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Ethical and Moral Business Management Management Essay (Essay Sample)

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Look at the PDF article and answer four questions in the Template. According to the format in the template, the four questions are three pages in total. The citation rate cannot exceed 10%, and it must be original and not plagiarized.


 


©2020 BUSINESS ETHICS FORUM INC. - ALL RIGHTS RESERVED PAGE 1 OF 6 BUSINESS ETHICS FORUM CASE STUDY: Under Review & Revision by Corporate America - The Common Good, Truth and Virtues “Unmoored from concepts like Natural Law—which provided a common societal bedrock in previous centuries— the true, the good, and the right are now adrift, blown by the ever-stronger winds of … positivism into whatever harbor awaits them.” - July 4, 2019, First Things Magazine. Corporate America is an increasingly vocal advocate and broad-based implementer of new norms, adopted or imposed for reasons that may or may not have anything to do with commercial mission or the common good. These standards frequently change, often violate the standard of non-contradiction and frequently lack logical consistency. These strongly signaled “virtues” and the truth claims on which they are premised are injected into board rooms with the assistance of proxy advisors and forced upon a public that is hungry for truth, and curiously willing to trust these novel claims, particularly if the claims are in vogue and endorsed by mass media opinion leaders. But is Corporate America able to establish itself as an arbiter of truth and the common good, particularly given that Corporate America will not fix a definition of “good” and may be too conflicted by what is good for each corporation and its managers, as compared to what is good for individuals who make up society? I. August 19, 2019 – Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans’  The new statement moves away from shareholder primacy i. Alex Gorsky, CEO of Johnson & Johnson, “CEOs are truly committed to meeting the needs of all stakeholders.” ii. Tricia Griffith, CEO of Progressive Corporation, “… put the customer first and invest in their employees and communities.” iii. Darren Walker, President of the Ford Foundation, “… result in shared prosperity and sustainability for both business and society.”  From the Statement, i. Americans… deserve to lead a life of meaning and dignity. ii. We share a fundamental commitment to all our stakeholders. iii. We commit to delivering value to our customers…, investing in our employees. iv. We foster diversity and inclusion, dignity and respect. v. Dealing fairly with our suppliers. vi. Supporting the communities in which we work. We respect the communities in which we work… protect the environment by embracing sustainable practices across our businesses. vii. Generating long-term value for our shareholders….  …signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders ©2020 BUSINESS ETHICS FORUM INC. - ALL RIGHTS RESERVED PAGE 2 OF 6 II. 10 Years Earlier on June 29, 2009 – Caritas in Veritate (Papal Encyclical) – Pope Benedict XVI  A new way of understanding the business enterprise is required – answerable to more stakeholders than just stockholders; for the long not just short term; responsible to workers, suppliers, consumers, environment and broader society; and responsible to outsourced constituencies.  Economic activity … needs to be directed towards the pursuit of the common good…. The common good is the good of all of us, made up of individuals, families and intermediate groups who constitute society. The common good is a good that is sought not for its own sake, but for the people who belong to the social community and who can only really and effectively pursue their good within it.  …the primary capital to be safeguarded and valued is man, the human person in his or her integrity: “Man is the source, the focus and the aim of all economic and social life”  Respect for life cannot be detached from the development of peoples. Openness to life is at the center of true development. When a society moves to deny or suppress life, it loses the energy to strive for man’s good.  … develop a sound criterion of discernment, since the adjective “ethical” can be abused. When the word is used generically, it can lend itself to any number of interpretations, even to the point where it includes decisions and choices contrary to justice and authentic human welfare.  Without truth, charity degenerates into sentimentality.  Each person finds his good by adherence to God's plan for him, in order to realize it fully: in this plan, he finds his truth, and through adherence to this truth he becomes free (cf. Jn 8:32). To defend the truth, to articulate it with humility and conviction, and to bear witness to it in life are therefore exacting and indispensable forms of charity. Charity, in fact, “rejoices in the truth” (1 Cor 13:6).  