COMM101 Lecture Notes - Lecture 3: Invisible Hand, Elon Musk, Profit Maximization
III. Capitalism
1. Corporate social responsibility:
- Is where corporations go beyond their financial and economic obligations to include the social and environmental
impact of their business.
2. Corporate moral responsibility:
- Is where corporations is the kind of entity that can make moral decisions and bear moral responsibility for its
actions.
3. Two views of social responsibility
a. The classical view (Milton Friedman)
- Also called The narrow view (Profit maximization)
- The view that the management's only social responsibility is to maximize profits (Milton Friedman).
- The function of the business is to make money, the owners employs executives to accomplish that goal.
- Friedman acknowledges that often corporate activities are described as an exercise of social responsibility
when they are intended simply to advance the company's self-interest.
- Argument for narrow view of corporate responsibility:
+ The invisible hand
+ Let the government do it
+ Business can't handle it
+ Corporation lacks the expertise
+ Corporation will impose the value on us
b. The broad view (Social changes first, second is the profit)/ Grameen Bank: Ideal social purpose business
- Also called The social-economic view
- Corporate social responsibility (above)
- The view that management's social responsibility goes well beyond the making of profits to include
protecting and improving society's welfare.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Is where corporations go beyond their financial and economic obligations to include the social and environmental impact of their business. Is where corporations is the kind of entity that can make moral decisions and bear moral responsibility for its actions. Two views of social responsibility: the classical view (milton friedman) Also called the narrow view (profit maximization) The view that the management"s only social responsibility is to maximize profits (milton friedman). The function of the business is to make money, the owners employs executives to accomplish that goal. Friedman acknowledges that often corporate activities are described as an exercise of social responsibility when they are intended simply to advance the company"s self-interest. Argument for narrow view of corporate responsibility: + corporation will impose the value on us: the broad view (social changes first, second is the profit)/ grameen bank: ideal social purpose business.
