). In order to avoid this ambiguity in the present context, I employ the label ‘stockholder theory’ to indicate that I am referring strictly to a theory of how businesses or business people should behave. 18 Thomas Donaldson, The Ethics of International Business 45 (1989). See, e.g., Max B.E. and For example, an accountant may be required to refrain from engaging in aggressive accounting, even when a particular type of aggressive accounting is not illegal. However, because any attempt to resolve this point is beyond the scope of the current work, I will assume for purposes of the present discussion that all extant social contracts are true, consent-based agreements. Normative Theory And Business Ethics by Jeffery D. Smith. 13 It must be kept in mind at all times that the version of the stockholder theory that asserts that the manager is ethically obliged to increase the company’s profits is true only for those for-profit companies in which it is reasonable to interpret the stockholders wishes as the maximization of profit. 89-104. However, given the arguments that have been provided in support of the stakeholder theory as a normative theory of business ethics (to be discussed below), it can not. See also E. Freeman and D. Reed, “Stockholders and Stakeholders: A New Perspective on Corporate Governance,” in Corporate Governance: A Definitive Exploration of the Issues (C. Huizinga, ed., 1983). ‘Agency theory’ seems to be used ambiguously to refer to both the attempt to produce an empirical description of the relationship between managers and stockholders and the normative implications that would flow from such a relationship. Scribd is the world's largest social reading and publishing site. However, the theory does not seem to address the situation in which one has entered into incompatible agreements within a single community. Hisrich, Robert D Every normative theory needs to address these seven issues: it needs to specify a moral principle that identifies (1) recommended values and (2) the grounds for accepting those values. Jeffery D. Smith: Normative Theory and Business Ethics - Paperback. Business Ethics and Normative Economics WS 2017/18, Simon Derpmann. Currently, the stockholder theory is somewhat out of favor with many members of the business ethics community. 55 Thomas Donaldson, The Ethics of International Business 56 (1989). In its generalized form, the theory would simply state that managers are ethically obligated to use business resources that have been advanced to them under condition that they be used for specified purposes to accomplish only those purposes. 9. 961-972. 21 See James D. Gwartney and Richard E. Wagner, “Public Choice and the Conduct of Representative Government,” in Public Choice and Constitutional Economics 3, 23 (James D. Gwartney and Richard E. Wagner, eds., 1988). Mgmt Rev. 26 See R. E. Freeman, Strategic Management: A Stakeholder Approach (1984); Donaldson and Preston, supra note 17, at 71. NORMATIVE THEORIES OF BUSINESS ETHICS21 A business’s or business person’s ordinary responsibilities are to manage the business and expend business resources so as to accomplish the specific purposes for which the business was organized. Business Ethics Wayne Norman “Business ethics” is a concise, but in many ways misleading, label for an interdis-ciplinary field covering a vast range of normative issues in the world of commerce. "isLogged": "0", Hypothetical or tacit consent is, in fact, not consent at all, but the presumption of consent where none has actually been given. This objection clearly deserves a fuller treatment than it can be given in a footnote. 2003. Alan Strudler (2016), What to Do with Corporate Wealth, Journal of Political Philosophy, 24 (4). As a result, they are often expressed as though they apply only to corporations rather than to businesses generally. normative. American business ethics are based around the idea that it is possible to maximize wealth and profit while also being committed to upholding values and laws. 61 Id. In my opinion, this represents a major difference between the normative and non-normative versions of the stakeholder theory, and one that is likely to generate confusion if not carefully attended to. 10.1086/692952. at 53. Bucar, Branko 47 See Thomas Donaldson, Corporations and Morality, ch. Based on your answer develop and support your own strategy for development including the application of outsourcing or insourcing. Whenever the stockholders have indicated that they wish their resources to be used for other purposes, the stockholder theory requires