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“Business Ethics” Book by De George

Causal and Moral responsibility

Causal responsibility is simply a descriptive sagacity of responsibly. Under the causal responsibility, intention or agency is not imputed to the actual cause of an action. Thus, Causal responsibility does not carry any implication of blame or praise in an action. The causal responsibility is inclined towards mere happening instead of the doings. For instance, in a situation where a child spills tea on a rug, it is in order to state that the child is fully responsible for the action of spilling the milk despite having done that without premeditation. In this case, it is almost impossible to impute a purpose or intention (De-George 7).

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On the other hand, moral responsibility is a condition of getting praise or blame for an accomplishment or blunder within the scope of an individual’s moral obligations. Under moral responsibility, the moral agent has the ability to premeditate over an act or omission before actually deciding on the course of action. For instance, going against the basic human ethics as controlled by the free will may attract blame towards the moral agent (De-George 7).

Excusing conditions for moral responsibility


Ignorance may excuse a moral agent from taking blame or praise since the free will is not activated within the unwritten obligations which control actions. Basically, the element of ignorance can be defined as lack of knowledge on repercussion of committing an act. Therefore, the moral agent may be excused from blame or praise in a circumstance of lack of knowledge. For instance, on the first day of joining a college, a male student may visit the staff bathrooms without knowledge of the moral rules. Therefore, he may not be held accountable for his action unless proven otherwise. However, upon orientation, a second offense may attract blame for the act (De-George 8).

Inability to act otherwise

A moral agent who is unable to act within the scope of what is defined as morally responsible may be excused from blame. The inability may be as a result of a disability in a moral agent. For instance, in a banking hall queue, a crippled customer may jump the queue without necessarily attracting rebuke from other customers since this action is not morally responsible. Despite the fact that this action is not morally upright, the moral agent is excused from blame because he or she is not in a position to act like the other normal customers (De-George 11).

Role of the excusing conditions

In terms of moral responsibility


Ignorance may facilitate decision focus within wrongness and rightness on intrinsic characteristics, with the consequences being a negligible influence on the same. On the other hand, ignorance may help to build on what is commonly referred to as “ethics of common sense” (De-George 19) to activate functioning on self-realization and naturalism. This element may assist in locating the good will, and proper motive as a component of rationality in exercising moral responsibility.

Inability to act otherwise

The aspect inability to act otherwise may regulate the element of good, happiness as part of moral significance, good character, practical wisdom, and the contemplative faculty as part of understanding the special needs and actions of the disabled agents. This knowledge may make it easy to adjust the free will to fit in the unwritten rules controlling moral responsibility (De-George 12).

In terms of moral accountability


The only intrinsically and unqualifiedly good is the good will. Basically, the ‘good will’ has nothing to do with happiness. Therefore, wit, intelligence, and judgment are generally of good value to human life, but might turn out to be timid when employed for bad rationale. Thus, the scope of ignorance will make it easy to align moral accountability to the free will of the ignorant moral agent (De-George 14).

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Inability to act otherwise

Since the good will cannot be perverted since it is “intrinsically and unqualifiedly good” (De-George 13), it is just a disposition since it functions around action oriented teleological system. Therefore, inability to act otherwise must denote the good will premise from the fact that all rational things often aim for ‘good’ through action oriented respect, mutual coexistence, and deeply entrenched social values when testing moral accountability (De-George 13).

Difference between a stockholder and a stakeholder

A shareholder is part of the stakeholders in a corporation by the fact that he or she has invested and owns part of such a company. On the other hand, a stakeholder may or may not be a shareholder in a company. For instance, employees, suppliers, and bondholders are part of the stakeholders who cannot be shareholders.

Levels of moral responsibility within the corporation

The levels of moral responsibility in a corporation have three building blocks of learning consisting of a supportive learning environment, concrete learning processes, and practical leadership that reinforce innovation. The managers are expected to play a significant role in setting up the learning environment for their employees. This culture is meant to create an ideal climate for innovation and communication among the employees. The team work ethics spell the rules of engagement, expected behavior, and repercussions for misconduct. These rules appreciate diversity and uphold integrity in judgment (De-George 18).

Basically, ethics denote sets of laws or moral systems that provide a basis for discerning whether an action is correct or erroneous. Therefore, organizations have ethical principles that guide other employees when carrying out their duties. The ethical code consists of laid down structures to keep staff in healthy and stable mind in their duty of serving the interests of an organization through regulatory ethical communication models. These models are the motivation to acquire, bond, comprehend, and defend. Therefore, a proactive behavior control system should function within a structured reward system. When the system functions within accepted parameters, employees will eventually develop a self-consciousness to deliver quality services and defend the organization as part of a family unit (De-George 6).

