Category: Class notes

Class #3 (Ethics and Decision Making)

Milton Friedman (The only social responsibility of business is to earn profits while following the law and basic ethical customs)
Ed Freeman and Stakeholders Theory (Companies should seek to align the interest of all primary market)
Value-based management: Good managers…1) Understand what business they are in 2) Understand the value proposition of that business 3) Do not take advantage of vulnerable people
Can You Train Business School Students to be Ethical?
Why people do wrong in business? 1) Some people know what is wrong, and just don’t care 2) People know what is wrong, but are under personal,
financial, social or legal pressure to do it anyways 3)The most dangerous source: people come to believe that what is wrong is right. This happens because: a) People tend to adopt the values of the organizations that they are in b) People and organizations tend to adopt values that are self‐serving.

Fixed costs (intercept) vs. variable costs (slope)
Marketing and accounting are not working against each other but together – “healthy competition”
Consumer behaviour is always different – in Canada, people might prefer to buy bigger cars whereas in India, Tata Motors is able to sell the “Nano”

iClickers
Russian vodka – negative externalities – government intervention
Restaurant owners – corkage fees – good or bad for owners – class discussion (two groups to argue for/against the policy upfront)