Topic > Essay on Indirect Blindness - 1127

The book Management Ethics, by Norman E. Bowie and Patricia H. Werhane, discusses the role the manager has in an organization and often faces a dilemma between shareholder theory and stakeholder theory. Shareholder theory holds that the manager should act only in the best interests of the shareholder, usually to produce profits. In contrast, stakeholder theory holds that the manager acts in the best interests of all stakeholders including (but not limited to): employees, customers, society, the environment, and shareholders. Companies promoting shareholder theory would theoretically force blind spots into managers' decisions, much like a carriage horse receiving blinkers (i.e. blinders) so that it can only see the road directly ahead of it. Unfortunately, shareholder theory will not promote the most ethical behavior since many decisions that are good for shareholders will be harmful to some stakeholders. Furthermore, the government has gone so far as to protect shareholder theory with the business judgment rule. According to Management Ethics, this rule is “a legal principle that presupposes that the manager acts in the interests of the company in the day-to-day management of the business”. This law demonstrates how the government has been negatively influenced by businesses instead of always serving the good of society. As humans become aware of their own blind spots, hopefully these gaps in ethical thinking will fade away and be replaced with conscious, ethically sound ideas.