Human process based intervention strategies are presented as directed at making an improvement to the general state of relationships between individuals and within and among groups in an organizational set up. To attain this, a sensitive form of social responsibility testing is often done to ensure that both management and employee teams remain accommodative to the basic needs of their counterparts. An emotion testing program is often used to test the emotional position of employees towards each other after (De-George 6). This is meant to ensure that employees care much about the social needs of their counterparts. The main driving point in these particular approaches is the argument that the good state of relations, information transfer, and collaboration are essential in fostering good environments for the flourishing of an organization.

The corporation is to be held responsible for its actions as a moral entity in terms of all of its employees since moral responsibility goes beyond the corporate structure. Moral responsibility is controlled by the good will and personal initiative from all the employees to become morally responsible workforce. The relationship between the financial health of a company and its levels of security can never be overemphasized. In a nutshell, contract security is a collection of various processes and procedures put in place within an organization to ensure that the overall objectives and operations of the company run smoothly. Therefore, the elements of moral responsibility should be dynamic to accommodate the aspect of free will in exercising moral responsibility (De-George 28).

Significance of open public system of corporate disclosure

There should be an open and public system of corporate disclosure at the level of corporations to reinforce the essential ethical principles which the employees must uphold, these are, integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. Lack of corporate disclosure may lead to conflict. The conflict of interest will arise if the interest of one group contradicts with the interest of another group. The conflict is often based on the creation and distribution of wealth. An example of conflict of interest is the agency problem. It arises from the conflict of interest between the managers and the shareholders’ of a company (De-George 41).

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The corporate information plays a significant role in resolving the conflict by applying the social construction process. In the case of agency problem, the shareholders will review the benefits received by managers against the policy of the company. The second category of conflict of interest is between the debt providers and the shareholders of the company. They face the risk that the capital they provide will not be used as intended. Thus, corporate disclosure will provide information on a periodic basis to serve the interest of the various users (De-George 19). It further helps to resolve conflict that may arise between users through disclosure of the required information.

When there is no public disclosure, the top management of a company may use complex nature of the financial statements and the weaknesses in the business standards to manipulate the financial records with an intention of enriching themselves. This may be characterized by manipulation of the balance sheet to reflect high performance. Besides, they may inflate the asset values; overstate the reported income and cash flow and eliminate the liabilities from the financial records. For instance, in the case of Enron Company scandal, the top management committed ethical dilemmas such as conspiracy, securities fraud, false statement, and insider trading since the organization did not have an open system of disclosure. For instance, in the US, an individual convicted of stealing information for his or her employers and uses that information to trade with another party behind public disclosure is culpable of insider trading (De-George 21). For instance, an employee of company A, who learns of a merger between company A and Company B, may be guilty of insider trading when the employee uses this information to buy shares in company B before the merger.

Misappropriation and insider trading

Misappropriation is the use of company resources for wrong purposes that are aimed at fulfilling private desires at the expense of a company. Misappropriation involves the act of fraud within a company for personal gains, which do not align with the goals and vision of such an organization. Misappropriation is related to insider trading in the sense that those who practice insider trading are inspired by the urge to misappropriate resources for the private gains (De-George 11).

Benefit of insider trading

Insider trading may be deal in accelerating the security prices to their ideal value within the shortest time possible. Basically, information from parties involved in insider trading is very accurate and can easily service the market dynamics. For instance, an information such as company A’s intention of acquiring company C may benefit the insider traders in the sense that they may purchase just the right amount of shares from company C to fit the expectations of company A. In the end, after acquisition, the stock prices will be quickly adjusted to match those of company A.

Demerits of insider trading

Insider trading locks out a vast majority of interested parties from benefiting in any business activity. Since the insider information is only shared among fewer people, the vast majority may fall victims of manipulating trade activity. For instance, when purchasing stocks, an insider trader may get accurate information before the actual purchase and benefit heavily to buying all the right stocks. The vast majority may have to buy the other stocks without knowing the consequences of such business decision. In the end, the vast majority might lose out on potential and beneficial business to a few individuals (De-George 32).

Moreover, carrying out insider trading on a large scale may dislocate a market. Specifically, sophisticated insider trading may result in dwindled confidence among traders, especially when insider deals leak out. For instance, during the initial public offers (IPOs), insider trading in large scale may translate into buying only the desolate stocks while few individuals acquire the hot stocks. In the end, the confidence in such markets may be eroded, especially when the scandal is leaked out (De-George 45).


De-George, Richard. Business Ethics. 7th ed. 2013. New York, NY: Pearson Education Limited. Print.

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