ba 356 ch3 team3 presentation
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Chapter 3:Philosophical Ethics
& Business
Team 3:Angela Van Strander
Matt Vital
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The Justification of Human Rights
By: Denis G. Arnold
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Human Rights
• Moral rights that apply to all persons in all nations, regardless of whether the nation in which a person resides acknowledge and protects those rights
• Human rights are inalienable
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Philosophical Questions
• #1. How can human rights be justified?– Are they a Western
concept?
• #2. What specific human rights exists?
• #3. How do human rights differ from other rights?– Such as legal rights.
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Activity #1
• Reflection– Group yourselves and for a couple
minutes think about the 3 previous questions & try to answer them.
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Conclusion
• Have a sense of personhood– “Metaphysical” rather than biological
• Capable of acting in a manner consistent with one’s considered preferences
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Caux Principles of Business
The Caux Round Table (CRT) is an international network of experienced business leaders, who
work with business and political leaders to design the intellectual strategies, management tools and practices to strengthen private enterprise and public governance to improve our global
community.http://www.cauxroundtable.org/
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Motives
• Improve economic and social changes
• Seek to begin a process that identifies shared values, reconciles differing values, and develop a share perspective on business behavior acceptable to and honored by all.
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2 Basic Ethical Ideals:
– Kyosei• Japanese concept meaning “living and
working together for the common good”; thus enabling cooperation and mutual prosperity to coexist with healthy and fair competition
– Human dignity• sacredness or value of each person as an
end—not simply as a means to the fulfillment of others’ purposes or even majority prescription
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Section I: Preamble/Introduction
• Business can be a powerful agent of positive social change.– They offer the following principles as a
foundation for dialogue and action by business leasers in search of responsibility.
– Necessary for moral values in business decision-making
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Section II: General Principles
• The Responsibilities of Business: Beyond Stakeholders toward Stakeholders
• The Economic and Social Impact of Business Toward Innovation, Justice and World Community
• Business Behavior: Beyond the Letter of Law toward a Spirit of Trust
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Section II: General Principles (cont’d)
• Respect for Rules• Support for Multilateral Trade• Respect for the Environment• Avoidance of Illicit Operations
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Section III: Stakeholder Principles
• Customers• Employees• Owners/Investors• Suppliers• Competitors• Communities
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Do CEOs Get Paid Too Much?
By: Jeffrey Moriarty
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BusinessWeek estimated that, in 2003, CEOs of 365 largest US corporations were paid on average $8 million, 301 times as
much as factory workers.
CEO packages includes:– Salary, bonus, and restricted stock & stock
option grants– And increased by 340% from 1991-2001,
while workers’ paychecks increased by only 36%.
What is wrong with this?
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3 Views of Justice in Wages
• In general, what makes a wage just?
• Agreement View• Desert View• Utility View
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Agreement View
• Based on arm’s length negotiation between informed CEOs and owners
• Meet 2 requirements:– Independent of the
CEO– Must be informed
• Problems:– Mainly occurs on
company’s owners– No guarantee that
shareholders would choose independent and informed representatives in elections
– Shareholders do not elect directors in a meaningful way
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Agreement View (continued)
• Board of Directors may be informed, but they may not act independently
• 3 factors that compromise director’s independence from CEOs:– Gratitude– Self-interest– Absence of a reason
directors have to favor shareholders
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Agreement View (continued)
• While admitting that these influences are problematic, directors are usually assisted by compensation consultants that can make accurate and bias-free assessments of a CEO’s worth– Problem: Sometimes they don’t always
consider all the consultant’s advice
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Desert View
• Company assumes that a CEO should get the wage deserved which is determined by contributions to the firm and the proper measure of contribution is firm performance
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Problem #1:Identifying the standard for deservingness
• Contribution to the firm
• Amount of ability, skill, or training the job requires
• Difficulty, stress, dangerousness, risk, and unpleasantness
• Degree of responsibility/importance
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Problem #2:How does the job fare?
• After determining the deserving factor, decide on what wage is deserved for the CEO
• Based on:– Physical effort– Degrees of
responsibility– Contributions to the
firm– Formal education
and years of experience
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Desert View (cont’d)
• While admitting that these influences are problematic, there is still justification of current disparities between CEOs and worker pay.
• If employee pay cannot be increased, then this view demands that CEO pay is reduced drastically.
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Utility View
• Wages are not rewards, but as incentives for future work
• Purpose:– To maximize firm
wealth by attracting, retaining, and motivating talented workers
• Motivate CEOs toward bonuses
• Wealth created by CEO must be weighed against the cost of their services
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Utility View (cont’d)Attraction & Retention• Reasons why
employees get paid more based on their:– Effort– Skill– Difficulty
Motivation• Pay motivates CEO to
work harder– No guarantee extra
headwork will translate into extra revenue
• Compensation packages make stock prices rise because stock is include within their compensation package
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Utility View (cont’d)
• Pay of a CEO may be an effective motivational tool, but not likely cost effective
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Conclusion
• How to Reduce CEO Pay– CEO’s should be
removed from the director election process
– Directors should be required to make meaningful investments in firms
• Overall, this should make you think about the moral dimensions of wages.
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Activity #2
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Bingo word choices:Caux Principles of Business
KyoseiHuman Dignity
Section 1: PreambleSection 2: General Principles (7)
Section 3: Stakeholder Principles (6)Do CEOs Get Paid Too Much?
BusinessWeekCEO packages
Agreement View (6)Desert View (5)Utility View (7)
How to Reduce CEO Pay