Ethics slides for Ethical Decioin Making ,Theories in Business Ethics

Group # 6 1Presented To: Ma’am Rooma Qadeer

Course: Course: Business Ethics (MGT-208)Business Ethics (MGT-208)• 3.00 Credit Hours, Spring 2014, 3.00 Credit Hours, Spring 2014,

• Under-graduate ProgramUnder-graduate Program• Instructor: Ms. Rooma QadeerInstructor: Ms. Rooma Qadeer

• Program: BBAProgram: BBA• Final Project PresentationFinal Project Presentation

By: Zeeshan ButtBy: Zeeshan Butt


Dr. Keith Y.N. NgPh.D., MBA, MCIM

THINKING AND MANAGING ETHICALLY

The Business System: Government,

Markets And International Trade The Business System: Government,

Markets and International Trade

Business Ethics: Concepts

Globalization

Group # 6 Presented To: Ma’am Rooma Qadeer 5

Economic System

֎The system a society uses to provide goods and services it needs to survive and flourish.


Economic Systems

An economic system consisting the elements of the three economic systems:

– Tradition-based societies– Command economy– Market economy


Economic Systems Tradition-Based Societies

֎ Small and rely on traditional communal roles and customs to carry out the two basic economic tasks.

e.g. If CEO of CA Sports Is Ali but after his Death Next CEO Would Be His Son.

֎ Individuals are motivated by the community’s expression of approval or disapproval and the community’s productive resources - such as its herds are owned in common:

– e.g. wife shall cook, husband shall work, etc.Group # 6 Presented To: Ma’am Rooma Qadeer 8

Economic Systems Command Economy

֎ Based primarily on a government authority (a person or a group) making the economic decisions about what is to be produced, who will produce it and who will get it.

For Example: Government Introduce new policy in the Budget that the minimum wages of Employees should not be less than 9000 .So, CA Sports have to follow all the decisions taken by the Government.


Economic Systems Market Economy

֎An economic system based primarily on private individuals making the main decisions about what they will produce and who will get it.

For Example: CA Sports IS Owned Privately and Rune Privately.

֎Essentially on Supply and Demand– e.g. England in 19th century


Free Markets And Rights: John Locke

֎John Locke (1632-1704), an English political philosopher developed the idea that human beings have a “natural right” to liberty and a “natural right” to private property.

JOHN LOCKENIndividuals=Freedom +Property Right– Every one would be equal in every aspect


Locke’s State of Nature

֎All are free and equal– each individual would be equal to others– free from constraints

֎Each person owns his body and labor, and whatever he mixes his labor into.

֎People agree to form a government to protect their right to freedom and property.


Lockean Rights

֎ The right to life, liberty and property֎ Individuals have an absolute right to do

whatever they want with their property and the government has no right to interfere with or confiscate an individual’s private property even for the good of society (Fifth Amendment of US Constitution)– e.g. Land Acquisition Act Relating It (Lockean Rights) With Company:CA Sports as concern to this view government should protect their property +

freedom of trade by following this view.


Criticism of Lockean Rights

Locke’s critics focus on four weakness in his argument:1. The assumption that individuals have natural

rights: This assumption is unproven and assumes that the rights to liberty and property should take precedence over all other rights. If humans do not have the overriding rights to liberty and property, then the fact that free markets would preserve the rights does not mean a great deal.

2. The conflict between negative rights and positive rights: Why should negative rights such as liberty take precedence over positive rights? Critics argue, in fact, that we have no reason to believe that the rights to liberty and property are overriding.


Free Markets And Utility: Adam Smith

֎ Adam Smith (1723-1790), the “father of modern economics” is the originator of this utilitarian argument for free market.

ADAM SMITHSSociety= Maximum Benefit @Minimum

Cost֎ Invisible Hand: According to Adam

Smith, the market competition that drives self-interested individuals to act in ways that serve society.


Free Markets And Utility: Adam Smith

֎ In a competitive market, a multiplicity of private businesses must all compete with each other for the same buyers.

֎ To attract customers, each seller is forced to sell what the consumers want and to drop the price as low as possible.

