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Business Ethics and Social Responsibilities everything on the ethics of business and the social responsibility of firms in the community

Course Code
Jim Mc Cutcheon

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L10 BU111 12/10/2011
Social Responsibility of Business
The Traditional Viewpoint
Viewpoint Espoused by economists
primary function of any business is economic not social
Milton Freidman (Noble Prize winner)
To produce efficiently and maximize profits in a marketplace regulated by the
forces of supply and demand
high profits allow business to expand
provides jobs, income to employees, shareholders, suppliers
provides more tax revenue to government
This view suggests that the social obligation of business should involve only four
The creation of employment
the creation of income
the payment of taxes
adherence to the law
when business does all these things well, society wins
it is the government's responsibility to deal with social issues
Arguments Supporting the Traditional Viewpoint
Money spent on social responsibility lowers shareholder returns. Management has
no authority to spend shareholder's money in this way
Social responsibility is inflationary
If other firm's don't engage in socially responsible activities they will have lower
costs and be more competitive
it is the government's responsibility to make social decisions
Emergent (Socioeconomic) Viewpoint
A more contemporary and emerging view regarding the social responsibilities of
suggests that social responsibilities of business includes all of those things
advocated by the traditional (economic viewpoint)
Four Key Areas of Social Responsibilities
I. Responsibility towards the environment
air pollution (CO2 emissions, other airborne pollutants)
water pollution
land pollution (toxic waste disposal)
II. Providing Quality Products
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