Summary Business ethics OCR RS A level ethics

KEY WORDS

- Capitalism: an economic system based on private ownership of how
things are made and sold, in businesses completely free with each
other to make profits
- Shareholder: a person who has invested money in a business in return
for a share in the profits
- Stakeholder: a person who is affected by or involved in some form of
relationship with the business
- Consumerism: a set of social beliefs that put a very high value on
acquiring material things

, Milton Friedman

 Shareholder theory: a company's only ethical responsibility is to
maximize profits for its shareholders, if it follows the law.
 He believed that businesses should not engage in social or ethical
issues beyond what benefits their owners
 Corporate social responsibility (CSR) is a distraction from a business's
true purpose and could harm economic efficiency.
 The only responsibility the company has is to make money, to spend
money on CRS projects was stealing money from shareholders.
 “Only people have responsibilities, a corporation is an artificial person”




Crane & Mattern

 Defined stakeholders as an individual or group which either:
- Is harmed by or benefits from the corporation
- Whose rights can be violated, have the right to be respected by the
corporation
 “Stakeholder pressure may oblige companies to do what is right, just
and fair, even when they are not compelled to do so by a legal
framework”



Corporate Social responsibility (CSR)

 Corporate social responsibility (CSR): a sense that businesses have
wider responsibilities than simply to their shareholders, including the
communities they live and work in and to the environment.
 In larger companies nobody is liable for everything the business does
 Managers have some responsibility to shareholders to make money