+ All Categories
Home > Documents > Lecture 5 BHJ Business Ethics

Lecture 5 BHJ Business Ethics

Date post: 08-Apr-2018
Category:
Upload: edward-essau-fyitta
View: 228 times
Download: 0 times
Share this document with a friend

of 14

Transcript
  • 8/6/2019 Lecture 5 BHJ Business Ethics

    1/14

    4/11/2011

    1

    Business Environment Framework:

    Free Market

    MEC 479 - Spring 2011

    Lecture 5

    2

    Topics

    1. Definitions of kinds of markets

    2. Free market

    Framing principles

    Economic assumptions

    3. Competition

    4. Reading Assignments for Lectures 5 & 6

    Beyond IntegrityChapters 4 & 5

    Business Ethics Chapter 4

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    2/14

    4/11/2011

    2

    3

    Why consider business

    environment frameworks?

    1. Differing views exist.

    2. Try to develop a frame of reference that

    explains how business really operates

    (is).

    3. Try to connect that framework to CWV

    and other views (aught).4. Framework should allow us to anticipate

    issues rather than react to issues.

    4

    Business environment framework

    Alternatives:

    1. Socialism

    2. Totalitarian

    3. Adventure capitalistic

    4. Free market

    5. Capitalism

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    3/14

    4/11/2011

    3

    5

    Business environment frameworkAre there exclusive differences?

    1. No!

    2. What are the implications to business?a. ___________________________________

    b. ___________________________________

    c. ___________________________________

    3. Implications to society?a. ____________________________________

    b. ____________________________________

    c. ____________________________________4. CWV problem of the business environment

    a. ________________________________________

    b. ________________________________________

    6

    Business environment framework:

    Definitions

    1. Socialistic:a. Dictionary.com:

    a theory or system of social organization that advocates the vesting ofthe ownership and control of the means of production anddistribution, of capital, land, etc., in the community as a whole.

    b. Enterprise ownership is by, on-behalf of, and for thesociety/community.

    c. Note similarities to prior discussions:1. Social contract theory: _____________________2. _______________________________________

    3. _______________________________________

    d. Country examples:1. ___________________________________________

    2. ____________________________________________

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    4/14

    4/11/2011

    4

    7

    Business environment framework:

    Definitions2. Totalitarian:

    a. Dictionary.com

    2. absolute control by the state or a governing branch of a highlycentralized institution.3.the character or quality of an autocratic orauthoritarian individual, group, or government: thetotalitarianism of the father.

    Government is controlled by dictator or small group. Succession is a power transfer

    b. Implications:1. Government determines who gets to engage in business

    a) Permits _________________________________________

    b) Expropriation _____________________________________

    c) Monopoly ________________________________________

    d) Elements of competition appear to exist, but tend to operate underMMR

    e) Key is this is not community owned or centrally planned.

    2. Government extracts from engagers/business fees/tariffs at will for both civic andpersonal gaina) Generally this is referred to as corruption.

    b) Can be an every level.

    1. Biblical example is ____ collectors

    c. Country examples:1. ________________________________________________

    2. ________________________________________________

    8

    Business environment framework:

    Definitions3. Adventure capitalistic:

    a. Term of Max Weber: Buccaneers, warlords, financiers who goforth solely to gain wealth for themselves.

    1. Not ulterior motive: self wealth gaining.

    b. Can operate/be found in most business environments.

    1. Can be found throughout history.2. Can be found in every type of country

    3. Why is this the case?

    a. ___________________________________________________

    b. ___________________________________________________

    c. Examples:

    1. Alexander the __________________________________

    2. Barbarians at___________________________________

    3. Adam _________________________________________

    4. Milton _________________________________________

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    5/14

    4/11/2011

    5

    9

    Business environment framework:

    Definitions

    4. Free market: Laissez-Fairea. Dictionary.com

    1.the theory or system of government that upholds the autonomouscharacter of the economic order, believing that governmentshould intervene as little as possible in the direction of economicaffairs.

