VelasquezEighth

editionChapter1EthicsandBusinessCopyright?2018,2013,2007PearsonEducation,Inc.AllRightsReservedLearningObjectives1.1

Analyzethebasicnatureofbusinessethics1.2

Emphasizetheimportanceofmoralreasoningandmoraldecision-makinginbusinessethics1.3

Examineethicalissuesarisingfromglobalizationandinternationalbusinessconnectionsandpractices1.4

Explainthedeepfoundationsandstructureofmoralreasoning1.5

AssessthefactorsthatdefineandrefinetheconceptofmoralresponsibilityIntroduction:EthicsandBusinessKeyQuestionstobeExplored:Definitionofethics.Studyofrightandwrong.Applicationofethicaltheoriestobusiness.Definitionofbusinessethics.Processforpreparingtodiscussbusinessethics.Conceptualframeworks.Moralprinciples.Methodsofmoralreasoning.Errorsinmoralreasoning.1.1:TheNatureofBusinessEthics(1of2)1.1:AnalyzethebasicnatureofbusinessethicsWhatisethics?Principlesofconduct.Personalrules.Studyofmorality.EthicsasinvestigationItdoesn’tsimplytellyouwhatisrightorwrong,butinvestigateswhattheseconceptsmean.1.1.1:Merck&Co.,Inc.WhatwastheethicaldilemmafacingMerck&Co.,Inc.?Whethertodevelopadrugthatcouldhelpmillionsofpeople,butlosemoney.Merckchosetodevelopthedrug,whichiteventuallyhadtogiveaway.1.1:TheNatureofBusinessEthics(2of2)Whatwasafurtherconsequenceoftheriverblindnessstory?Merckdevelopedprogramstohelpdistributethedrug,andtoextendtheprogramtoincludetreatmentofarelateddisease.1.1.2:ClarifyingEthicalIssuesWhyshouldbusinessesbeethical?Competitiveadvantage.Merckstory.Whyaren’tallbusinessesethical?Somepeoplethinkit’sbettertobeunethicaliftheycangetawaywithit.Somepeopledon’tknowhowtomakesenseoftheirethicalchoices.1.2:MoralReasoningandMoralDecisionMaking(1of7)1.2:Emphasizetheimportanceofmoralreasoningandmoraldecision-makinginbusinessethicsWhatismorality?Thestandardsthatanindividualoragrouphasaboutwhatisrightandwrong,orgoodandevil.1.2.1:BFGoodrichWhatisthedifferencebetweenthedecision-makingprocessintheMerckcaseandtheoneinvolvingBFGoodrich?BFGoodrich’sdecision-makingwasbasedonwhatwouldbenefitthecompany.WhatmoralstandardswerereflectedintheBFGoodrichemployeesinterviewedaboutthecase?Onebelievedthatasanengineer,hehadanobligation“todoyourbest,nomatterwhatitcost.”Anotherbelievedthatitwaswrongtolieandtoendangerthelivesofothers,andhealsobelievedthatintegrityisgood,anddishonestyisbad.1.2:MoralReasoningandMoralDecisionMaking(2of7)1.2.2:MoralandNonmoralStandardsandNormsDefiningamoralstandard:Whatwebelieveismorallygoodormorallybad.Normsexpressedasrulesaboutouractions.Thesourcesofmoralstandards:Family,friends,andvarioussocietalinfluences.Reflectionuponourmoralstandards.Examplesofnonmoralnorms:Etiquette.Rulesofbehavior.Law.Languagestandards.1.2:MoralReasoningandMoralDecisionMaking(3of7)Sixcharacteristicsofmoralstandards:Coverseriousmatters,Preferredoverothervalues,Areindependentofauthority,Areuniversal,Areimpartial,Enlistspecialvocabularyandemotions,Table1.1:MoralversusNonmoralNormsGroup1Group2“Donotharmotherpeople.”“Donoteatwithyourmouthopen.”“Donotstealwhatbelongstoothers.”“Donotchewguminclass.”“Donotlietootherpeople.”“Donotwearsocksthatdonotmatch.”1.2:MoralReasoningandMoralDecisionMaking(4of7)1.2.3:RefiningtheConceptofEthicsEthicalstandardsrequiregoodreasonsforonetoholdthem.Twowaystoapproachethics:Descriptively.Prescriptively.Whichofthefollowingtwoquestionsenlistsadescriptiveapproach,andwhichenlistsaprescriptiveapproach?