֎ The competition produced by a multiple of self-interested private sellers serves to lower prices, conserve resources, and make producers respond to consumer desires.


Criticisms of Adam Smith

Smith's utilitarian argument is criticized for making unrealistic arguments:

֎ Smith assumes that monopoly does not exist.

– Forces of supply and demand will force prices down to their lowest levels.

֎ Smith assumes that all relevant costs are paid by manufacturer.

– Pollution is an example of using social resources without paying.


The Utility of Survival of the Fittest: Social Darwinism

֎ The doctrines of social Darwinism named after Charles Darwin (1809-1882), who argued that the various species of living things were evolving as the result of the action of an environment that favored the survival of some things while destroying others.

Social Darwinism=Economic Competition +Government Interference

= Progress in Economy.Relating (Social Darwinism) with Company:

CA Sports, if there is monoplyless market and interference of Government for quality maintenance than their will be better production which impact the economy

positively. Group # 6 Presented To: Ma’am Rooma Qadeer 21


Social Darwinists argued that: ֎If Government interfere with the competitions – they would unintentionally be impeding progress.֎Government must not lend economic aid to those who fall behind in the competition for survival and if these economic misfits survive, they will pass on their inferior qualities and human race will decline֎Economic competition ensures the ‘best’ firms survive and the economic system will gradually improve.



֎Criticism:– The survival of humanity depend

on cooperative attitudes and mutual willingness of people to help each other, not a ruthless disregard for other human beings which might advance the business world.


Free Trade and Utility: David Ricardo

֎ One country can produce a good more cheaply then another and it is said to have an ‘absolute advantage’ in producing that good.

֎ These cost differences may be based on differences in labor costs and skills, in climate, in technology, in equipment, in land or in natural resources.

David Ricardo=Countries differ in Production / Interference of

Government. For Example: Pakistan is different from India as it major

economical portion is dependent on production of Rice ,While India in production Wheat.


Free Trade and Utility: David Ricardo

֎ David Ricardo (1772-1823), a British economist, said that even if one country has an absolute advantage at producing everything, it is still better for it to specialize and trade.

֎ Comparative advantage– A situation where the opportunity costs (costs in

term of other goods given up) of making a commodity are lower for one country than for another.

֎ One country may be more efficient in making one product while another country will be more-efficient in making another product.


Criticisms of David Ricardo

֎ Ricardo makes a number of assumptions do not hold in the real world:

1. Assume resources used to produce goods (e.g. labor, equipment, factories) do not move from one country to another.

– Today multinational companies can easily move their productive capital from one country to another.

2. Assumes that each country’s production costs are constant and do not decline as countries expand their production (i.e. no “economies of scale”) or as they acquire new technology.


The Real Purpose Of Government

֎ According to Marx, the actual function that governments have served is that of protecting the interests of the ruling economic class.


Mixed Economy

֎ Mixed economy – It is basically the combination of Market and

Command by Government. Relating It With Company:

For Example: Government Introduce new policy in the Budget that the minimum wages of Employees should not be less than 9000 .So, CA Sports have to follow all the decisions taken by the Government.

֎ Minimum wage laws, safety laws, union laws, and other forms of labor legislations are used to protect workers from exploitation.


Property Systems and New Technologies

֎ Locke and utilitarian view that intellectual property should be treated as private property.– Without such private property rights,

intellectual creation would dry up.

֎ Marx views that intellectual property should be treated as public property.– Intellectual creativity does not require

the financial incentives.Group # 6 31Presented To: Ma’am Rooma Qadeer

Ethical Decision Making

Decision Making Process Model


Ethical Decision Making


Conclusion

Conclusion…• It is basically that who the economic system of ones economy

connect with that of the others through globalization. Such as Export and Imports by CA Sports.

• Mixed economy is a economy that retains a market and private property system but relies heavily on government policies to remedy their deficiencies . So if government introduce new monitory policy so they have to act according to that.

• The actual function that governments have historically served, according to Marx, is that of protecting the interests of the ruling economic class.

• Intellectual property is property that consists of an abstract and non physical object. Should be protected as a personal property.


Statement


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