    2.the practice or doctrine of noninterference in the affairs of others,esp. with reference to individual conduct or freedom of action.

    b. Individuals acting in their self interest will achieve an optimum

    allocation of societys scare resources: Adam Smithc. Therefore, governments should minimize their influences on

    the markets, allowing the markets to take care of themselves.

    10

    Business environment framework:

    Definitions5. Capitalism:

    a. Dictionary.com

    an economic system in which investment in and ownership of themeans of production, distribution, and exchange of wealth ismade and maintained chiefly by private individuals orcorporations, esp. as contrasted to cooperatively or state-ownedmeans of wealth.

    b. Class definition: Three components:1. Privately owned enterprises determine what to produce, how

    much to produce, at what price to sell, in order to make a profit.

    2. Free labor sells their services to enterprises for production.

    3. Profits are not consumed, but reinvested to expand the enterpriseand produce more profits.

    c. Relationship to free markets: ___________

    d. Country examples:

    1. ______________________________________________2. ______________________________________________

    [Note Purpose of business will directly affect view/CWV]

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    6/14

    4/11/2011

    6

    11

    Free Market: Government role1. Create laws to [Create the Market Box]

    a. Respect property interests

    1. Directly relates to capacity to exercise ones self interest

    2. Underlies basics of capitalism

    b. Allow free flow of goods and services so that pricing will reflectdemand

    1. Issue is whether this is local, regional or global flow

    c. Allow for efficient entry/exit of market players to maximizemarketable goods and services

    1. Issue is how much influence over quality and consumption

    2. Examples:

    a) ______________________________________________

    b) _____________________________________________

    d. Issue is how big is the box?

    12

    Free Market: Government role

    2. Police and road examplea. Community sets traffic rules for

    1. Safety2. Smooth movement of traffic/travelers

    b. Police enforce the rules1. Keeping traffic flowing smoothly.

    2. Keeping speeders at bay.3. Aiding in accidents.

    c. What about road construction?1. Does community have to undertake this?

    a) Toll roads

    b) Freewaysc) Local streets

    d. What about levels of rules?1. Speeding and accidents to resolve safety

    2. Licenses and safety and speeding rules3. Enforcement, licensing, safety and speeding rules

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    7/14

    4/11/2011

    7

    13

    Free Market: Government role

    3. General Aviation example

    a. License rules

    1. Pilots license and recurrent training required

    2. Airplane inspection required

    b. No police (limited FAA oversight)

    c. Open space

    d. Accidents fatal (risk/reward?).

    14

    Free Market: Government role

    4. Effects of Government:a. Absolute limits on entry

    b. Costs of entry and exit

    c. Limits on downside risks

    d. Protections of players1. Sellers monopoly/licenses

    2. Buyers consumer/investor

    e. Done via regulation

    f. However, see the issue of humanity in controllingthe market

    1. Break down of regulation corruption

    2. Break down of market priorities protection vs entrants vscaveat emptor.

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    8/14

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    9/14

    4/11/2011

    9

    17

    Free Market: basic econ.

    18

    Free Market: basic econ.

    1. equilibrium point

    2. Gen 3:15 re

    equilibrium

    3. Cost effects on chart

    4. Is this a

    1. Concept

    (aught)?__

    2. Reality (is)

    _______

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    10/14

    4/11/2011

    10

    19

    Free Market: basic econ.2. Labor market:

    a. Uses similar curves:

    b. What is the key problem with these curves in labor

    market analysis?

    1. _______________________________________

    2. _______________________________________

    c. Unemployment and Says law:

    1. Says law says: __________________________2. Does this really happen? ___________________

    a. See effective of destructive innovation in Chapter 5 Capitalism

    3. What are the current politicians arguing about this?

    a. _________________________________________

    b. _________________________________________

    20

    Free Market: basic econ.

