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University of Toronto Scarborough
Emily Fountas

SOCB58 SEPT 18/2012 FRIEDMAN :THE SOCIAL RESPONSIBILITY OF BUSINESS TO INCREASE ITS PROFITS 1. First Claim by Friedman: Social ends are indistinguishable from socialism. Problem of equivocation: you cannot equate social ends with socialism the political has to do with power and how its balanced within society; power imbalances. Social ends; refers to taking care of the ppl who have less power. who holds more power, in this case corporations. Because they have so much power they are able to affect government; through lobbying. While socialism refers to the privatization of resources. problem of unsupported claim of influence which holds that corporation don't influence government when in fact through lobbying they are able to influence the gov' to abide by certain legislations that allow them to make profit while harming humans, animals and the environment. Example: Canada is at the forefront of GM foods. ex. Peanuts were modified with monkey protein in order to have it have longer shelf life. Government refused to stop this even though the increased number of peanut allergies cannot be denied. 2. Second Claim by Friedman: only ppl have responsibilities (ethical in this case) problem of corporations having legal status of person; they have all kinds of rights ex. Right to buy other corporations, right to buy/own assets, to sue and be sued. Fact is that the corporations do have the legal rights of a person therefor they SHOULD have the responsibilities of a person. 3. Third Claim by Friedman : corporate executives not free to act except in terms of serving aims of owners/and shareholders. The owners give the orders down to the CEO; they have responsibility to their shareholders and owner. Here there is a problem of passing the buck/problem/responsibility to someone else just like that of the Nazi's who said i was just following orders 4. Fourth Claim by Friedman: has a social responsibility to fulfil the orders of the owner. A. There is a problem of shareholders vs stakeholder Shareholder: is anyone who owns a piece of the corporation. They are interested in seeing their investment/profits grow. Most shares are not owned by the average citizen, 60% of the shares maybe owned by huge entities. Who ever has the biggest shares gets the most say. The Executives tend to own the most shares. Stakeholder: anyone other than the share-owner affected by the decisions of the business. ex. The ppl living near a river that is being polluted, are the stakeholders. The environment could be a stakeholder. 5. Fifth Claim by Friedman : if the executives act otherwise from the owners policy, they would be involved in government functions in terms of taxes and their expenditures. If you have a GM wheat field next to an organic field cannot work because it gets contaminated. If the Executives gives money to the ppl than they are acting like a government. The corporation has no business deciding to compensate ppl who they have caused damage to, or take money (like tax) from ppl and use it for the good of ppl. Dr. Agnell; editor of medical journal. Many of the clinical trials are skewed to help the market of the economy. Taxation without representation: we tax payers have little to say about where our tax money is invested. They tax you without representing your needs/wants/interests. 6. Sixth Claim by Friedman: we need to make sure that the corporation does not get involved in the political process, making political decision, political policy. Social responsibility view makes government, not business, responsible for allocation of resources. If the gov is the only one to protect the ppl. However the corporation is affecting the decision of the government through lobbying. The advertising industry, television programming has been set up for children from any age which are full of adds which are attacking the early human mind, these children exposed from such a young age have been shown to have trouble focusing on later years. Finding it painful to live in the real world. These companies want to create life long consumers. William Davis: noticed that pts are all accumulating weight. Due to GMO in wheat, hibertised wheat. Body cannot handle these carbohydrates. Carbs that your body cannot handle cause disease. Christopher STONE: WHY SHOULDN'T CORPORATIONS BE SOCIALLY RESPONSIBIL? The Promissory Argument: few if any american/canadians buy shares. Only like 30% of the population. Because they do not have enough after tax income. Sometimes promises need to be broken for a higher moral aim. Even if a promise were made the shareholders should know the promise can be broken for a higher cause. Maximization: although the corporation does have the responsibility to make profit for tis shareholders. There is a difference between making and maximizing profit. TheAgency Argument: the directors have this notion that the stakeholders are less important and are distracted by the needs of the shareholders who's needs matter much more. Dow chemical company : responsible napalm for deforestation in Vietnam. Dow did not let its shareholders even vote whether they wanted napalm produced. This goes to show that corporations are not even concerned about share-holders (forget stakeholders) they will do as they please. The RoleArgument: stone uses the roles expectation comparing fathers and children. This analogy demonstrates that a corporation has this moral role to its shareholders. The Polestar Argument: this is extremely paternalistic; stating that my expertise means that i know better for you. Ex. Medicine doctors know best. Trickle down effect: the idea that if you allow ppl to make money in a free market and not legislate them, than the wealth made on top will trickle down to everyone. Stone is saying, that paternalism ... Stakeholder Theory of Modernism Corporation by Freeman: Freemans arguing that we should codify into law the system that we already seem to have: instead of arguing that there should not be governmental regulations of business practices , we should come up with an ethical approach to business practices that accommodates and justifies the governmental regulations that we already have. SOCB58 SEPT 25/2012 Bornstein argues managers must implement the following four practices to stimulate organizational entrepreneurship: 1. Institutionalize Listening: The best, most constructive input for both social and traditional entrepreneurs is from the people they serve and their employees. Childline in India, for example, has been subject to repeated changes because of new advice and recommendations. Consequently, there must be an organizationally-defined way for a business to listen. 2. Pay Attention to the Exceptional: Unexpected successes need to be investigated by the entrepreneurial firm to uncover insights that lead to organizational innovation. Part of this practice, as the success of the Grameen Bank shows, is challenging norms and expectations. 3. Design Real Solutions for Real People: Will people use my service or product? How often will they use it and at what cost? Whose consent will I need to develop this organization? What legal or political obstacles must I address? How can I encourage employee and customer feedback to stimulate new ideas or improvements? These are the questions stirring in the organizational mind of an innovative business.ex. Gapa-Bahia a foundation founded for educating and protecting and helping communities be aware and deal withAIDS/HIV in Brazil 4. Focus on the Human Qualities: Oftentimes, the most innovative, creative intrapreneurs are not those with the highestACT scores or the most degrees next to their names. Organizations must concentrate on the undefinable that is, ethics, flexibility, empathy, etc. There are no numerical measures for these qualities. the corporation 2008 the pathology of commerce Volume 1 1. Into 2. Bad apples 3. corporations part of the jigsaw 4. what is a corporation? Common purpose to succeed for a common end. Transforms lives of ppl. Corporation is a collection of ppl all pulling in the same direction. Corporation exists as a paradox although creating a great deal of wealth, it also causes damages that are sometimes unforeseen 5. Birth of a corporation 6. a legal person: corporation got the rights of a person at the same time as black slaves got the legal right to be a person. This entity has the right to sue and be sued. Special kind of person to only be concerned about their stock holders. 7. Profit is the bottom line. They calculate the cost-benefits by seeing how much the fine would be and how much the profit it could potentially could make. By doing this they would choose to break the
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