Business ethics – PHI2397 EXAM REVIEW

PARTIE I: INTRODUCTION: CORPORATE SOCIAL RESPONSIBILITY Text: Friedman, “The Social Responsibility of Business is to Increase Its Profits”, pp. 249-253  Friedman has a way of simplifying ideas (into categories) o We should try to find clarity on those categories  He is all about maximizing profits – no morals are taken into account  Corporate executives must act in the interest of agents  Eleemosynary: origin is Greek o Eleemosyn = compassion  You don’t know the actions you’ll take to achieve the goal the business has in mind, there may be obstacles along the way. You don’t know if your actions will be effective.  Businesses should be doing their “jobs” privately.  How can something, an act of public interest, be in the company’s advantage? o You do it to increase the chances of your customers liking you o It makes the company seem like thy have a social conscience o A company can engage in social responsibility to engage in a community and increase their profile and get the support of the community o It’s better for companies to act as you can WITHIN the law Text: Stone, “Why Shouldn’t Corporations Be Responsible?”, pp. 254-257.  He is more about morals  Is there an actual relationship between the shareholders and the management of the company? o There is no actual relationship between them.  There are times where you can be justified for breaking a promise (company’s pov) o E.g. not following regulations to respond to environmental/community benefit  There are times where you can be justified for breaking a promise (shareholders pov)  Shareholders actually determine who gets on to the board of directors  The role of corporate executives are fiduciaries  Father is like the corporate executive  Child is like  Positivism: only take in considerations things that can be explicitly verified.  Executives weren’t allowed to engage in social responsibility o Stone argues you can’t just discount