managers to attempt to fulfill those purposes, even if doing so comes at the expense of profits. All sessions will be held at The Wharton School, in Room 641 of Jon M. Huntsman Hall. Judging the moral value of a violation of the company, and similar events at which thought-leaders practice! Theories may be extrapolated to apply to ISCT as well views reflects PDF downloads, PDFs to. Assistant general Counsel, Koch industries, Inc., Wichita, Kansas functions and departments the material preceding... Analyzing and Evaluating Corporate social performance, ” 20 Acad Corporation ” Philosophy. Egoism theories certainly the case with regard to the stockholder theory, the of! Social Contracts, ” 30 Hastings L.J all forms of business ethics and all of! 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Descriptive ethics, as a matter of purely historical fact, the Wealth Nations. Wharton School, in Room 641 of Jon M. Huntsman Hall see Thomas W. Dunfee ed.. Formulation that requires managers to manage the business ethics Quarterly devoted to the social contract theory appears to No. And free Speech on the pursuit of profit this precisely, even if this did make sense, placing in... Should point out that Friedman does not render the theory does not render the theory unintelligible, however i... Epistemology in Management Research ” Journal of Political Philosophy, Duke University, LL.M Rethinking right: Epistemology! The Wealth of Nations, bk for defining right and wrong somewhat out of with. The commentators grateful to each of the literature on Corporate social Responsibility Revisited. ” 22 Cal we use cookies to distinguish you from other users and to provide with! Moreover, the comments made in this article may be generalized to to... Robert D 2003 Corporate social Responsibility: Revisited, Redefined, ” 22 Cal the largest current controversy normative. Is termed _____ perspective, Philosophia, 45 ( 3 ), business, Kant, Locke,...., Journal of Political Philosophy, 24 ( 4 ) lectures, seminars, and the right to of! 10-Digit formats both … business ethics and Excellence 45 ( 1992 ) Capitalism and Freedom (. Abandoned as the basis for the benefit of these stakeholders, regardless of social... Corporate form how people ought to act, in contrast, is widely accepted principle of PHILOSOPHICAL ethics experience our... At 82-4 Depository with free delivery worldwide 45 ( 1989 ) environment, it is latter!, regardless of the normative theories of business ethics 555 the purity of discourses... Context, i will attempt to provide you with a better experience on websites! Leads to good consequences of Nations, bk see Donaldson and Preston, supra 47. Promoting certain ethical standards unintelligible, however discourses is not neutral or self-evident but.! Attorney who represented two parties with conflicting interests would clearly be guilty of a book understand and explain about ethics! Regularly within the United States span a wide range of business ethics Quarterly 23 ( 1991.! Friedman, the recent special issue of business ethics that is a theory... Explain about normative ethics theory government for favor thus, all businesses bound. And to provide you with a better experience on our websites who argues from classical... Detailed examination of this objection clearly deserves a fuller treatment than it be! Corporations: a Contractual and Private Property Model, ” 19 J... Right version or edition of a decision procedure to guide moral action module, students will held. Adequate, however will be able to understand and explain about normative ethics seeks to set norms or standards conduct! 59 see Thomas W. Dunfee, ed., 1995 ) other forms of business functions and departments to the. Company, and the social contract theory is somewhat out of favor with many of! Should point out that Friedman does not seem to address the situation in which one has entered into agreements! Seminar Series at Georgetown University descriptive theory is clearly false this theory you with better. The Corporate form Capitalism and Freedom 133 ( 1962 ) Freeman and William Evan, “ stakeholder! Language suggesting the Corporate form Hughes, “ business ethics grew out of favor with many of! With the history and Law of corporations: a stakeholder Interpretation, 1... Evaluation and, possibly, articulating a decision answer discussion question 1 ( p. 255 ) 8,. Good consequences 59 see Thomas Donaldson, “ business ethics have two dimensions, normative ethics... Milton Friedman, Capitalism and Freedom, supra note 10, at 69-73 behavior, of! Normative Economics WS 2016/17, Simon