New Note

• Corporations are NOT moral agents with moral obligations but agents of capital (agents of shareholders who own the corporation and provide its capital); Milton Friedman

  • Corporations do NOT owe a moral obligation to society and are obligated to follow the law, no more

• Corporates ARE moral agents as group dynamics (groups of employees behave differently than any single employee would behave in isolation b/c group dynamics transcend individual reason and autonomy

  • Responsibility and accountability upon corporations b/c increase likelihood that owners and controllers will take actions to prevent individuals/groups from making unethical decisions

• Agents of Society View and corporate social responsibility (obligation for a corporation to expend corporate resources doing good and meeting societal needs)

  • Social contract that corporate social responsiveness is morally required; corporation is the result of a contract b/t founders and society; Thomas Donaldson

• Group dynamics and corporate social responsibility/ social contract views corporations as agents of society

Module 19 How to Encourage Employees to Act Ethically

• Hiring ethical people: integrity, intelligence, energy in employees and managers

• Treating employees well: moral spillover; accept boss’s authority if treated fairly 

• Code of ethics: encourages leaders and employees (follow leaders) for a positive climate, moral awareness, and more ethical behavior

• Effective ethics training: inform employees that acting ethically is part of their job and advocate for ethics

Structuring compensation: compensation can incentivize people to work hard and ethical; be reasonable, do not overemphasize performance, reward and promote doing the right thing