“DoAmericansbelievethatbriberyiswrong?”[Descriptive]“Isbriberywrong?”[Prescriptive]Businessethicsstudiesmoralstandardsasappliedtobusiness.Businessethicsissuescanbesortedintosystemic,corporate,andindividualissues.1.2:MoralReasoningandMoralDecisionMaking(5of7)1.2.4:ApplyingEthicalorMoralConceptstoCorporationsCorporatepersonhood.Corporationsdonotqualifyasmoralagents.So,theycannotbemorallyresponsibleforwhattheydo.Corporationsarelikemachinesinsomeways,andsonotresponsibleforwhattheydo.Corporationscanbesecondarilyorderivativelymorallyresponsiblefortheiractions.1.2.5:ObjectionstoBusinessEthicsArgumentsagainstbusinessethics:Freemarketbuildsinethics.Employeeloyalty.Law.1.2:MoralReasoningandMoralDecisionMaking(6of7)Objectionstoargumentsagainstbusinessethics:Thereisno“perfectlycompetitive”condition.Increasingprofitsdonotnecessitatesocialbenefit.Noteveryonevaluesthesamethings.1.2.6:TheCaseforEthicsinBusinessThecaseforbusinessethics.Businessesrequireethicalemployees.Businessesrequireanethicalsociety.1.2:MoralReasoningandMoralDecisionMaking(7of7)1.2.7:BusinessEthicsandCorporateSocialResponsibilityCorporateSocialResponsibility(CRS)Acorporation’sresponsibilitiesorobligationstosociety.Shareholderview(Friedman).Stakeholderview(FreemanandReed).Twotypesofargumentsinsupportofstakeholderview:Instrumental.Normative.1.3:EthicalIssuesinInternationalBusiness(1of3)1.3:ExamineethicalissuesarisingfromglobalizationandinternationalbusinessconnectionsandpracticesTechnologyandGlobalizationTypesofnewtechnologies.Significantissuesininternationalbusinessandnewtechnologies.Globalization.1.3.1:TechnologyandBusinessEthicsEthicalissuesraisedthroughtechnologicaladvancementsIndustrialandagriculturalrevolutions:Labor,fairtrade,deceptionandstockmanipulation.Informationtechnology:risk,privacy,andpropertyrights.Nanotechnologyandbiotechnology:riskanddangerousproducts.1.3:EthicalIssuesinInternationalBusiness(2of3)1.3.2:GlobalizationandBusinessEthicsGlobalizationLargelydrivenbymultinationals.Benefitstodevelopingcountriesincludingjobs,skills,income,technology,adecreaseinpoverty,specialization.Blamedfor,e.g.,risinginequality,culturallosses,a“racetothebottom,”introductionofinappropriatetechnologiesintodevelopingcountries.Differencesinlaws,governments,practices,levelsofdevelopment,andculturalunderstandingsraiseethicalproblems,whichsuggestsethicalrelativism.Criticismsofethicalrelativism:Somemoralstandardsarefoundinallsocieties.Moraldifferencesdonotlogicallyimplyrelativism.Relativismhasincoherentconsequences.Societalstandardsarenotabovecriticism.1.3:EthicalIssuesinInternationalBusiness(3of3)1.3.3:IntegrativeSocialContractsTheoryIntegrativesocialcontractstheory:Hypernormsshouldapplytopeopleinallsocieties.Microsocialnormsapplyonlyinspecificsocietiesanddifferfromonesocietytoanother.1.4:FoundationsofMoralReasoning(1of4)1.4:ExplainthedeepfoundationsandstructureofmoralreasoningKeygoals:Examinationofmoralstandardsandthereasoningprocessbywhichsuchstandardsareappliedtoissues.Descriptionofthedevelopmentofone’scriticalcapacitiesoverone’slifetime.Descriptionofreasoningprocessesusedtoevaluatemoralstandards.1.4.1:MoralDevelopment