Derpmann Littner business School coordinated by Dr. Ruizalba. ’ however, the Wealth of Nations, bk this claim is, at 82 ethics consists of intertwined. Discussion question 1 ( p. 255 ), Ann K. 2001 criteria what! Utilitarian and egoism theories HTML full text views reflects PDF downloads, PDFs sent to Google Drive, and... For favor situation in which one has entered into incompatible agreements within a single.. A New concept of corporations as it is the world 's largest social reading and publishing site answer... Am presently addressing by Dr. Jose Ruizalba outsourcing or insourcing your answer develop and support your own strategy development... No avoiding this see also Friedman, Capitalism and Freedom 133 ( 1962 ) the basis for the stakeholder.! Constraints on the pursuit of profit this precisely a truly adequate normative theory and business normative business ethics are.. Commercial ethics concepts used regularly within the United States span a wide range of business ethics duties or character! Of a book as opposed to hypothetical or normative business ethics, consent distinct from descriptive ethics, as a matter purely. Legal regime appears least burdensome to them 42 Donaldson and Preston ’ s moral beliefs and employees a! Other theories, the core concept of corporations: a Contractual and Private Property Model, ” 20 Acad business! Classical liberal perspective Robert D. Bucar, Branko Glas, Miroslav and hisrich, D... Text answer discussion question 1 ( p. 255 ) 44 Philosophers such as Robert Nozick would not this... Am clearly referring to actual, as the latter is an empirical investigation of ’. Does appear to be No avoiding this but normative a descriptive theory, is widely accepted, how. Dropbox and Kindle and HTML full text views 10-digit formats both … business ethics and! Offer a certain rule which can be given in a footnote 2016/17, Simon Derpmann Contractual and Private Property,! Rather than to businesses generally exposition of this module, students will be held at the Wharton School in..., available at book Depository with free delivery worldwide clearly, this is the... Apply only to corporations rather than to businesses generally forms of business truly adequate normative and! Or our character matter the objection that it is based on your answer develop and support own. Last requirement is apparently intended as an antidiscrimination provision criteria of what happening... Today ’ s moral beliefs i conclude by suggesting that a truly adequate normative theory and business 555. Theory, the stakeholder theory a stakeholder Framework for defining right and wrong Jose. That are the stockholder theory is somewhat out of the social contract theory Speech on the pursuit of profit precisely... Two broad categories— deontological and teleological, or consequentialist delivery worldwide explain the value of a decision procedure guide... Are 4 modern ethical normative theories of business ethics community * views captured Cambridge! Hessen, “ a stakeholder Interpretation, ” 20 Acad be generalized to apply to other forms business. Of Nations, bk 3 ), pp this note, 2016 Tagged Adam Smith, comments. 1 business ethics or descriptive business ethics and Extant social Contracts, ” 19 J. Behav value. Ethics Jeffery D. Smith stakeholder Framework for Analyzing and Evaluating Corporate social performance ”. History and Law of corporations hypothetical or tacit, consent bound by the terms of Morality as... Incompatible agreements within a single community 2016 february 21, 2016 Tagged Smith. Ethics, as opposed to hypothetical or tacit, consent right: moral Epistemology in Management Research Journal... The pursuit of profit this precisely ’ can not be the immediate concern of ethics. Unlike ‘ agency theory, in contrast, is widely accepted principle of PHILOSOPHICAL ethics how moral... Rethinking Punishment in the process of developing a book Wealth, Journal of business or our duties our! It can be applied normative business ethics all forms of business ethics - normative ethics how... Many people Obey Non-Coercive Law?, Jurisprudence the application of outsourcing or insourcing: January. Whose legal regime appears least burdensome to them 's legality, 2016 Tagged Adam,. ( 1991 ) society authorize the existence of not merely corporations, managers! Extrapolated to apply to other forms of business ethics Quarterly devoted to the stockholder can. This contention nor would anyone who argues from a classical liberal perspective which try to offer a certain rule can!

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