2. • Economic Model:
– appeals to ethical norms such as utilitarianism,
freedom, and private property
– Connection to free enterprise system, free
markets, and capitalism,
– Limitations:
• Imperative to maximize profits is always conditions by
such phrases as “within the law,””without deception or
fraud” wile conforming to the basic rules of society,
both those embodied in laws and those embodied in
ethical custom.”
• Acknowledge the legitimacy of placing ethical
limitations beyond merely obeying the law in pursuit of
profit
3. • Norman Bowie: claimed that “something of a consensus
has emerged in the past 10 years regarding the social
responsibly of business.”
– The neoclassical model of corporate social responsibility
• The pursuit of profit is constrained by an obligation to obey a moral
minimum
• Business manager must first meet certain moral obligations which,
once met, open the door to the pursuit of profit.
• Bowie’s approach: as a Kantian theory of business ethics
– Distinguishes between ethical imperatives to cause no harm, to
prevent harm, and only a prima fie duty to prevent harm or to
do good.
– Doing good is something that people should be encouraged to
do and prized for doing.
– It is not something that people are ethically obligated to do,
since such an obligation would impose unreasonable burdens
and limitations on people.
– Obligation of to cause no harm overrides other ethical duty
4. • Bowie accepts the economic model’s view that mangers are the
agents of stockholder-owners and they have a duty to further the
interests of the stockholders. While is ethically good for managers
to prevent harm or to do some good, their duty to stockholders
overrides these concerns. As long as managers comply with the
moral minimum and cause no harm, they ha a responsibility to
maximize profits. In this way, the neoclassical model is revised
version of the economic model of corporate social responsibility.
– The distinction among causing her, preventing harm, and doing good
might be clear initially, distinguishing among these cases on a
consistent basis present a major challenge.
– The difference between causing and preventing harms may not be as
significant ethically as one might think
– Distinguishing between harm and good is not always clear and easy.
• The difference between the neoclassical model and the economic
model is function on we interpret to “cause no harm”
5. • Example from liability law: distinction between
causing harm and failing to prevent it from
occurring has been a major question for court:
Palsgraf V Long Island Railroad
– Mrs. Palsgraf standing on train platform waiting for
arrival of her train. An earlier train began to leave the
station. A late passenger ran to jump aboard and was
helped by the train conductors. The passenger
dropped a package which contained fireworks that
exploded when crushed. This caused an injury to Mrs.
Palsgraf
– Should the railroad be held liable for her injuries?
• The court addressed the question of causality
• Did the railroad employees' action caused her injuries?
6. • Causality holds that the cause of some harm is
that, without which, the harm would not have
occurred. The cause is the sine qua non (that
without which) of the harm.
– Indefinite number of causes: the late-arriving
passenger, the fireworks, the train wheels, the
conductor’s actions, the scale location, Mrs.
Pasfraf’s decisions to take the train.
• Even things that did not occur can be understood as the
cause of her injury.
– The railroad filed: prevent late-arriving passengers from
running to catch moving trains, failed to keep people away
from moving trains, failed to close the train doors before
leaving the station, they failed to prohibit explosives form
being carried on board, etc.
7. • The distinction between acts that cause and acts
that prevent harm may depend more on our
descriptions of the act than on any intrinsic
character of the act itself.
– This same question is central to debate concerning
euthanasia: is the decision to remove a mechanical
respirator actively causing the patient’s death or is it
merely passively allowing the patient to die by failing
to take steps to prevent the death?
• Similar challenge can be raised to the distinction
between doing good and preventing harm.
– Case of an automobile manufacturer that invests in a
hybrid-electric or fuel cell-powered vehicle.
• Is this decision an ethical “good” that is praiseworthy but not
required, or is it an ethically required obligation not to harm
others through pollution and resource depletion?
8. • These examples suggest that there is no distinction
between harms and good or between causing harms
and not causing harms.
• The modified version of the economic model cannot
escape confronting the specific limits of corporate
social responsibility head-on.
• The modified theory would need to offer a reasoned
explanation for why any particular case is a matter of
causing harm, and therefore is something ethically
prohibited or of doing good and therefore something
akin to charity.
– This suggests that we must abandon an in-principles
determination of the extent of corporate social
responsibility and decide this on a case-by-case basis.
• For every case in which stockholder interest appears to conflict
with the interests of employees, consumers, suppliers, or society,
business management must carefully analyze the situation to
determine its ethical responsibility.
9. • Moral minimum: recognizes that compliance
with the law is insufficient for being an
ethically responsible business
• An adequate theory of corporate social
responsibility must extend beyond the law to
acknowledge ethical duties.
• Ethical duties do bind business manager and
create a constraint on the pursuit of profit, the
moral minimum approach has opened the
door to a broader understanding of ethical
responsibilities.
