Business Ethics: The Controversy

Amelia Kershner

Prof. Blair

MANA 6320

1-27-2015

Jan 20

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pp. 1-20 Intro, Donaldson/Wherhene

        The first part of the book titled Ethical Issues in Business a Philosophical Approach explains some fundamental moral reasoning theories to give the reader a background in order to better understand the scenarios discussed throughout the rest of the book.  The basis for ethical decision making is ambiguous.  People are shaped by their personal experiences which lead to their own unique process and outcome of moral reasoning.  Discussed are two fundamental methods of ethical reasoning and the driving factors of each.  Motivating factors include assessing the consequences, called consequentialism or determining what duties, rights, and obligations, known as deontology. Both major approaches are applicable to analyze ethical decision making and have subcategories.  Utilitarianism is a type of consequentialism and focuses on the outcome benefiting overall good for the majority.  The other type not as frequently endorsed is egoism which concentrates on the greatest overall good for the decision maker.  A subcategory of deontological reasoning is called “social contract” approach.  It focuses on general social principles that rational people would submit to and adopt and not on the individual.  Another theory discussed is virtue theory which states any ethical decision will fit into either category of consequentialism or deontology.  Part one of the book gives an overview of the first three chapters in the book which build on the introductions to each theory and examples are presented.  The study of ethics is defined to be what people should do not what they do. Moral philosophies give a foundation of how to base ethical decision but are controversial in how they are applied in business.  Differing arguments concerning ethics are presented throughput the text. For example, Friedman’s believes a business should only be concerned with making a profit, an obligation to society above that of its shareholders.  On the other hand, Freeman believes a business should weigh the interests of all of its shareholders equally and a mutual respect between parties.  Part one also gives an overview of how the different ethical reason theories are practiced and examples of each.  Also discussed are differing philosophies about truth telling and understanding the ethical implications of not being completely honest through different real world examples.  

Amelia Kershner

Prof. Blair

MANA 6320

1-27-2015

Jan 27

Business Ethics: The Controversy

p.34, Social Responsibility, Friedman

p.39, Stakeholders, Freeman

        Friedman wrote the article to explain the role of business in a free-enterprise system.  He has a sharp discontent with the way businessmen of the time speak of how a business should have a “social conscience” and states they are puppets preaching unadulterated socialism.  His central point is a business or its actor, the corporate executive, has the primary responsibility to make the most profits possible for its owner under the assumption that is in fact the owner’s goal.  An executive’s purpose is to act solely for the employer and use its resources within the law in free competition without deception.  A business does not have a social responsibility or obligation to involve itself with issues such as creating jobs, industry pollution control, or keeping the job market diverse to benefit society.   If this “soulless corporation” was to generate an outcome which would serve society its only reason for doing so would be for its own self interests.  These social responsibilities and any other responsibilities are not the burden of the business, but rather the individual.  For example, an individual can chose to enlist in the armed forces and fulfill his or her duty to society.  An executive is an individual but its sole responsibility is to serve the interest of its principle or stockholders and get the best return on their investment.  If an executive did not follow this principle and made decisions or allocated money in the interests of a social responsibility rather than the stockholder it would be socialism not capitalism.  He goes on to say not anything goes.  Businesses must operate ethically within the limits of the law or rules of the industry. Friedman’s philosophy is based on consequentialism, more specifically, ethical egoism.  In other words, the outcome should be in the best interest of one’s self.