Business Law Chapter 3 – Flashcards
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Rights Theory
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The view of certain human rights are fundamental and must be respected by other people. Primary focus is on each individual member of society and his or her rights.
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Rights theory
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Two primary categories of rights. Kantianism and modern rights theories.
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Kantianism
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Created by Immanuel Kant. Was an demonologist. Humans were morel actors that were free to make their own decisions. Morality of any action was determined by applying his categorical imperative.
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Kantianism
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two formulation of the categorical imperative: 1) Axt only on that maxim whereby at the same time you can will that it shall become universal law. (Judge an action by applying it universally.) 2) Always act to treat humanity whether in yourself or in others, as an end in itself, never merely as a means. (We should not manipulate others)
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Modern rights theories
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They believe that there may be circumstances when actions like lying and killing could be morally acceptable (self-defense)
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Modern rights theory
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One popular theory believes that you should abide by a moral rule unless a more important rule conflicts with it.
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Justice Theory
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Derived from John Rawls's book A theory of justice. This argues for a just distribution of society's resources.
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Greatest equal liberty principle
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Each person has an equal right to bail rights and liberties.
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The difference principle
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Social inequalities are acceptable only if they cannot be eliminated without making the worst-off every worse off.
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Utilitarianism.
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An ethical decision is one that maximizes utility for society as a whole. In our individual designs we should always calculate their costs and benefits for every member of society.
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Utilitarianism
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The action is ethical only if the benefits to society outweighs their costs.
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Sarbanes-Oxley Act
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Act seems to affirm this position (That legislation has increased fines and civil damage for corporate wrongdoing by both U.S and foreign businesses that register their securities on a stock exchange in the United States.)
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Deontological Theories
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Focus is on the decision itself
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There are limits on the law's ability to control irresponsible behavior
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Corporate influence, conscious lawbreaking, unknown harms, and irrational corporate behavior.
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Conscious lawbreaking
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The sarbanes-Oxley Act attempts to increase the likelihood of detection and prosecution and raises the penalties for illegal behavior.
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Conscious lawbreaking
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The law also broadly defines obstruction of justice and makes obstruction of audit work papers a felony. Further, the law increases the penalties for illegal behavior.
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Risky shift
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This means that a grou of people who must reach a consensus on acceptable level of risk often decide on a level of risk higher than the risk they would accept as individuals.
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Risky shift
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The decisions made by a team of managers may create greater legal problems than decisions made by an isolated manager.
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Groupthink
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The tendency for members of a group to internalize the groups values and perceptions and to suppress critical thought.
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Groupthink
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As a result, if our team of maters is planning a hight profitable venture's legal problems because these conflict with the groups goal.
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Bad news doesn't rise
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When subordinates know that top maters are strongly committed to a particular course of action, they may not report problems for fear of angering their superiors.
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Corportate social responsibility advocates argue that ethical guidance for corporate mangers may come from
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1) Values 2) Corporate or industry codes of conduct 3) Constituency values
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Corporate or industry codes of ethical conduct
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Sarbanes-Oxley act requires public corporations to disclose whether they have adopted a code of ethics for senior financial officers and to report any change in the code or waiver of their application.
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Greater shareholder power
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Shareholders are supposed to be in control of the organization. There are two recommendations 1) Giving shareholders greater power to nominate directors and 2) Giving them the power to adopt resolutions binding the corporate directors.
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How to make corporations more sensitive to outside concerns
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1) Giving shareholders greater power 2) Changing the composition of the corporate board 3) Changing the management structure
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Permissible Payments
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The FCPA allows a company to pay governmental officials to secure
