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22 Cards in this Set
- Front
- Back
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=intent on maximizing the utility produced by a decision
=greatest good for greatest # =rightness based on consequences =which consequences and how counted, should they be foreseen, intended, actual? =Teleological "end" result |
consequentialism
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=concerned with overall utility
=Teleological "end" result |
utilitarianism
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=focus on the obligations or duties motivating a decision or actions rather than on the consequences of the action
=issues rated to duties, rights, and justice |
deontology
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always act in such a way that you can also will that the maxim of your action should become a universal law
=rule for deontology |
Kant's Categorical Imperative
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motivating aspects of moral character demonstrated by decision makers
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virtue ethics
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Responsibility: two dimensions
-Actus Reus -Mens Rea |
-guilty act
-guilty mind |
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Rightness or wrongness
of actions is determined by fundamental and objective rules derived from philosophical reasoning. Ex. Maxwell’s “Golden Rule” or Kant’s Categorical Imperative. |
Rights Theory (deontology)
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Rightness or wrongness
of actions is determined by fundamental rules established by their religious teaching. Ex. Ten Commandments. |
religion-based (deontology)
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how do accountants decide what is ethical? How to make ethical decisions?
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=AICPA code of conduct or professional code
=Sniff tests =Rule of thumb |
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Five sniff tests
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Would I be comfortable if this action or decision were to appear on the front page of a national newspaper tomorrow morning?
Will I be proud of this decision? Will my mother be proud of this decision? Is this action or decision in accord with the corporation’s mission and code? Does this feel right to me? |
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Rule of thumb
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Golden Rule: Do unto others as you would have them do unto you.
Disclosure Rule: If you are comfortable with an action or decision after asking yourself whether you would mind if all your associates, friends, and family were aware of it, then you should act or decide. The Intuition Ethic: Do what your “gut feeling” tells you to do. Categorical Imperative: You should not adopt principles of action unless they can, without inconsistency, be adopted by everyone else. The Professional Ethic: Do only what can be explained before a committee of your professional peers. The Utilitarian Principle: Do “the greatest good for the greatest number.” The Virtue Principle: Do what demonstrated the virtues expected. |
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General framework for applying ethical principles to “real world” situations that assess how the proposed actions impact the stakeholders of the business.
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Stakeholder Impact Analysis
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What are the fundamental interests of the stakeholders?
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Well-offness (more benefits than costs)
Fairness Right Virtuosity |
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=cost of cleanup from pollution, cost incurred by others down stream can be measured directly
=Environment costs |
externalities
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can measure indirectly through the use of these
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surrogates or mirror image alternatives
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How does one measure impacts of decisions on stakeholders?
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=Profit
=Certain measurable externalities |
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Cost Benefit Analysis
(Way to measure impact of decision on stakeholders) |
NPV of Proposed =
PV of Benefits – PV of Costs Action |
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Risk-Benefit Analysis
(Way to measure impact of decision on stakeholders) |
Risk-Adjusted or Expected Value of Net benefits=
Expected PV of future benefits - expected PV of future costs |
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Errors in Identifying Shareholders and Ranking Their Interests
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=Leaving out one or more stakeholders
=simply adding up the benefits and costs. This does not always reflect either the importance of a stakeholder or impact the decision will have. |
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How would one “rank” the varying interests of stakeholder?
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=Relative Financial Strength:
Or, what is their ability to withstand the impact of the decision? =Overriding Reasons: Risks to life, health or environment =Three Dimensional Approach: Legitimacy, Power, Urgency |
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5 question approach to EDM
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=profitable
=legal =fair =right =going to further sustainable development |
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inadvertent or knowing overuse of jointly owned assets or resources
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commons problem
(ex/ environment) |
