SMG SM 131 Lecture Notes - Lecture 2: Corporate Social Responsibility, Robert Reich, Fiduciary

• School: Boston University
• Department: School of Management
• Course: SMG SM 131
• Professor: Rebecca Nichols

Document Summary

As long as you follow the rules, only goal is to make a profit. Real virtue of business is that it forces people to be responsible for their own actions. Government"s job to deal with social issues. Stakeholders- persons that have claim, ownership, rights, interests in a corporation and its past, present, and future activities. Businesses owe a duty variety of stakeholders, 2 groups: narrow- necessary for business survival. Owners, employees, suppliers, customers: wide- those affected by decisions of business. Freeman"s problems with friedman, managerial capitalism alone is not enough: legal reality, product liability, constituency laws, moral hazards. Shareholders don"t deserve as much credit as freeman gives them, corporations held hostage by shareholders. To fix: equalize economic rights of employees and shareholder members, hold corporations responsible to public and shareholders, corporations should be run democratically. Those who go into business rarely go into to maximize profits. Profits follow when managers optimize health and well being of all stakeholders.