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10.international Business Ethics
10.international Business Ethics
10.international Business Ethics
Globalization of Ethical
Decision Making
Capitalism, Economics and Business
Ethics
• The first decade of the 21st century was a turbulent
one
– Ethical misconduct and excessive risk-taking
seemed rampant
– Many stakeholders lost confidence in businesses
• Lack of fairness, trust and honesty made
stakeholders question the stability of major
institutions, as well as the intentions of executives
• Even the competence of governmental regulatory
institutions was called into question
Risk Compartmentalization
• Occurs when profit centers within an organization are
unaware of the consequences of their decisions on
the organization as a whole
– No single person can be blamed for negative
outcomes that occur because of systemic
problems
• Adam Smith
– Laissez-faire capitalism
• John Maynard Keynes
– Government can stimulate the private sector
• Milton Friedman
– Return to self-regulating free market system
Keynes and Friedman Agreed That: