In the news article I read, the excessive profit making of the six big UK energy companies was condemned as “cold blood”. There are several reasons for this.
Because gas is one of people’s necessities to live, it is an inelastic good. In addition, energy like gas is part of the infrastructure of the society, so fair and enough energy supply is a crucial part for the whole society as well. Thus the rising price of gas influenced not only consumers, but also the environment department who was in charge of the energy issues.
While these companies focused too much on their own benefit, they didn’t consider how to balance their other stakeholders’ interests as mentioned above. According to Freeman’s illustration of stakeholders theory, the companies failed to coordinate their all stakeholders’ interests. In order to do this, they had to take social responsibilities in terms of effective energy solutions besides their own business, which is tough in Friedman’s opinions. However, because of their important roles as energy suppliers, the companies had to do take more social responsibilities. They could collaborate and communicate with government to discuss energy conservation and energy efficiency. On the other hand, if they continued to maximize profit without taking other actions, they would be regarded as unethical.
Also, according to other small energy companies, the big six dominated the supply and demand of the market. Thus the energy market would become oligopoly. The big six determined the energy supply and the market competition, and they should take responsibilities to make good models for small business.
Although business ethics and social responsibilities are hard to conduct for business when it comes to the profit, in my opinion, big companies should take more social responsibilities in order to make the market healthier and better.
Source of picture: Matt Cardy/Getty Images.Big six energy firms accused of ‘cold-blooded profiteering’.the guardian.web.10 Sep 2014.