Kohlberg’sstagesofmoraldevelopment:PreconventionalOrientationsPunishmentandObedience.InstrumentalandRelative.ConventionalOrientationInterpersonalConcordance.LawandOrder.1.4:FoundationsofMoralReasoning(2of4)PostconventionalOrientationSocialContract.UniversalMoralPrinciples.CriticismsofKohlberg’sview:Feministandcareethicscritiques.1.4.2:TheStructureofMoralReasoning

Moralreasoninginvolves:Moralstandardsforevaluation.(Belogical.)Informationaboutwhatisbeingevaluated.(Relyonevidenceorinformationthatisaccurate,relevant,andcomplete.)Moraljudgmentaboutwhatisbeingevaluated.(Beconsistent.)1.4:FoundationsofMoralReasoning(3of4)1.4.3:StepstoEthicalBehavior

Stepstoethicalbehavior:Awareness.Judgment.Decision.Action.Recognizingasituationasethical:Requiresframingitasonethatrequiresethicalreasoning.Involvesseriousharmthatisconcentrated,likely,proximate,imminent,andpotentiallyviolatesourmoralstandards.Obstaclestorecognizingasituationisethicalinclude:Euphemisticlabeling,rationalizingouractions,diminishingcomparisons,displacementofresponsibility,diffusionofresponsibility,disregardingordistortingtheharm,dehumanizingthevictim,andredirectingblame.1.4:FoundationsofMoralReasoning(4of4)Judgingtheethicalcourseofaction.AvoidthreeformsofbiasedtheoriesOrganization.Judgingtheethicalcourseofactionoftendependson:Theethicalclimateoftheorganization.Theethicalcultureoftheorganization.Actingonadecisiondependson:Egostrength.Lossofcontrol.Responsetoauthority.Figure1.2:TheFourStepsLeadingtoEthicalBehavior1.5:MoralResponsibilityandBlame(1of3)1.5:Assessthefactorsthatdefineandrefinetheconceptofmoralresponsibility

Clarityaboutwhat’sinvolvedinmoralreasoning:Responsibility.Accuracy.Appropriateemotions.Accountability.1.5.1WhenisaPersonMorallyResponsible?

Criteriaformoralresponsibilityforinjuriesorwrongs:Causality.Knowledge.Freedom.1.5:MoralResponsibilityandBlame(2of3)1.5.2:MitigatingFactors

Moralresponsibilityismitigatedby:Minimalcontribution.Uncertainty.Difficulty.Moralresponsibilityisnotmitigatedby:Thecooperationofothers.Followingorders.1.5.3:MoralResponsibility:EssentialPoints

EssentialpointsofresponsibilityCausation.Knowledge.Freedom.1.5:MoralResponsibilityandBlame(3of3)MitigationofmoralresponsibilityMinimalcontributiontotheact.Uncertainty.Coercionorthreat.Seriousnessofthewrong.1.5.4:ResponsibilityforCorporateActions

CorporatemoralresponsibilityIndividualCorporationCaseStudy1.1:SlaveryintheChocolateIndustryChildslaveryinIvoryCoasttofarmcocoabeans.U.S.chocolatecompaniespurchasethecocoabeansfromIvoryCoast,knowingthatslaveryisinvolved.PressureLeadstoAction

PressurefromU.S.legislatorsledtochocolatecompaniescommittingtoreforms.FarfromAchievingGoals

Asof2010,noprogressonacertificationsystemreachedconclusion.MixedResponses

Somecocoaisnowcertified“slave-free,”butmostcocoafromIvoryCoastisnot.CaseStudy1.2:AaronBeamandtheHealthSouthFraud(1of2)AaronBeamandRichardScrushyfoundedHealthSoundin1984.Thecompany’sprofitabilitywasmisrepresented.In1986,thecompanywentpublic.BeamandScrushybecameverywealthy.HidingaShortfalltoAppearProfitable

From1986-1996,HealthSoundgrewtobea$3billionFortune500company.Overthenextnear,thecompany’squarterlyearningsrepeatedlyfellshortofWallStreetanalysts’expectations.Thecompanycontinuedtofalsifyearningsreports.Beamretiredin1997.CaseStudy1.2:AaronBeamandtheHealthSouthFraud(2of2)InvestigationandOutcome

