QQI Level Three Normative Theories of Business Ethics Assignment Sample Ireland

This sample essay discusses the normative theory and how are they relevant to the modern world. It also discusses the three normative theories of business ethics. The three theories are the stakeholder theory, the stockholder theory, and the social contract theory.

In this context, it is important to note that the stockholder theory is not that much favored by the different members of the business ethics community. If you are running a business then an understanding of these theories acts as a guide to running the business smoothly. In contemporary times when new businesses are emerging in Ireland almost every alternate day, the three theories hold importance when seen from a business perspective. 

What are Normative Theories of Business Ethics?

There are at least three types of normative theories and they are the stockholder theory, stakeholder theory, and the social contract theory. These theories define that good decisions in business always result in the desired outcomes.

The objective of such theories is to make entities within a business structure understand the moralities and subsequently allow them to act sensibly and justifiably. In other words, these theories determine which are morally right and which are morally wrong based on an action’s consequences or the action’s features and character. In Ireland, there are many business houses and so the different normative theories are very relevant as they help entities within a business to make good decisions with desired outcomes. 

Describe the Three Normative Theories of Business Ethics

This section of the essay discusses in detail the three different types of normative theories of business ethics. 

Stockholder Theory

The stockholder theory also known as the shareholder theory is normative. This theory is also popular by the name Friedman doctrine as it was proposed by an economist named Milton Friedman. According to this theory, it says that a business firm’s responsibility is towards its shareholders. Hence the objective of such a firm should be to maximize the returns obtained by the shareholders. Many believe that the stockholder theory is the oldest perception as far as business ethics is concerned. 

A business’s objective is always to perform and achieve the business objective. Therefore a business person’s responsibility should be to manage the business in a manner so that the purpose is accomplished. Similarly, the management and the employees associated with the business should conduct in a manner so that the business purpose is achieved.

According to the stockholder theory, the activities of business owners or management are limited when it comes to spending resources to meet the stockholder’s interests. If the stockholder theory did not exist the stockholders would have ruled over social responsibilities. 

Stakeholder Theory

This theory of business ethics mentions that managers require paying attention to the important stakeholders in a business and also the stakeholder relationships. According to this theory, the stakeholders in a business should be allowed to take business decisions. Another important point regarding this theory is that the relationship between the managers and the stakeholders should be based on normative commitments and morals.

Therefore, observations suggest that the stakeholder theory emphasizes the interconnected relationships that exist between the suppliers, customers, investors, employees, communities, and other entities whosoever have a stake in the entity. The theory also states that an organization must create value for the stakeholders and not just the shareholders. 

Social Contract Theory

The social contract theory says that an individual’s moral and political obligations are very much dependent on an agreement or a contract among them. The contract helps the individuals entering into a contract to form a society in which they reside.

When seen from a business perspective it implies that if entities enter into a business then they do so by entering into a contract which serves as the agreement between the business parties. In Ireland, this normative theory of business ethics is very much adhered to while doing business. 

Importance of Normative Theories of Business Ethics

In a business, there are identified certain norms and standards for conduct. If these norms are absent then no business would have run smoothly. The various normative theories of business ethics only attempt to set the norms and conducts.

The application of the different normative theories and the standards to practical moral issues is the concern of business ethics. In Ireland and the rest of the world, there are several business houses and all of them require adhering to these three normative theories of business ethics. By doing so business entities can smoothly run a business. 

Conclusion

This essay defines a normative theory of business ethics and it also describes the three normative theories of business ethics in detail. In recent times when Ireland and the rest of the world are moving toward a capitalistic economy, these theories hold immense significance. The different Irish businesses require adhering to these theories as these theories help them to accomplish their respective business objective or maximize business profitability.

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This essay is an account of normative theories of business ethics. It helps to comprehend “What is a normative theory?” In total, they are three in number. The content describes the three normative theories of business ethics. QQIASSIGNMENTS.com is an assignment writing service provider which has written this content for its customers in Ireland. Such essays are very much part of the Irish academic curricula.

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