Class Notes (838,375)
Canada (510,867)
Commerce (703)
COMM 394 (10)
Lecture

C394 - Feb 26 - Mock Debate and Social Responsibility.docx
Premium

5 Pages
126 Views
Unlock Document

Department
Commerce
Course
COMM 394
Professor
Tony Boardman
Semester
Winter

Description
Mock Debate “This house believes that the primary responsibility of business is to maximize profits” ARGUE “FOR” • Transactions mutually beneficial to everyone evolved o Competitive market in theory o Maximize benefit • Everyone in company is benefiting o Whether shareholder or CEO • Helps economy to grow in a whole o Decrease in unemployment, eliminate discrimination, economies of scale ARGUE “AGAINST” • Focus on long term relationships with communities, trust, ethics o Choose to forgo profits, to see as long term benefit • Find balance between social welfare, responsibility, benefit for employees • Providing with goods they NEED, targeted; customer focus, not profit focused REBUT “FOR” • Transaction not necessarily beneficial – externalities (e.g. fishing company, congestions) • Especially in long run, better than short run benefits • Investing in company – care about company that they own, don’t want to invest in company that scams, even if pays good returns REBUT “AGAINST” • It is the shareholder’s money • Goal would be to maximize profits • Of course, don’t commit fraud, act with good intentions • Can’t measure relationships; the public is just a number • As shareholder, don’t want to waste resources to make friends, unless benefit in long run • More beneficial to make donations individually (tax benefits) • Can increase social welfare to increase profits (e.g. Henry Ford paying employees more to ** Rebuttal, criticize argument, respond, stimulate discussion back and forth Social Responsibility - Friedman – as long as within rules of the game, o Because executives are employees (agents) of the owners (shareholders), they have a “direct responsibility” - Corporate activity that aims to help society but reduces profits: o Undemocratic – spending other people’s money o Opportunity cost o Acting like civil servants (ie. Not politicians)  Lack expertise to identify and fix problems o Ineffective – higher prices, reduce profits - Arrow: social responsibility o Long-term interests, but within constraints, companies should seek to meet various social and environmental goals o Why?  Market failures  Undesireable income distribution  Laws and social institutions (government policies) are not “sufficient” to correct these problems Perfect Market: Invisible Hand - No business – no profits - Incenetive to produce goods/services that customers like - Consumer surplus = net social benefits – Producer Surplus With Market Failure - With externality, trade off between profits and consumer surplus - Where do society want to be? - Producers - Highest point (profit) - FRIEDMAN - Consumers – maximized CS - Social Welfare Maximum
More Less

Related notes for COMM 394

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit