BUS 2000 Lecture Notes - Lecture 2: Corporate Social Responsibility, Fiduciary, Profit Maximization

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21 Dec 2018
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Milton friedman argued: not only does business not have a duty to have an eye towards social responsibility. Business has a positive duty not to have an eye in that direction. Managers and directors owe a fiduciary duty to shareholders, not to society. Ethics and business naturally stand in opposition to each other: only humans have a moral responsibility for their actions, social problems are regulated by the state because they represent the people. Corporations social irresponsibility is very risky now. Enlightened self interest: the corporation takes on social responsibilities as much as doing so promotes it"s self interest. Business reasons: enhance revenues: satisfied customers, committed employees, reduce costs, manage risk and uncertainty, maintain social license to operate (consent of local communities, employees and governments) It is profit maximization under the cloak of csr. Moral reasons: the power argument - corporations should use their power responsibly, externalities argument - all corporate activities have some social impacts;

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