Charity … gives real substance to the personal relationship with God and with neighbor; it is the principle not only of micro-relationships (with friends, with family members or within small groups) but also of macro-relationships (social, economic and political ones). III.Recent Actions by Corporate America  Environmental, Social and Governance (“ESG”) and Fossil Fuels: i. May 2019 – Louis Dreyfus obtained a $750M sustainability-linked revolving credit facility. The revolver includes a sustainability-linked pricing mechanism - the interest rate is linked to performance against four indicators - reductions in CO2 emissions, electricity consumption, water usage, and solid waste sent to landfill; with an independent auditor providing validation of each. ii. May 2019 - JP Morgan announced the launch of the JESG Global High Yield Corporate Index, the “first ever environmental, social and governance benchmark to cover global high yield credit markets.” The stated purpose of the index is to establish a baseline against which investors and portfolio managers can compare their own ESG-based investing. JP Morgan decides whether a certain company is excluded from the index and what weighting is assigned to those companies ©2020 BUSINESS ETHICS FORUM INC. - ALL RIGHTS RESERVED PAGE 3 OF 6 included in the index. For example, companies with revenue from thermal coal, weapons or lack of adherence to United Nations Global Compact principles are excluded. iii. January 2020 – Blackrock, the world’s largest asset manager, with $7 trillion in assets under management, stated that “climate change has become a defining factor in companies’ long-term prospects” and “the evidence on climate risk is compelling investors to reassess core assumptions about modern finance.” Blackrock has now made sustainability integral to portfolio construction and risk management, plans to exit thermal coal investments and launch new products that screen fossil fuels.  Abortion: i. May 2019 - Netflix weighed in on Georgia’s new abortion law, saying the company would “rethink our entire investment in Georgia” should the law go into effect. The fetal heartbeat law prompted calls for Hollywood to boycott Georgia, a major production hub for film and television that has generated 92,000 jobs in the state and $2.7 billion in annual revenues. ii. In June 2019, 180 companies signed a letter stating that restricting abortion was bad for business. These companies included Twitter, Ben & Jerry’s, Warby Parker, Bloomberg, Square, Eileen Fisher and Kenneth Cole.  Transgender Bathroom Laws: March 2017 - North Carolina repealed a law restricting bathroom use, hoping to bring back businesses and sports leagues that boycotted the state.  Hong Kong: i. August 26, 2019 - As reported in the Wall Street Journal, “Hong Kong Protests Force Companies to Take Sides.” On the eve of an antigovernment protest by accountants in Hong Kong, a PricewaterhouseCoopers executive warned his staff not to do anything that could put the firm in a bad light. ii. October 15, 2019 - As reported by NPR: Los Angeles Lakers star LeBron James has criticized a tweet sent by Houston Rockets General Manager Daryl Morey in support of Hong Kong protesters, saying of Morey, "I believe he wasn't educated on the situation at hand." James has just returned from the NBA's tense trip to China, where teams played exhibition games but many player appearances were canceled owing to the controversy over Morey's statement, which was deleted shortly after it was posted. "Yes, we all do have freedom of speech, but at times there are ramifications for the negative that can happen when you're not thinking about others and you're only thinking about yourself," James told reporters in Los Angeles. IV.Then Again,  To industrialize and create modern economies, beyond cottage industry, cities require fuel, transport systems and roads, which have led to the alleviation of peasantry and mass poverty – in a word, civilization. As well, fossil fuel-powered mechanization and transportation has meant a dramatic increase in the amount of farmland that can be cultivated and farm product brought to market. ©2020 BUSINESS ETHICS FORUM INC. - ALL RIGHTS RESERVED PAGE 4 OF 6 i. November 2014 – National Review: Fossil Fuels and Morality – “… a great number of well-known data, demonstrating the powerful historical link between increased fossil-fuel use and rising living standards, increased life expectancy, decreased infant and child mortality, and so forth…. the benefits of fossil fuels go far beyond climate: cheap, plentiful, reliable energy gives human beings the power to improve every aspect of life, including productivity, food, clothing, and shelter. You can’t be a humanitarian and condemn the energy humanity needs…. To oppose fossil fuels is ultimately to oppose the underdeveloped world.”  From Primal Screams: How the Sexual Revolution Created Identity Politics by Mary Eberstadt: … a phenomenon that has not been well understood: the commercial exploitation of today’s anxiety over identity—specifically in the form of “virtue-signaling” by corporations. Such theater is not only cheap in the sense of being cheesy… it is also cheaper economically than anything else corporate actors might do—like thinking through creative solutions to the problem of student debt, say, or of devising alternatives to an overheated college market. Sensible people need to understand Hollywood’s and corporate America’s preening. It is an economically self-interested action, and it deserves calling out.  From The Social Responsibility of Business Is to Increase Its Profits by Milton Friedman, New York Times Magazine , Sept. 13, 1970: Whether blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and prestigious businessmen, does clearly harm the foundations of a free society. I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely far-sighted and clearheaded in matters that are internal to their businesses. They are incredibly short-sighted and muddle-headed in matters that are outside their businesses but affect the possible survival of business in general. The short-sightedness is also exemplified in speeches by businessmen on social responsibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Questions: 1. A key difference between the Business Roundtable statement and Caritas in Veritate (“CIV”) regards the place of shareholders. Whereas both documents identify other stakeholders with rightful claims, CIV is silent on priority whereas the Business Roundtable “upends” shareholder primacy. Which is a better approach and why? ©2020 BUSINESS ETHICS FORUM INC. - ALL RIGHTS RESERVED PAGE 5 OF 6 2. Does the advice offered by PricewaterhouseCoopers and LeBron James about Hong Kong advance the common good? 3. Is Corporate America too conflicted and, as Mary Ebertstadt suggests, is this “new ethics” simply self-interest clothed in apparent virtue? 