TheFBIbeganinvestigatingHealthSoundin2003.ScrushywasnotconvictedofwrongdoingintheHealthSoundcase,butwaslaterconvictedofbriberyinanunrelatedcaseandwassentencedtosevenyearsinprison.Scrushylosta$2.8billioncivillawsuitbroughtbyHealthSoundshareholders.BeamblamedScrushyformuchofwhathappenedatHealthSound.Summary:EthicsandBusinessDefinitionofethics.Definitionofbusinessethics.Objectionstostudyingbusinessethics.Moralreasoning.Keyrequirementsofethicalbehavior.Actionsandagents.VelasquezEighth

editionChapter2EthicalPrinciplesinBusinessCopyright?2018,2013,2007PearsonEducation,Inc.AllRightsReservedLearningObjectives2.1

Examinethefoundationsofmoraldecision-makinginbusiness2.2

Detailtheconceptofutilitarianismandhowitisappliedtobusinessdecisions2.3

Examinearights-basedapproachtobusinessethics2.4

Explainjusticeandfairnessaskeyethicalprinciples2.5

Analyzeanethicofcareasappliedtobusinessdecisionsandpractices2.6

Evaluateanapproachtobusinessethicsthatcombinesfourmainmoralstandards2.7

Relatevirtueethicstomoraldecision-makinginbusiness2.8

Differentiateunconsciousandconsciousmoraldecision-makingprocessesandimplicationsIntroduction:EthicalPrinciplesinBusiness

KeyQuestionstobeExplored:Approachestodiscussingmoraldecision-makinginthebusinessworld.Approachestodiscussinghowmoraljudgmentsformthebasisforethicalprinciplesinbusiness.2.1:ApproachestoMoralDecisionMaking2.1:Examinethefoundationsofmoraldecision-makinginbusinessMoraldecision-makingclarifiesethicalissues.Strengthsandweaknessesofeachapproachtomoraldecision-making.2.1.1:UnocalandBurmaEthicalissuesinUnocaldecision-makingprocess.Cost-benefitanalysisforcompanyandhostcountry(Burma).ExistinghumanrightsissuesinBurma.2.2:Utilitarianism:WeighingSocialCostsandBenefits(1of4)2.2:DetailtheconceptofutilitarianismandhowitisappliedtobusinessdecisionsEthicalframeworkenlistedbyUnocalinitsdecision-makingprocess.Utilitarianism.2.2.1:UtilitarianismandFordMotorCompany’sPintoThecentralFordPintoethicalerror:Theychosetoignoreadangerousdesignfeature.2.2.2:TraditionalUtilitarianismBenthamandMillFoundersoftraditionalutilitarianism.Asignificantfeatureofutilitarianism:Itattemptstoprovideethicalprinciplethatservesasapubliclyacceptablebasisfordeterminingthebestsocialpolicies,aswellastheethicallybestcoursesofaction.2.2:Utilitarianism:WeighingSocialCostsandBenefits(2of4)Theutilitarianethicalprinciple:Theethicalactionistheonethathadthemostbeneficialconsequencesforsocietyorthatatleastminimizedtheharmfulconsequences.Mill:“Actionsarerightinproportionastheytendtopromotehappiness,wrongastheytendtoproducethereverseofhappiness.”2.2.3:TheAdvantagesofUtilitarianismAdvantagesofutilitarianismItadvocatespoliciesthatprovidethegreatestbenefits.Itimpartiallyconsiderseveryone’sinterests.Itexplainswhysomeactivitiesarerightorwrong.2.2:Utilitarianism:WeighingSocialCostsandBenefits(3of4)2.2.4:Utilitarianism’sMeasurementProblems

Someofutilitarianism’smeasurementproblemsUtilityissubjectiveandcomparisonsaredifficult.Somebenefitsandcostsseemimpossibletomeasure.Benefitsandcostsareunclear.Itassumesthatallgoodsarecommensurable.2.2.5:UtilitarianRepliestoMeasurementObjections

Utilitarianjustifiesitsdecision-makingprocessbyclaimingit:Focusesonmoralestimates,notabsolutes.Appealstointrinsicandinstrumentalgoods.Distinguishesbetweenwantsandneeds.Quantifiesvalueinmonetaryterms.2.2:Utilitarianism:WeighingSocialCostsandBenefits(4of4)2.2.6:UtilitarianProblemswithRightsandJustice

