Midterm Study Guide Essay

PHIL 3730
Business Ethics
Midterm Examination Review

The midterm examination will consist of ten multiple choice questions worth four points each, three short answer questions worth ten points each, and one approximately page-long essay question worth thirty points. I will give you four short answer questions on the exam from which you will choose three to respond to. I provide here a set of three essay questions. Two of these will appear on the exam, and you will choose one of them to respond to. The essay questions may require you to go somewhat beyond just what we discussed in class, since you’ll be able to prepare for them in advance.

Terms
Some technical terms we have used in class or seen used in the readings:
Normative vs. descriptive
Externalities
Public Goods

Basic Ideas
What is the purpose of a management theory?
What is the purpose of an ethical theory?
How do management theories and ethical theories relate to each other?
What are the basic differences between the three ethical theories we have studied?
What are the main questions that each ethical theory tries to answer?

Friedman on Stockholder Theory
Employer-employee relationship between stockholders and managers
Similarities and differences between Friedman’s view and the “dominant model” from Freeman

Freeman on Stakeholder Theory
Problems with the “dominant model”
The Separation Fallacy
The Open Question Argument
The Responsibility Principle
Different ways of defining “Stakeholder”
The main goal of the corporate manager

Kantian Deontology
What is deontology?
What sorts of beings are “ends in themselves”?
Kant’s second formulation of the Categorical Imperative
Applying the second formulation (e.g. to lying)

Utilitarianism
The Greates Happiness Principle
Mill’s conception of ‘happiness’
Why base a moral theory on happiness?
Higher and lower pleasures

Smith on the the Profit Motive and Wealth Creation
How does the division of labor increase productivity?
What is the role of exchange in generating wealth for individuals and nations?
How does Smith defend the role of the profit motive in a market economy?

Locke on the Justification of Private Property
The general puzzle the Locke is trying to solve
The main steps in Locke’s argument
The Lockean Proviso

Schmidtz on the Institution of Property
How do property institutions internalize externalities?
Given that land is a scarce resource, how private property be justified?
Lessons from: Blast fishing, sea turtles in the Cayman Islands, Jamestown, Hutterites

Sen on the Economics of Business Ethics
Why trust (and not just self interest) is important for facilitating mutually beneficial exchange
Similarities between challenges of production of public goods and challenges of production within a corporation
How a corporation with strong internal values can be at a competitive advantage over corporations without strong internal values

Frank on Social Responsibility and Market Competition
One-shot dilemmas
How firms that cooperate in one-shot dilemmas can out-compete firms that do not by solving commitment problems with employees, customers, and other firms
How socially responsible firms can gain a

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