Chapter 1: The phrase “Corporate social responsibility” refers to a corporation’s responsibility towards society. The topic is subjective, so naturally there is some disagreement about those “responsibilities”. Like do companies have a responsibility to donate money for charities or to give their employees higher wages and customers safer products? Or is their responsibility to maximize profit for their shareholders or stockholders?
Milton Friedman argues that in a “free enterprise, private-property system” Corporate executives work for the “owners” of the company, and today these “owners” are the company’s shareholders. As their employees, the executives has a “direct ...view middle of the document...
But it’s wrong to use the company’s resources and help others at the expense of shareholders.
Although, Friedman thinks it’s wrong to help others at the expense of shareholders, he does think that companies eventually provide great benefits for society. He argues that when a company tries to maximize stockholder’s profits in a “free-enterprise” economy, competition will force it to use resources more efficiently than competitors, to pay employees a competitive wage, and to provide customers with products that are better, cheaper and safer than those of competitors, so when managers aim to maximize profit they will end up benefiting society.
Unlike Friedman’s theory the stakeholders theory states that a manager should take all stakeholders interests into account when making decisions, a manager should try to balance the interests of stakeholders so each stakeholder gets a fair share of the benefits the corporation produces. (PS: This theory is all about who should get the profits.) it rejects Friedman’s view that resources should not be used to benefit other stakeholders at the expense of shareholders.
Today, many businesses accept stakeholder theory. Which theory makes the most sense and seems most reasonable; the 2 theories are critical to one’s view of the important question: What is the purpose of business? Our aim here is to explain corporate social responsibility so that we can explain how corporate social responsibility is related to business ethics. So how are business ethics and corporate social responsibility related? Being ethical, according to most scholars, is one of the obligations companies owe to society. In this respect, business ethics is a part of corporate social responsibility.
Ethic of care/ an ethic that emphasizes caring for the concrete wellbeing of those near to us.
Ethic of virtue/ an ethic based on evaluations of the moral character of person or groups.
Utilitarianism is the moral view that in any situation the right course of action is one that will provide people with the greatest amount of benefits while minimizing harms. Specifically it holds that the morally right course of an action is any situation is the one that, when compared to all other possible actions, will produce the greatest balance of benefits over costs for everyone affected.
It is a theory that says we should strive to do what is best for everyone in society, and that we do what is best for everyone when we take into account all the benefits and harms that everyone will bear as the result of our actions.
It says that the right action is the one whose combined benefits and costs outweigh the combined benefits and costs of every other action the agent could carry out.
How to apply it: (slides)
• First, determine what alternative actions or policies are available to me in that situation.
• Second, for each alternative action, estimate the direct and indirect benefits...