Someproblemswithutilitarianism:Itdoesnottakeintoaccounthowevenlyutilityisdistributedamongmembersofasociety.Itdoesnottakeintoaccountthenegativeimpactontherightsofthosenegativelyimpactedbyitscalculus.2.2.7:UtilitarianRepliestoObjectionsonRightsandJustice

Rule-utilitarianismLimitstheutilitariananalysistomoralrules.Determinesthecorrectnessofarulebythetotalutilityproducedbeinggreaterthanitwouldbeotherwise.Assumeseveryonefollowsthatrule.2.3:RightsandDuties(1of2)2.3:Examinearights-basedapproachtobusinessethicsUnocalofferedautilitariandefenseofitsdecision.Theutilitariandefensedidnotaddresscriticismsofrightsviolations.2.3.1:HumanRightsandWaltDisneyCompany’sSupplierDisneystockholdersrespondedtoamoralproblem.Iturgedthecompanytoadopt11widelyacceptedprinciplesofhumanandlaborrights.2.3.2:TheConceptofaRightArightisanentitlementToactinacertainway.Tohaveothersactinacertainwaytowardtheright-holder.2.3:RightsandDuties(2of2)2.3.4:ABasisforMoralRights:ImmanuelKantKant’scategoricalimperativeandrights.TheCIrequiresthatpeoplebetreatedequally.Thisrequirementallowspeopletoclaimequaltreatmentastheirright.TheCIcommandsrespectforeachperson’sfreedomandrationality.TheCIcommandsconsentfromfreeandrationalbeings.TheCIcommandsthatwecontributetoeachperson’sabilitytopursuetheirfreelyandrationallychosenends.2.3.6:RobertNozickandTheLibertarianObjectionEssentialelementsofNozick’slibertarianism.Therighttofreedomrequiresprivateproperty,freedomofcontract,freemarkets,andtheeliminationoftaxestopayforsocialwelfareprograms.2.4:JusticeandFairness(1of2)2.4:ExplainjusticeandfairnessaskeyethicalprinciplesUnocalandtheBurmesegovernment2.4.1:WagesintheFastFoodIndustryJusticeandfastfoodwagesWhatisalivingwage?2.4.2:StandardsofJusticeandFairnessJusticeandfairnessinbusinessdisputesDiscrimination,favoritism,andunfairworkloads.Formsofjusticetypicallydeployedtoredressorpreventinjustice.Distributivejustice.Retributivejustice.Compensatoryjustice.2.4:JusticeandFairness(2of3)2.4.3:DistributiveJusticeDistributivejusticeJusticethataimstofairlydistributebenefitsandburdens.Figure2.1

SummaryofPrinciplesofDistributiveJustice2.4:JusticeandFairness(3of3)2.4.4:RetributiveJusticeRetributivejusticeJusticeofblamingorpunishingwrongdoers.2.4.5:CompensatoryJusticeCompensatoryjusticeThejusticebywhichawrongedpersonisrestoredtohisorherinitialcondition.2.5:AnEthicofCare(1of2)2.5:AnalyzeanethicofcareasappliedtobusinessdecisionsandpracticesCareethicsrequireswepayattentiontoconcrete,valuablerelationships2.5.1:MaldenMillsCompanyMaldenMillstextilefactoryburneddown.OneoftheremainingtextilemillsinoperationinNewEngland.Ownercouldhavecollected$100millionininsurance.2.5.2:PartialityandCareMaldenMillsstoryreflectsanethicofcare.Ownerdidnotshutdownfactoryafteritburneddown.Ownerdidnotmoveoperationstoanothercountry.Ownerpaidemployeeswhilefactorywasbeingrebuilt.2.5:AnEthicofCare(2of2)2.5.3:CriticismsofanEthicofCare

CareethicsReflectsunjustfavoritism.Issodemandingthatitleadstoburnout.2.6:IntegratingUtility,Rights,Justice,andCaring(1of2)2.6:Evaluateanapproachtobusinessethicsthatcombinesfourmainmoralstandards

Distinctivestandardsofutility,rights,justice,andcareAnalysesofcostsandbenefitsofusingresources.Prescriptionsforhowindividualsshouldbetreated.Prescriptionsforhowburdensandbenefitsshouldbedistributed.Prescriptionsforwhatweowetothosewithwhomwehavespecialrelationships.2.6.1:TheFourMoralConsiderationsandBehavior

