This document discusses three theories - stockholder theory, stakeholder theory, and social contract theory - and how they relate to a recent security breach at JP Morgan. Under stockholder theory, JP Morgan responded properly by announcing the problem while taking proactive steps to solve it. For stakeholder theory, it is difficult to say if JP Morgan invested enough in security given the massive number of daily threats. Finally, regarding social contract theory, JP Morgan avoided breach by promptly announcing the hack to the public, and the physical environment was not affected.
2. Definition: maximize stockholder wealth
in legal and non-fraudulent manners
◦ How will each decision effect the SHV of the
company?
◦ Is this a tangible goal when being confined by
ethical behavior?
Stockholder Theory
3. Did JP Morgan do anything unethical to have
this security breach happen to them?
◦ No: their decisions up to then were proactive in
stockholder security
How has JP Morgan responded to uphold
Stockholder Theory?
◦ Announced the problem but stated their proactivity
to solving the problem
◦ Although not profit maximizing, JP Morgan is
preventing maximum losses from unforeseeable
catastrophe
JP Morgan’s Stockholder Theory
4. Definition: Maximize benefits to all
stakeholders while weighing costs to
competing interests
◦ Does this potential action maximize benefits for
company?
◦ Will the stakeholders feel comfortable with the
decision at hand?
Stakeholder Theory
5. Did JP Morgan weigh their costs for
competing interests against computer
security well enough?
◦ Hard to say:
◦ Millions invested in security
◦ Mass amount of computer threats each day
Hard to monitor and find which threats were
serious
◦ Should JP Morgan have invested more in
security even though this was unforeseeable?
Up to you to decide…
JP Morgan’s Stakeholder Theory
6. Definition: create value for society in a
manner that is just and nondiscriminatory
◦ Social Welfare and Justice
◦ How will this decision benefit overall society?
◦ Will this decision leave out any one particular
group?
Social Contract Theory
7. How could JP Morgan avoid being in
breach of Social Contract Theory?
◦ Making sure the announcement of the hackers
was known to the public immediately
Only just act that could be performed when
dealing with an unanticipated event like this
◦ Physical environment was not immediately
affected by this problem
JP Morgan’s Social Contract
Theory