    3. Division of labor:

    a. As labor specializes productivity increases.1. Shown by GDP per ___________________

    2. The greater the division of labor the greater the_________________________

    b. Leads to concept of Competitive Advantage1. Open markets increase available goods at

    reduced costs because each community canexploit its ________________________

    2. Thus open markets/laissez-faire lead to bestresource allocation and maximum availablegoods and services

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    11/14

    4/11/2011

    11

    21

    Problems with Free market

    assumptions

    1. Do governments stay out of the box?

    a. _________________________________

    b. _________________________________

    c. _________________________________

    2. Why does this happen?

    a. Tribe? _____________________________b. Power? ____________________________

    c. Lack of understanding? ________________

    22

    Problems with Free market

    assumptions

    2. Competitive Advantage: does it exist?a. What about farming and Africa? __________

    b. What about China and closed markets?__________

    c. Why are these examples relevant to today?1. Outsourcing? ____________________________

    2. Minimizing costs in manufacturing assumes_______________________

    3. Other factors? ___________________________

    d. Effect on running your business?1. _______________________________________________

    2. _______________________________________________

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    12/14

    4/11/2011

    12

    23

    Problems with Free market

    assumptions

    3. Free labor markets

    a. Why is free labor critical to free markets?

    1. ______________________________________

    2. ______________________________________

    3. ______________________________________

    b. Are unions positive to free market for labor?

    1. _______________________________________

    2. _______________________________________3. _______________________________________

    c. What are unions analogous to? Implications?

    1. ____________________________________________

    2. ____________________________________________

    24

    Can Governments participate in

    Free Markets?

    1. Buying goods and services?

    a. _________________________________________

    b. _________________________________________

    c. _________________________________________

    2. Does government demand cause a squeeze? If so, is it OK?a. _________________________________________

    b. _________________________________________

    c. Examples today: ___________________________

    3. Is the Box idea helpful?

    a. _________________________________________

    4. Business implications:

    a. ___________________________________________

    b. ___________________________________________

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    13/14

    4/11/2011

    13

    25

    Competition1. Definition

    a. Dictionary: http://www.merriam-webster.com/dictionary/competition

    1: the act or process of competing : rivalry : as

    a: the effort of two or more parties acting independently to securethe business of a third party by offering the most favorable terms

    b: active demand by two or more organisms or kinds of organismsfor some environmental resource in short supply

    b. Practical1. Father to daughter see that man over there? He works for the

    competition. He wants to put you father out of business. He wants tomake sure I cannot ever get a job in this business. In short he wants

    us to lose everything house, car, 2. Daughter thats awful! What are you going to do about it?

    3. Father that is why I go to work everyday and even work on theweekends!!!

    c. CWV see the wars in OT.

    26

    Competition: Economic

    perspectives

    2. Economists view competition

    1. Effective way to allocate ______________

    2. Creates product _____________________3. Creative destruction is ________________

    a. Only change is __________________________

    4. Are these true?

  • 8/6/2019 Lecture 5 BHJ Business Ethics

    14/14

    4/11/2011

    14

    27

    Competition3. Takes us back to the purpose of the company

    a. Innovation is it

    1. For the customer _____________________

    2. For the company _____________________

    b. Process of competition vs morality

    1. James 1:12-17 temptation, James 4:13-15 Gods world

    2. Scale affects a change in view

    a) Start with survival lots of prayer and miracles

    b) Become a stable company - ______________________

    c) Abundance = dominion - _________________________

    1) ____________________________________

    2) 10th________________________________

    Assignment 81. See if you can find business situations of competition

    in the Bible:

    a. Both OT and NT

    b. See if God encourages or Jesus comments on competition

    2. Read articles in Business Ethics readings 5-1 (pp.169-178) and answer the following questions:

    a. Do you agree with Friedman that the sole goal of a corporation

    is to increase shareholder wealth? Why or why not?

    b. When management gives to charity, do you think that

    management is actually stealing from shareholders as

    Friedman asserts?

    Maximum 3 pages

    Due April 1828


Recommended