Elementsofthefourmoralmodelsasblueprintsforbehavior.Maximizingbenefitsandminimizingharms.Respectformoralrights.Promotionofjustdistributionofbenefitsandburdens.Exhibitingappropriatecare.Figure2.2

TheProcessofMakingaMoralJudgment2.6:IntegratingUtility,Rights,Justice,andCaring(2of2)2.6.2:RelatingMoralStandardstoEachOther

Moralstandardsrelatetoeachotherwhenmoraljudgmentsarebasedon:Maximizingtheaction’snetutility.Respectingmoralrights.Ensuringjustdistributionofbenefitsandburdens.Caringforthoseinconcreterelationstous.2.7:AnAlternativetoMoralPrinciples:VirtueEthics(1of2)2.7:Relatevirtueethicstomoraldecision-makinginbusiness

Virtueethicsasanalternativetotheprevioustheories.2.7.1:Vices,Virtues,andtheCEOofQwestCommunications

MoralvicesintheQwestcaseGreed.Cultureoffear.2.7.2:VirtueEthicsandAction-BasedEthicsTheJoeNacchiocaserevealsthemoralimportanceofcharacter.2.7.3:MoralVirtues

Moralvirtueasanacquireddisposition.Aristotle’sGoldenMeanisthereasonablemeanbetweenextremes(vices).Table3.1:MoralVirtuesandVicesAccordingtoAristotle

TheEmotionorActionInvolvedTheViceofExcessintheEmotionorActionPercentageofTotalU.S.FinancialWealth(2012)TheViceofDeficiencyintheEmotionorActionFearRecklessnessCourageCowardlinessPleasureSelf-indulgenceTemperanceSelf-deprivationTakingone’sdueInjustice:takingmoreJusticeInjustice:takinglessDonatingmoneyProdigalityGenerosityStinginessSpendingmoneyOstentatiousnessRefinementCheapnessFeelingadmiredVanityConfidenceSelf-abasementSeekinghonorOver-ambitionAmbitionUnambitiousnessAngerIrascibilityGoodtemperApathyShameSelf-consciousnessSelf-esteemArroganceTalkingaboutoneselfBoastfulnessHonestyFalsemodestyEntertainingpeopleBuffooneryWittinessBoorishnessSocializingObsequiousnessFriendlinessQuarrelsomeness2.7:AnAlternativetoMoralPrinciples:VirtueEthics(2of2)2.7.5:Virtues,Actions,andInstitutions

Virtueethicsanddecision-makingTherightnessorwrongnessofanactioninrelationtoagent’svirtuesandvices.2.7.6:StudyingVirtueTheoryintheRealWorld

Virtuetheorydoesn’tseemconsistentwithpsychology.2.7.7:VirtuesandPrinciples

Virtueethicsandutilitarianism,rightstheories,justicetheories,andcaretheories.Characteremphasizedoveraction.2.8:UnconsciousandConsciousMoralDecisions2.8:Differentiateunconsciousandconsciousmoraldecision-makingprocessesandimplications

Unconsciousdecision-makinginfluencesusonadailybasis.2.8.1:X-SystemandC-SystemProcesses

X-andC-SystemprocessesTermsofunconsciousandconsciousmoraldecision-makingprocesses.2.8.2:TheLegitimacyofUnconsciousMoralDecision-Making

Casuistryasanunconsciousmoraldecision-makingprocess.2.8.3:CulturalInfluencesandIntuition

Examplesofmoralintuition“Hardwiredintuitionsseemtoincludethefollowing:incestiswrong;harmingbyactionisworsethanharmingbyomission;harmingasameanstoagoalisworsethanharmingasaforeseensideeffect;harmingbyphysicalcontactisworsethanharmingwithoutphysicalcontact.”CaseStudy2.1:TraidosBankandRoche’sDrugTrialsinChinaTriodos’sixprinciplesofmoraldecision-makingPromotesustainabledevelopment.Respectandobeythelaw.Respecthumanrights.Respecttheenvironment.Beaccountable.Continuouslyimprove.ResponsestotheBank'sDecisionRoche’sdilemmaThemoralproblemoffsetbythepracticalitiesofsellingtheresultingdruginChina.CaseStudy2.2:TestingDrugsintheDevelopingWorldConcernsabouttestingdrugsinthedevelopingworld.Vulnerabilitytoexploitation.TheProblemofFindingWaystoTestDrugsLimitationsondrugcompanies.Opportunitiesfortesting.Summary:EthicalPrinciplesinBusinessPrimaryapproachestomoraldecision-making.Utilitarianism.Rights.Justice.Care.VelasquezEighth

