1. Ethical Theories

5. makes use of self interest as the measuring rod for actions performed

6. is equated with an individual’s personal interest but it is equally identified with the interest of an organization or society

9. Kantian Ethics Proponent: Immanuel Kant (1724-1804) This theory introduces an important humanistic dimension to business decisions, which is to behave in the same way that one would wish to be treated under the same circumstances and to always treat other people with dignity and respect.

12. Normative theories of business ethics Stockholder theory: expresses business relationship between stock owners and their managers running the day-to-day business of the company. As per the theory, managers should pursue profit only by all legal, non-deceptive means.

13. Normative theories of business ethics Stakeholder theory: argues that a corporate’s success in the market place can best be assured by catering to the interests of all its stakeholders (shareholders, customers, employees, suppliers, management and the local community). This objective is achieved when corporations adopt policies that ensure an optimal balance among all stakeholders.

14. For example, Marico, the makers of Parachute oil, discovered a harmless tint in the oil from one of its production lines. The company withdrew the batch from the market, shut down the production line, but kept the workers on payroll and involved them in the investigation of the cause. In a short time, the workers located the cause, rectified it and resumed production

15. Normative theories of business ethics Social Contract theory: is based on the principles of “social contract”, wherein it is assumed that there is an implicit agreement between the society and any created entity such as a business unit, in which the society recognises the existence of a condition that it will serve the interest of the society in certain specified ways.