Blog #1- Business Ethics

Let’s talk business ethics for a moment. This topic comes across as extremely controversial to most, seeing as “ethics” itself is more or less subjective. This controversy can be seen it the two pre readings, Edward Freeman’s “Stake Holder Theory” and Milton Friedman piece titled “The Social Responsibility of Business is to Increase It’s Profits”

I have recently read an article from CBC news outlining how the increase in Ontario’s minimum wage could potentially cause the loss of up to 50,000 jobs, mostly from teenage and young adult workers. The motive behind this wage hike was to attempt to minimize poverty, as a reaction to the inflating prices and cost of living. This reminded me of a theory that I read in Friedman’s piece where he states that a business man “is pre-sumably an expert in running his company – in producing a product or selling it or financing it. But nothing about his selection makes him an expert on inflation. Will his holding down the price of his product reduce inflationary pressure? Or, by leaving more spending power in the hands of his customers, simply divert it else- where?” I found this paragraph deeply thought provoking. When I had seen the original article about the Ontario wage raise I immediately blamed it on the increasing inflation due to companied being greedy for more profit, and unethically raising prices past the point that was previously considered affordable by the mass majority of consumers. Friedman is trying to remove ethics from business, but I disagree. If inflation is not an issue of business ethics then where is it coming from?

I found the two pre readings on business ethics both fascinating sides to look at. One one hand Friedman is correct in the sense that when it comes to a business, the main goal of any organization is to make a profit. We are all human and we all have a need to eat, drink water, find shelter and so on; all of these things cost money. A business is a business, if there was a desire to change the world, the CEO would have started a charity instead. However, this is not to say that businesses should never make sacrifices to their maximum profit for an ethical reason. As Edward Freeman states, we must support all of the stakeholders that helped to build our company to what it is today. Without customers, employees, and financiers there would be no business and no money to spend. We DO have a social responsibility to give back to the society in which our business is thriving.

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