• John Locke: Emphasized individual rights and liberties as foundational elements of the social contract.

• Jean-Jacques Rousseau: Emphasized the concept of general will and the importance of societal participation in shaping the social contract.

Historical Foundations:

• The Enlightenment: The Enlightenment period saw a shift towards reason, individualism, and the pursuit of justice, setting the stage for the development of social contract theory.

• The American and French Revolutions: These revolutions emphasized the rights of individuals and the importance of self-governance, contributing to the emergence of modern social contract theory.

• The Industrial Revolution: The rapid growth of industry and capitalism raised concerns about inequality and the exploitation of workers, prompting discussions about the role of government in ensuring justice and social welfare.

Advantages and Disadvantages

Advantages:

• Foundation for Rights: Social contract theory provides a framework for understanding individual rights and liberties.

• Basis for Law and Governance: It helps justify the existence of laws and governments as institutions for maintaining order and protecting individual rights.

• Promoting Cooperation: The theory encourages individuals to cooperate for the greater good, acknowledging that collective action is necessary for societal progress.

Disadvantages:

• Limited Applicability: Some argue that the theory is not universally applicable, as it relies on consent, which may not be truly possible for all individuals.

• Potential for Abuse: The concept of “general will” can be misused by governments to justify oppressive policies.

• Ignores Social Factors: The theory can overlook the influence of social structures and inequalities that prevent individuals from fully exercising their rights.

GVV Alignment

My GVV work emphasizes values like integrity, fairness, and respect for others. Social contract theory aligns with these values by emphasizing the importance of equitable treatment, the protection of individual rights, and the upholding of societal rules and laws. However, it is important to consider the limitations and potential for abuse of the theory, ensuring that decisions are made ethically and in a way that promotes true justice and fairness.

Section 2 – Analysis of a Current Business Situation

Business Summary:

Company: Peloton Interactive Inc.

Industry: Fitness and Wellness

Values: Community, Empowerment, Innovation, Performance, and Passion

Vision: “To create a global community of connected fitness.”

Mission: “To make fitness accessible and enjoyable for everyone, anytime, anywhere.”

Public: Yes

Financials: Publicly traded company, experiencing financial challenges in recent months.

Size: Global presence with over 6.6 million members.

Interest: I chose Peloton due to its recent public scrutiny regarding its handling of a potential inappropriate vendor-customer relationship. The company’s values and mission emphasize community and accessibility, making this conflict particularly interesting to analyze.

Conflict of Inappropriate Vendor-Customer Relationship:

Details: In late 2022, Peloton faced criticism for an incident involving a celebrity instructor who was accused of an inappropriate relationship with a customer. The incident led to an internal investigation and the instructor’s eventual dismissal from the company.

Impact on the Business:

• Reputational Damage: The incident tarnished Peloton’s reputation, particularly concerning its commitment to community and inclusivity.

• Financial Losses: The incident likely contributed to declining stock prices and investor confidence.

• Loss of Customers: Some customers expressed dissatisfaction and discontinued their subscriptions.

• Legal and Regulatory Concerns: The incident triggered potential legal and regulatory scrutiny, highlighting the importance of ethical conduct and appropriate boundaries in customer relationships.

Conflict with Values and Purpose:

• Company Values: The incident directly conflicted with Peloton’s stated values of community and empowerment, raising concerns about the company’s commitment to creating a safe and inclusive environment for its members.

• Cultural Norms: The incident violated societal norms of appropriate behavior and boundaries in professional relationships.

Conclusion

This case highlights the critical importance of ethical conduct and strong boundaries within vendor-customer relationships, especially in industries like fitness and wellness that promote trust and community. It underscores that even companies with strong values and mission statements can be vulnerable to inappropriate actions that can severely damage their reputation and financial stability.

This incident also reinforces the need for companies to establish clear policies and procedures for handling potential conflicts of interest and inappropriate behavior, ensuring that their actions align with their stated values and purpose.

Scholarly Sources:

• “The Social Contract: A Modern Interpretation,” by David Gauthier. This book provides a contemporary perspective on social contract theory, exploring its implications for individual rights, justice, and societal governance.

• “Ethical Decision-Making in Business: A Values-Based Approach,” by Laura Hartman. This book explores the importance of ethics and values in business decision-making, providing practical frameworks for navigating ethical dilemmas.