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Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
Acca p1  chap 12- ethical theories
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Acca p1 chap 12- ethical theories


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  • Why is ACCA (Malaysia) always complaining about the under representation of women in the workforce/senior management? We already know women choose family over work and statistics show that the number of high ranking females are increasing. So why all the complaining? Do they expect to just show up and get high ranking positions just because the qualifications (that are the same as men)?
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  • 1. Ethical Theories
    Chapter 12
  • 2.
  • 3. Ethical & moral belief of society
  • 4.
  • 5. Deontological v/s teleological approach to ethics
  • 6. Deontological
    A non consequentialist theory.
    Motivation & principle is important.
    Action is based on Moral.
    3 maxims/ tests of action, to know if action is morally right- all 3 maxims must be satisfied.
    Consistency- Action is right if everyone can follow the same principle
    Human dignity – Treat humanity as an end, never as a means . Humanity inside you and inside people.
    Universality- Would others / external parties , view the action as moral or suitable
  • 7. Deontological approach- categorical imperative
    Maxim 1
    Act only according to that maxim by which you can desire that it should become a universal law.
    Action is right if everyone follows the same principle.
    Eg certain behaviors are judged as immoral by almost everyone , namely; murder, child abuse, fraud.
  • 8. Maxim 2- Principle of human dignity
    Act to treat humanity , in yourself and in others , always as an end , never as a means only.
    Never consider humans as slaves , or as only providers of service only
    Consider their needs and expectations
    Some concept of Empowerment of employees
  • 9. Maxim 3- Principle of Universality
    Act only so that the will , through its maxims , could regard itself at the same time as universally law giving.
    Principle of universality
    Will an action be viewed as moral when viewed by external parties. Not by the initiator of the action/decision.
    Outside – in approach.
    If the initiator doubt of the moral founding/ grounding of the action, then the moral status is doubtful.
  • 10. Teleological approach
    Consequentialist theory
    The right or wrong depends on conseqences/ outcomes of the decision.
    If the outcome is right , then the action itself is irrelevant.
    2 perspectives to view an outcome
  • 11. 2 perspectives
  • 12. Teleological approach
    The goal is important , not the means to get there.
    Consequentialist theory- whether a decision is right or wrong will depend on the outcomes of the decision.
    highly subjective approach
    The effect of collective welfare
    Concept of utility
    Measuring good or bad utility produces a Cost benefit analysis of decisions , thus making those decisions
  • 13. Kohlberg Level of Human development
    • Individuals tend to move from Level 1 to Level 3 as they grow older.
    • 14. The move is decided by how a decision is made , not what the decision is about.
    • 15. Research show that most people , including business managers tend to reason on Level 2.
  • Kohlberg Cognitive Moral development theory
    CMD theory- explain the reasoning process behind moral judgments.
    The theory views ethical decisions from an individual’s perspective.
    CMD theory derived from Piaget’s work
    Piaget’s work was to assess kids below 10 yrs and how they responded to problems and dilemmas different from much older kids.
    Kohlberg built on Piaget’s work and interviewed kids and teens about moral dilemmas. He found other moral stages that went far beyond Piaget’s traditional model.
  • 16. Critics of CMD theory
    Gender bias-study interviewed only young American males
    Too great emphasis on rights & justice compared to other bases of morality.
    People use different moral reasoning strategies in different situations so there may not be any sequence of stages.
    Moral reasoning strategies – the brain react differently to all sorts of stressing situations.
    When in happy situations , brain will react more positively and will be more creative.
  • 17. C.M.D (explained)
    Pre conventional – obedience & punishment
    Right/wrong defined according to expected rewards / punishments from people of authority
    Eg – eyee make unethical decision and believes they won’t be punished.
    Pre Conventional – Instrumental purpose & exchange
    Right is defined according to whether there is fairness in exchange
    Self interest prevails
  • 18. C.M.D (explained)
    Conventional – interpersonal accord & conformity
    Action is guided by what is expected from peers & close ones
    Conventional – social accord & system maintenance
    Expectations of others extended / broadened to social accord
    Not limited to immediate peers
  • 19. C.M.D (explained)
    Post conventional- social contract & individual rights
    Right / wrong determined i.r.o :
    Basic rights
    Contracts of society
    Post conventional – universal ethical principles
    Decisions taken, based on self chosen principles which the person believe , everyone should follow.
    Autonomy in decision making.
  • 20. Social responsibility
  • 21. Social responsibility
    Org need to be socially responsible.
    This entails – Social accountability
    Gray, Owens & Adams theory – 7 positions on social responsibility.
  • 22. Social responsibility – 7 positions
    Pristine capitalist
    Proponents of social contract
    Social ecologist
    Radical feminist
    Deep ecologist
  • 23. Pristine capitalist
    S/h wealth maximization is of Value.