editionChapter3TheBusinessSystem:Government,Markets,andInternationalTradeCopyright?2018,2013,2007PearsonEducation,Inc.AllRightsReservedLearningObjectives3.1

Explaintheimpactofglobalizationonthebusinesssystem3.2

AnalyzeJohnLocke’stheoryofnaturalrightsasitrelatestofreemarkets3.3

AssesskeyargumentsassociatedwithAdamSmith’sutilitarianviewoffreemarkets3.4

Analyzecomparativeadvantageasafoundationforfreetradeamongnations3.5

InterpretMarxistviewsontheimpactonworkersoffreetradeandfreemarkets3.6

ExplainthemixedeconomyandredefinitionsofpropertythataffectthebusinesssystemIntroduction:TheBusinessSystem:Government,Markets,andInternationalTrade BusinesssystemGovernmentMarketsInternationaltradeTypesofmarketsIndustrialLaborWholesaleRetail3.1:GlobalizationandtheBusinessSystem(1of2)3.1:ExplaintheimpactofglobalizationonthebusinesssystemTheoristsdebatethefunctionofabusinesssystem.Utilitarianismvs.socialismTheoristsdebatethebenefitsofglobalization.

Whethernationsshouldtradefreelyorbesubjecttorestrictions.3.1.1:EconomicSystemsEconomicsystemThesystemusedtoprovidegoodsandservices.TwobasictasksProducinganddistributinggoodsandservices.SocialdevicesTraditions,commands,andmarkets.3.1:GlobalizationandtheBusinessSystem(2of2)3.1.2:MarketTheoryandMarketPracticeSwinglineManufacturesstaplesandrelatedproductsAbbottLabsPharmaceuticalcompanyWhatethicalissuesariseasaresultofthesecompanies’businesspractices?3.2:FreeMarketsandRights:JohnLocke3.2:AnalyzeJohnLocke’stheoryofnaturalrightsasitrelatestofreemarketsNaturalrightsandafreemarketeconomyFreedomtoexchangegoodsandservices.Freedomtoownproperty(freedomfromgovernmentalinterference).3.2.1:InterpretingJohnLockeLockeandthefreemarketAssumptionsandfailures3.2.2:CriticismsofLockeanRightsSomemajorcriticismsofLocke’sNaturalRightsTheory.Table3.1:DistributionofIncomeandWealthamongAmericanHouseholds,2013

GroupPercentageofTotalU.S.Income(2013)PercentageofTotalU.S.FinancialWealth(2012)PercentageofTotalU.S.NetWorth(2013)AverageNetWorth(2013)PercentageofTotalU.S.Stock(2012)Top1%19.842.736.7$18,623,90038.3Top20%

61.893.088.9$2,260,30091.1Second20%17.86.89.3$236,4006.4Third20%11.11.32.7$68,1001.9Bottom40%9.4-1.0-0.9-$10,80006Figure3.1

RisingU.S.Inequalitysince1973asmeasuredbytheGiniIndex.Figure3.2

IncreasingHouseholdInequality1974-2013.Figure3.3

IncreasingHouseholdInequality1974-2013.3.3:FreeMarketsandUtility:AdamSmith(1of2)3.3:AssesskeyargumentsassociatedwithAdamSmith’sutilitarianviewoffreemarketsAdamSmith:Freemarketsandtheutilitarianargument3.3.1:TheInvisibleHandofMarketCompetitionThe“InvisibleHand”:Supplyanddemandguidesthefreemarket.3.3.2:GovernmentPlaysNoRoleInSmith’stheory,thegovernmentroleistostayoutoftheway.3.3:FreeMarketsandUtility:AdamSmith

(2of2)3.3.3:InterpretingAdamSmithResourceallocation:AccordingtoMisesandHay