1. Chapter 7 Ethics and Social Responsibility of Business

4. Moral Theories and Business Ethics Ethical Relativism Ethical Fundamentalism Utilitarianism Kantian Ethics Rawls’s Social Justice Theory

15. Theories of Ethics – Summary (1 of 2) A set of universal rules establishes ethical duties. The rules are based on reasoning and require (1) consistency in application and (2) reversibility. Kantian ethics Persons choose the alternative that would provide the greatest good to society. Utilitarianism Persons look to an outside source or central figure for ethical guidelines. Ethical fundamentalism Description Theory

16. Theories of Ethics – Summary (2 of 2) Individuals decide what is ethical based on their own feelings as to what is right or wrong. Ethical relativism Moral duties are based on an implied social contract. Fairness is justice. Rules are established from an original position. Rawls’s social justice theory Description Theory

19. Ethics Brief Corporations that conduct social audits will be more apt to prevent unethical and illegal conduct by managers, employees, and agents.

23. Theories of Social Responsibility Maximizing Profits Moral Minimum Stakeholder Interest Corporate Citizenship

28. Other Stakeholders of a Business Customers Employees Suppliers Local Community Creditors

31. Theories of Social Responsibility – Summary To do good and solve social problems Corporate citizenship To consider the interests of all stakeholders, including stockholders, employees, customers, suppliers, creditors, and local community. Stakeholder interest To avoid causing harm and to compensate for harm caused. Moral minimum To maximize profits for stockholders. Maximizing profits Social Responsibility Theory