    What reduces s/h wealth is Theft.
    Liberal democratic economy is correct.
    Business have no moral obligations beyond their responsibilities to s/h & creditors.
    Shareholders’ needs are the most important for the org.
    Low CSR consideration
    Shareholders expect maximum returns
    No returns tantamount to theft
  • 24. Expedients
    Some social expenses needed to position the org.
    Concept of “ enlightened self-interest”.
    Minimum social responsibility necessary to achieve Long term economic stability & welfare.
    CSR is acceptable if it is within interest of business.
    Business need some minimum ethical guidelines.
    Impact on society need to be considered.
    A co can’t simply use resource & not consider impact on society.
  • 25. Proponents of social contract
    Co has license , granted by society
    Co exist at society's will, must serve society
    Behave according to ethical norms of society
    Behavior change as norms change
    Existence of co & decisions made are justified if they serve public interest.
    But responsibilities & accounting requirements are not clear.
  • 26. Social ecologist
    A biz has a social & environmental footprint.
    Therefore is responsible to minimize the footprint
    There is an overall concern for the environment
    Recognition that large organizations cause environmental & social problems.
    More concern for resource allocation , pollution effect & waste control.
    With these changes , it is assumed that quality of life will be improved or will be constant.
  • 27. Socialist
    Actions of biz = actions of capitalist oppressing other lower classes.
    This is the view of the socialist and their recurrent battle.
    Biz should help to correct imbalance in society
    Capitalist should not dominate social , economic or political life
    Change needed to reduce capitalist power
    In the socialist system , capitalist oppress workers
    So change is required.
    Economic systems & the creation of things is a secondary objective rather than a primary
    Mistrust of accounting & CSR systems
    No clue how these can be amended
  • 28. Radical feminist
    Society & biz should be based on feminine characteristics. E.g. equity , dialogue, compassion, fairness.
    More emotional side
    Business reflect too much masculine concepts of aggressivity.
    Need more feminine values of compassion, love & cooperation.
    Radical change needed in ownership & structure of society
    More towards feminist viewpoint
  • 29. Deep ecologist
    Human beings have no monopoly on the world’s resources
    Biz have to be cautious with the environment
    Lack of environment awareness by biz
    There is too much negative impact on the environment caused by co’s operations.
  • 30. Variables determining cultural context of ethics & csr
    Focus on Profit
    Focus on Law & Compliance
    Focus on what is right
    Focus on doing what is desired
  • 31. Variables (cont’d)
    Ethics & csr will vary according to Culture
    The 4 variables will vary according to European and US culture.
    European = Ethics & philanthropic actions can be enforced legally
    US= Focus on discretionary actions of co’s & individuals
    Caroll model of CSR …
  • 32.
  • 33. Corporate & personal ethical stances
  • 34. Corporate & personal ethical stances
    Corporate stance- approach of the org to the different theories.
    Personal stance – Approach of the individual to different theories.
  • 35. Multiple stakeholder theories
    Short –term shareholder interests
    Corporate stance
    - In short term, org need adequate ROI.
    - Conflict exist in 2 areas :
    1) Need to pay dividend & investing in the co.'s future.
    2) Shareholder’s expectations of return
    Personal stance
    • S.T interests depend on the type of s/h
    • 36. Small/ minority s/h need annual Roi as a form of income + capital growth
    • 37. Larger s/h have little interest in short term returns. For them short term dividend may conflict with long term goals.
  • Multiple stakeholder theories
    Long-term shareholder interests
    Corporate stance
    In L.T , org need to maintain existence- going concern.
    This objective may conflict with Short term return needs.
    Org will cater for LT s/h interests with capital growth.
    So that these s/h retain their investments in the Co.
    Large scale sale of shares is considered a weakness sign which affect L.T prospects of the org.
    Personal stance
    In LT , s/h concerned with security of inv as well as capital growth
    These goals are congruent with org objectives.
    But org will tend to resolve conflicts between org existence & s/h conflict.
  • 38. Multiple stakeholder theories
    Multiple stakeholder obligations
    Corporate stance
    Organizational stance is to identify stkh with high power & influence over the org.
    Then involve these stkh in decision making & provide them with returns they are expecting.
    There will be conflicts because of different needs of different groups.
    Egeyees expect increase in salary, compared to s/h who expect more capital growth & dividends.
    Personal stance
    Each stkh group expect their interests to be understood & acted upon.
    Lack of action will increase outside pressure on the org to meet those interests
    Eg needs for dividends will decrease if s/h understand that h& s issues are important and will lead to more productivity from eyees , thus more return in the future for
  • 39. Shaper of society