discuss social contract theory and apply social contract theory to a business situation you are familiar with. To what extent does SCT help to explain differences in ethics and ethical perspectives in a culturally diverse setting?

What is the efficacy of SCT in describing issues related to business ethics?

Answer:

In answering this question,it is important to understand that the social the theory of social contracts is an ancient philosophical concept which states that the ethical and political responsibilities of an individual relate to an agreement that he has with any other person within a society.As in the form of legislation, the agreement can be written or unwritten arrangement of social norms and customs.For business ,the theory of social contract comprises of the obligations that businesses of all sizes owe to communities they operate in.This involves corporate philanthropy, corporate social responsibility and corporate governance.This theory further clarifies that the principles of ethics which we are following as a community are made by us for our own welfare. We make rules according to our wisdom and nature so we can eliminate various negative elements from our lives such as poverty.  Additionally, another critical components which this theory has enlightened is that the power is essential for protection and implementation.

One of the great example for social contract theory is the labor union which tirelessly fight for the of  employees. Basically, employees selects the leadership of the union where by the majority of votes determines the winner which empowers the union to take necessary steps for the welfare of the employers as well as to protect the rights of the employees. Different cultures have different people who possess different ideas and notions so the way of perceiving ethics is also different from one culture to another.

This theory helps in explaining the difference in ethics because this theory argues that the ethics are made not founded but they are made. It is important to remember that the principles of ethics can be different for each one of us because we all have different thought when it comes to reasoning. There are various different issues that  exist in relation to  business ethics such as lack of  proper working environment, government regulations, unreasonable wage rate which could be solved with the help of social contract theory as defined above. Through this theory the employees can persuade  their unions to support them in gaining their rights by use of their numbers as their  strength.

One of the important role of businesses is  giving back to society, a role that has come to be acknowledged as social responsibility. Generally, businesses have an ethical obligation toward members of a given society that they operate and work in. The theory of social contract creates a mutual agreement between businesses and the communities that surrounds them. The communities basically allows business to be operated in their localities for a certain reasons that improve the welfare of the whole community. These benefits include economic efficacy, better decision-making and use of modern technology and resources. However, all these  have to be carried out within the limits of the stipulated laws in these societies.