College of Business Administration

Social Responsibility:

The Legal and Ethical Environment of Business

Discussion Questions for Weekend 1:

1) Consider the following, from Bellah et al. The Good Society:

"We often hear that only technical reason can really be taught, and our educational commitments from primary school to university seem to embody that belief...But technical reason alone, as we have seen, is insufficient to manage our social difficulties or make sense of our lives...Even when we see that the solution must have something to do with institutions, we once again look for a technical solution in some kind of "management science" rather than trying to understand the inherently moral nature of institutions...

How does your EMBA educational experience so far 'square' with the preceding claim? What education and/or experience have you had with the 'moral' side of corporations? Do you factor such considerations in to your business decision-making?

2) It has been claimed (ref: The Good Society) that...

The corporation is a central institution in American life about which we will have much to say in this book...As an institution it is a particular historical pattern of rights and duties, of powers and responsibilities, that make it a major force in our lives...Individual corporations are organizations that operate within the legal and other patterns that define what a corporation is.

Do institutions represent 'objective' realities, or are they rather 'socially constructed'? What does this imply about their role in bringing about the 'good society'? About our ability to reshape them?

3) It is further argued that "what we have often forgotten is that though economic markets operate in some ways through an autonomous logic of their own, they can exist only because of certain institutional arrangements..."

What are these 'institutional arrangements that brought corporations into being'--and which continue to support their existence? Can you conceive of corporations without supporting institutions? How autonomous is the free market?

4) What does it take to be considered a 'moral entity'? Can the corporation appropriately be considered a moral entity? Why or why not?

5) What (if any) is a corporation's social responsibility? Where the corporation is concerned, what are the differences between moral responsibility, social responsibility, and legal responsibility?

6) What moral justification can be offered in defense of market economies?

7) What is the invisible hand, anyway? What 'evidence' do we have of its operation?

8) Upon what view of human nature is the notion of the free market based? Is this an 'accurate' view? What evidence can you offer in defense of your answer? Is human nature subject to change?

9) What is the relationship between government and economics? Does one 'type' of economic system presuppose the existence of one 'type' of political system? Why or why not? 10) Jeffrey Lustig argues..."What is necessary is not an impossible attempt to separate the corporation from its social integument...but to acknowledge their mutual dependence and to ensure that the corporations become socially accountable." What critics are arguing for is...to bring the corporation into full democratic accounting with respect to its own claim to be a "citizen."

How might social contract theory 'square' with this view? What are the specific corporate governance implications of viewing the corporation as a citizen? What would the purpose of the corporate enterprise be under such a model?

11) Rachels outlines social contract theory as the view that "morality consists in the set of rules, governing how people are to treat one another, that rational people will agree to accept, for their mutual benefit, on the condition that others follow those rules as well."

*What are the rules that you would agree to under such conditions?
*How might acceptance of the premises underlying social contract theory have impacted the playing of the 'Commons Game'?

The following questions relate to Bellah et al.'s The Good Society (no, this [thankfully] is not an assigned text...)

12) In 'The Good Society' Selznick is quoted as calling corporations "private government."

Are corporations private governments? What are the similarities and differences between corporations and governments? Which institution is more powerful in the world we know?

13) In `The Capitalist Threat', George Soros points out that...

The main scientific underpinning of the laissez-faire ideology is the theory that free and competitive markets bring supply and demand into equilibrium and thereby ensure the best allocation of resources. This is widely accepted as an eternal verity, and in a sense it is one. Economic theory is an axiomatic system: as long as the basic assumptions hold, the conclusions follow. But when we examine the assumptions closely, we find that they do not apply to the real world.

What are the assumptions underlying the free-market model? Do these assumptions hold in the 'real' world? To the extent that they do not, what public policy recommendations are implied?

14) Distinguish the constructs of effectiveness and efficiency. Provide a definition for efficiency. What is the virtue of efficiency? What would the practical implications were SDSU to become more efficient? What would you recommend in situations in which gains in efficiency were to come only at the expense of organizational effectiveness?

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