Philosophy 2074F/G Chapter Notes -Incomes Policy, Stakeholder Theory, Supplier Relationship Management
1 May 2013
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Stockholders are the owners of the corporation and hence corporate profits belong to stockholders. Managers have no right to donate corporate profits to charity. Stockholders are entitled to their profits as a result of a contract among the corporate stakeholders. Funds remaining after these payments have been made represent profit, and by agreement the profit belongs to the stockholders. The existence of capitalist markets limits the number of politically based decisions and thereby increases freedom. There is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profit so long as it stays within the rules of the game. If wages can be cut to generate profit, they should be cut. In 1953 the legal system acknowledged the connection between corporate philanthropy and goodwill. An act that supports the public welfare can also be in the best interest of the corporation itself.
