ANONYMOUS SELF-GENERATED CASE

Ethics - Anonymous Self-Generated Case

Ethics - Anonymous Self-Generated Case

Introduction

Business ethics is an academic field that studies moral and immoral action not only of individuals in business organizations but also of organizations as such. Business ethics is also concerned with the moral nature of the economic system in which individuals and their organizations act and think. It also discusses a broad range of issues related to business, ethics, corporations, and capitalism. It is common to make a distinction between issues that pertain to the nature of capitalistic system in which members of a corporation operate, issues that pertain to the organizational nature of the corporations, and issues that pertain to special areas of expertise related to actions of business (Joseph, 2006).

The problem presented in this case relates to an crucial aspect of Business Ethics in the corporate world. In the genres of marketing and advertising, the relationship with a client is personal and highly confidential. As a matter of fact, this information cannot be utilized for one's own personal business unless the previous company discloses or makes it public on its own discretion n (Lane, 2008).

In other words, he should not engage in activities that create a conflict or interfere with your duty to follow the terms of an agreement that he made with the previous employer. It is also against business ethical values and morals, to use your position in the former company to influence purchasing decisions for new businesses you own. This case highlights certain crucial issues related to ethical practices in the business scenario.

Principal-Agent Theory

To understand the contemporary use of this approach in the social sciences, one must turn to political economy. The principal-agent relationship, or agency, exists at the intersection of economics, political science, business, law, finance, and sociology. It is used as a heuristic tool to understand economic, social, business, or political relationships using self-interest as a guiding principal. This approach uses some, but not all, of the assumptions of microeconomics: those human interactions are best understood as a meeting of two self-interested and rational actors with relatively fixed preferences trying to maximize their own utility—but both of who have less than complete information (Soltis, 2005).

In political science, the principal-agent relationship is usually studied by rational choice scholars. The rational choice paradigm uses economic assumptions of human nature to study political outcomes. As such, rational choice scholars begin with assumptions of rationality as well as the maximization of (relatively) fixed goals. These are the strong assumptions of rational choice. For example, the assumption of wealth maximization often translates to power maximization or reelection for political leaders. It also includes several weaker assumptions, including no information costs; no transaction costs; no collective or organizational costs; no transportation costs; and no role for history, institutions, or culture. There are simplifying assumptions that are not true, per se, but they are held to be true for the parsimony of the model. However, some authors do not include all of the assumptions (or they lift or “assume ...