Assignment 2

Assignment 2 - Provide question with an answer.

Question 1 : What are the three ethical decision criteria ?

Answer :

An individual can use three different criteria in making ethical choices. The first main point is the utilitarian criterion, in which decisions are made solely on the basis of their outcomes or consequences. The goal of utilitarianism is to provide the greatest good for the greatest number. The view tends to dominate business decision making. It is consistent with goals like efficiency, productivity, and high profits. 

The second main point for ethical criterion is to focus on rights. This calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents such as the Bill of Rights. An emphasis on rights in decision making means respecting and protecting the basic rights of individuals, such as the right to privacy, to free speech, and to due process.

And the last main point for ethical criterion is to focus on justice. This requires individuals to impose and enforce rules fairly and impartially so that there is an equitable distribution of benefits and costs. Union members typically favor this view. It justifies paying people the same wage for a given job, regardless of performance differences, and using seniority as the primary determination in making layoff decisions.

Each of these criteria has their advantages and liabilities. A focus on utilitarianism promotes efficiency and productivity, but it may result in ignoring the rights of some individuals. It particularly those with minority representation in the organization. The use of rights as a criterion protects individuals from injury and it is consistent with freedom and privacy, but it can create an overly legalistic work environment that hinders productivity and efficiency. A focus on justice protects the interests of the underrepresented and less powerful, but it can encourage a sense of entitlement that reduces risk taking, innovation, and productivity.

Question 2 : What are the relationship between Business Ethics and Corporate Governance ?.

Answer :

Business ethics and corporate governance are two significant factors that impact a company and on how it operates. Business ethics represent the values, principles or characteristics that a company must follows when conducting a business. Corporate governance is the internal framework that a company designs and implements to govern and protect those invested into the company. The relationship between ethics and governance comes from an organization’s owner or executive managers, who create the governance and decide which ethical principles employees will follow.

Business ethics typically follow a normative theory, where the theory states that individuals and firms must follow the ethical principles that are commonly found in society, which is the term normative, or standard, ethics. This three normative ethic theories include stockholder, stakeholder, and social contract theories. The stockholder ethical theory states that a company should create a relationship between business ethics and corporate governance that focuses on stockholders. Managers will create a strategies and activities that advance or increase the investments of share holders.

For stakeholder theory of ethics, business ethics and corporate governance focuses on anyone who has a stake in the business. Although it was a wide range connection,it is stronger, as recent changes to corporate governance include now any individual who is affected by the company. It ensures that everyone receives equal or fair treatment when dealing with the business.

The third and final ethical theory is the social contract theory. It focuses on companies that improve the overall welfare of society. Shareholders may be less willing to invest money into a company that follows this ethical theory due to the shareholders may lose money to causes or other benefits that are outside of the company’s normal operating context. To make investors fully aware of the company’s social contract theory of ethics, business owners, executives and board members will often include this information in the corporate governance.

Another relationship between business ethics and corporate governance is a company’s mission statement. The mission statement clearly outlines a company’s planned standard of excellence for operating in the business environment. This mission statement can focus more on a social aspect of the operations rather than a profit motive to repay shareholders.For companies that using this types, shareholders will invest in the company because they believe in the company and desire to see the company succeed in its social mission.

Sources : 

1. http://www.citeman.com/12962-criteria-for-ethical-decision-making.html
2. Business Ethics, writer Crane and Matten
3. http://www.wisegeek.com/what-is-the-relationship-between-business-ethics-and-corporate-governance.htm

Your writer,

Akeem Mohamad