Business Ethics Essay -- essays research papers

Running Head: Business Ethics Business Ethics name school The modern theory of the firm, which is central to finance and corporate law, views the corporation as a of contracts among the various corporate constituencies. Upon this foundation, finance theory and corporate law postulate shareholder wealth as the objective of the firm. Research in business ethics has largely ignored this contracts theory of the firm except to reject the financial-legal model as normatively inadequate. Philosophers generally bring philosophical theories of ethics to bear on problems of business, and they regard the contractual theory of the firm primarily as a subject for criticism using the resources of philosophical ethics. In particular, stakeholder theory, which stresses the importance of all groups that affect or are affected by a firm, has been proposed as a more adequate theory of the firm for studying business ethics. An important benefit of business ethics research conducted within such a framework would be a narrowing of the gulf between business ethics and the fields of financial economics and corporate law. Business ethics is widely dismissed as irrelevant by researchers in these fields because of its failure to recognize the existing financial and legal structures of the corporation, which are built largely on a contractual foundation. Hence, a common framework could increase the relevance of business ethics research and create a mutually beneficial dialogue. As a framework for identifying and analyzing many common business ethics problems, the contractual theory focuses our attention on the need to provide adequate safeguards for each constituency's interests. Corporate governance is concerned primarily with protecting shareholder interests, in part because the special contracting problems of shareholders are best met by the residual claims that the law of corporate governance creates. The comparative neglect of other constituencies in corporate law is not a matter of concern as long as their interests are adequately protected in some way. How the interests of each constituency are protected--whether by means of corporate governance structures or other means--is a matter of what works best in practice. Before we can devise means for protecting the interests of each ... ...act but on the efficacy of the actual claims of the group in question. Business ethics problems can be identified mainly as wrongful harms, misallocations, and misappropriations. These categories are commonly employed in economics, finance, and corporate law in the analysis of various kinds of problems, which are usually attributed to market failures, imperfect contracting, and other causes. However, many of these other kinds of problems arise from larger economic and political forces that would affect any theory of the firm. References Kenneth E. Goodpaster, "Business Ethics and Stakeholder Analysis," Business Ethics Quarterly, 1 (2001), 53-73; Allen Kaufman, Lawrence Zacharias, and Marvin Karson, Managers vs. Owners: The Struggle for Corporate Control in American Democracy (New York: Oxford University Press, 1995. Alderson, A. and Kakabadse, A., (1994), 'Business Ethics and Irish Management: A Cross-Cultural Study', European Management Journal, Volume 12, Number 4, December, pp. 432-441. Abelson, R. and Nielson, K., (2003), 'The History of Ethics', in Edwards, P. (Ed.), Encyclopaedia of Ethics, Macmillan, New York, pp. 81-116. Business Ethics Essay -- essays research papers Running Head: Business Ethics Business Ethics name school The modern theory of the firm, which is central to finance and corporate law, views the corporation as a of contracts among the various corporate constituencies. Upon this foundation, finance theory and corporate law postulate shareholder wealth as the objective of the firm. Research in business ethics has largely ignored this contracts theory of the firm except to reject the financial-legal model as normatively inadequate. Philosophers generally bring philosophical theories of ethics to bear on problems of business, and they regard the contractual theory of the firm primarily as a subject for criticism using the resources of philosophical ethics. In particular, stakeholder theory, which stresses the importance of all groups that affect or are affected by a firm, has been proposed as a more adequate theory of the firm for studying business ethics. An important benefit of business ethics research conducted within such a framework would be a narrowing of the gulf between business ethics and the fields of financial economics and corporate law. Business ethics is widely dismissed as irrelevant by researchers in these fields because of its failure to recognize the existing financial and legal structures of the corporation, which are built largely on a contractual foundation. Hence, a common framework could increase the relevance of business ethics research and create a mutually beneficial dialogue. As a framework for identifying and analyzing many common business ethics problems, the contractual theory focuses our attention on the need to provide adequate safeguards for each constituency's interests. Corporate governance is concerned primarily with protecting shareholder interests, in part because the special contracting problems of shareholders are best met by the residual claims that the law of corporate governance creates. The comparative neglect of other constituencies in corporate law is not a matter of concern as long as their interests are adequately protected in some way. How the interests of each constituency are protected--whether by means of corporate governance structures or other means--is a matter of what works best in practice. Before we can devise means for protecting the interests of each ... ...act but on the efficacy of the actual claims of the group in question. Business ethics problems can be identified mainly as wrongful harms, misallocations, and misappropriations. These categories are commonly employed in economics, finance, and corporate law in the analysis of various kinds of problems, which are usually attributed to market failures, imperfect contracting, and other causes. However, many of these other kinds of problems arise from larger economic and political forces that would affect any theory of the firm. References Kenneth E. Goodpaster, "Business Ethics and Stakeholder Analysis," Business Ethics Quarterly, 1 (2001), 53-73; Allen Kaufman, Lawrence Zacharias, and Marvin Karson, Managers vs. Owners: The Struggle for Corporate Control in American Democracy (New York: Oxford University Press, 1995. Alderson, A. and Kakabadse, A., (1994), 'Business Ethics and Irish Management: A Cross-Cultural Study', European Management Journal, Volume 12, Number 4, December, pp. 432-441. Abelson, R. and Nielson, K., (2003), 'The History of Ethics', in Edwards, P. (Ed.), Encyclopaedia of Ethics, Macmillan, New York, pp. 81-116.