Reading and evaluating both sources “Corporate Ethics and Corporate Governance” and “Stakeholder theory”, I tend to side with the theory of maximizing profits TO A CERTAIN EXTENT. What do I mean by “a certain extent”? For a business to cause a negative externality is where the line should be drawn. In other words, a side effect to those who are not even remotely related to the industry. For example, having a firm dump their waste in river water causing infected water and food which in turn harms those who live nearby that water is causing a negative externality.
On the other hand, we have the drug industry which receives negativity due to their products such as tobacco or alcohol. Yes these products cause negative externalities, but the product is not to be mistaken with the producer. the negative externality here emerges from those who use the product and not the firm. An individual under the influence may cause harm to others around him/her but it’s not the product to blame just as car companies aren’t condemned for car crashes.
The opposing view of Dr. Freeman suggests that businesses who’s aims are not to better the world are ones in decline. They are the businesses who’s employees aren’t in consensus with the firm and don’t enjoy their work. I believe this is more of a subjective opinion rather than a well supported piece of evidence. Fast food restaurants and bars are all over the place but they seem to be ascending businesses, in which case, Freeman’s theory is merely a perspective.
“What does it mean to say that “business” has responsibilities? Only people can have responsibilities.” That sentence stood out to me the most as it’s true in a literal sense. The manager has responsibilities and so do the employees and it’s their job to carry them out at their own expense, not the firm.
Word Count: 314
Citation:
Friedman, Milton. “The Social Responsibility of Business Is to Increase Its Profits.” Corporate Ethics and Corporate Governance. N.p.: Springer, 2007. 173-78. Print.
Freeman, R. Edward. “Stakeholder Theory.” YouTube. YouTube, 13 May 2009. Web. 12 Sept. 2016.