Theoretical framework Research Paper Example | Topics and Well Written Essays - 1250 words

Theoretical framework - Research Paper Example There are three key theories that seek to explain business ethics. The stockholder theory expounds on the fact that businesses are only obligated to earn profits for their stakeholders and are not necessarily indebted to the wider society (Shafritz, Ott and Jang, 2005). This theory holds the premise that a company is only morally obligated to fulfill the expectations of the people who invest in it. The social contract theory, on the other hand, which is another business social theory, stipulates that all companies function under a tacitly understood contract with the community they are established in. Business decisions are often affected by the social theory that is supported a company. For instance, if a small company was approached with a buyout offer by a larger organization that is known for its unethical practices, the stakeholder theory would support its consideration of how its stakeholders would gain from its agreement to this contract (Shafritz, Ott, and Jang, 2005). Howeve r, the social contract theory would call for the consideration of how the bigger companies operations would affect the entire community. Business Economic Theories Business economic theories seek to explain how businesses function in local and international financial systems. The business cycles theory holds that during a business cycle course, an economy develops, reaches a definite peak, and then experiences a downturn which is then followed by a recession prior to beginning another upturn. Another business economic theory, the "under-consumption" theory, holds that an excessive amount of income is directed to the wealthier classes instead of being channeled into investments that will create more opportunities for the disenfranchised groups in society (Shafritz, Ott and Jang, 2005). This can result in social instability. Business Educational Theories Business education management theories are basically the foundation of any operational and productive businesses, and seek to explai n how the organizations of different eras have been organized. The classical management theory is a theory that seeks to explain the best way for employees to execute their responsibilities. It is divided into the classic administrative and classical scientific branches. The classical scientific division mainly has to do with scientific mindset of boosting productivity (Shafritz, Ott, and Jang, 2005). Later management theories which moved from concentrating on the division of tasks to the issues that affect employees, were based on concepts such as those espoused by Abraham Maslow; who theorized that all workers possess a hierarchy of needs that needs to be acknowledged and catered to so that they can experience satisfaction with their lives. The Japanese scholar, Dr. William Ouchi, would create the Japanese Management Style which supports Maslow’s hierarchy in its assertion that even though it is natural for employees to want to work, all jobs should be created with the aim of keeping workers happy by means of fulfilling their psychological needs. Business Leadership Theories In business organizations, good managers will inspire their workers and assist them to realize their personal as well as professional objectives. Business leaders accomplish this by using various leadership theories. The trait theory holds that leaders who have characteristics such as openness, intelligence, self-efficacy, adjustment