4. Milton Friedman suggests that corporate social responsibility is incompetent, misguided and harms the foundation of a free society by creating conditions conducive to government-mandated morality. Is that happening? 5. In his 1949 book, The Drama of Atheist Humanism, Henri de Lubac says the urge to worship is at the heart of our nature. He goes further and claims that once Positivism (the worship of the human race) was embraced in the mid-1800s, given the relativism on which it is based, a new priesthood was necessary to decide what should be thought (but to ask the new priests for proof of validity would be a sign of hostility to the priestly order/ “the community always lags behinds the elite”/heresy must be run down without pity). If any, who are our new priests? Is “heresy” really being hunted down without pity? 6. Who is the appropriate priest to mediate between the developed world’s current desire to reduce fossil fuels and the undeveloped world’s desire to modernize, build roads and schools and electrify (like the developed world)? 7. Is solidarity possible without a consensus about the common good? Without such consensus, do differing vocabularies lead to non-communication, like what occurred with the Tower of Babel? 8. In the marketplace for ideas, should novelty enjoy an advantage over tradition? 9. How might the good that corporate America can achieve be enabled while at the same time its overreach be constrained? Who decides and how? Core Principles of the Social Doctrine of the Church a. Subsidiarity – Ch 4, IV: i. Subsidiarity is among the most constant and characteristic directives of the Church’s social doctrine and has been present since the first great social encyclical. It is impossible to promote the dignity of the person without showing concern for the family, groups, associations, local territorial realities; in short, for that aggregate of economic, social, cultural, sports-oriented, recreational, professional and political expressions to which people spontaneously give life and which make it possible for them to achieve effective social growth. (Compendium, 185) ii. “Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them. (Quadragesimo Anno, 203).” ©2020 BUSINESS ETHICS FORUM INC. - ALL RIGHTS RESERVED PAGE 6 OF 6 b. Solidarity – Ch 4, VI: i. Solidarity is an authentic moral virtue, not a “feeling of vague compassion or shallow distress at the misfortunes of so many people, both near and far. On the contrary, it is a firm and persevering determination to commit oneself to the common good. That is to say to the good of all and of each individual, because we are all really responsible for all (Sollicitudo Rei Socialis, 38).” (Compendium, 193) ii. The principle of solidarity requires that men and women of our day cultivate a greater awareness that they are debtors of the society of which they have become part. They are debtors because of those conditions that make human existence liveable, and because of the indivisible and indispensable legacy constituted by culture, scientific and technical knowledge, material and immaterial goods and by all that the human condition has produced. (Compendium, 195) c. Morality and the Economy – Ch 7, II i. The relation between morality and economics is necessary, indeed intrinsic: economic activity and moral behavior are intimately joined one to the other. (Compendium 331) d. Private Initiative and Business Initiative – Ch 7, III i. The social doctrine of the Church recognizes the proper role of profit as the first indicator that a business is functioning well: “when a firm makes a profit, this means that productive factors have been properly employed”.[709] But this does not cloud her awareness of the fact that a business may show a profit while not properly serving society.[710] For example, “it is possible for the financial accounts to be in order, and yet for the people — who make up the firm's most valuable asset — to be humiliated and their dignity offended”.[711] This is what happens when businesses are part of social and cultural systems marked by the exploitation of people, tending to avoid the obligations of social justice and to violate the rights of workers. (Compendium, 340)

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Ethical and Moral Business Environment
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Institutional Affiliation
Ethical and Moral Business Environment
Question 1: Shareholder Primacy
Before highlighting which of the two is a better approach, it is important to note that all focused on the long-term. This aspect is very important to the survival and thriving of a company in the ever-dynamic marketplace. Having identified this, anyone will understand that the primary objective of a business is to make profits. When the business lacks positive cash-flow, it is bound to exist in the market. Beyond that, profits mean that the company can provide shareholders with returns on their investment.

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