Business Ethics and Company Social Responsibility

Business Ethics and Company Social Responsibility

BUSINESS ETHICS AND COMPANY SOCIAL RESPONSIBILITY 4

In the article, “The Social Responsibility of Business is toIncrease its Profits”, Friedman’s argument is that business hasjust one responsibility. To employ their resources in engaging inactions aimed at increasing profits (Friedman, 1970). He furtherargues that the corporate executive is directly responsible to theemployers by running business in manners that meet the employer’sdesire (Friedman, 1970). This refers to making as much profit asprobable. Thus, corporations act as private property speciesoperating in a capitalist economy. In such an economy, anorganization’s social responsibility derives from involvement inliberal and open competition. The corporation makes profit andensures it acts by the stipulated rules, which include not engagingin fraud or deception.

Friedman’s argument holds credibility by presenting the idea thatprovided business focuses on doing business others are positivelyaffected. However, he eliminates the human, who is an importantfactor when evaluating the ethicality and social responsibility ofbusiness. According to Ferrell, Fraedrich &amp Ferrell (2015), asocially responsible business is one that ensures it maximizes itspositive effect on stakeholders while minimizing the negative effect.Social responsibility comprises of four levels. These arephilanthropic level – that entails engaging in social activities thatimprove society ethical level – adhering to rules of acceptableconduct as stipulated by stakeholders legal level – following allrules and administrative restrictions and economic level –capitalizing on stakeholder wealth.

The social responsibility argument by Ferrell, Fraedrich &ampFerrell (2015) demonstrates that profit is not the sole role ofbusiness. Businesses must also contemplate their impact on societythat is humans, if they are to remain profitable in the end.Considering the law’s enhanced emphasis on human rights asconnected to business, concentrating on profit maximization alone isa short-term benefit for a company. A corporation must demonstrateconcern for not just business owners, but all stakeholders. Theseinclude personnel, clients, investors, society, government, and mediaamong others.

In “The Tragedy of Commons” Hardin (1968) supposes that in asociety, that lacks either private or public forms of propertyownership, commoners resort to overusing available resources. Byexploiting resources, the commoners gratify individual interests andoverlook prospect benefits of the property. He uses the illustrationof a common pastureland. A rational herdsman will endeavor toincrease their gains from the pastureland by increasing theirlivestock. Supposing that every herdsman using the pasturelandpursues similar personal interest, then the outcome is that therewill be insufficient pastureland to benefit all herdsmen. In the end,they will stop benefiting from the common place due to lack of ampleresources.

Hardin presents a convincing argument on the need for conductingbusiness ethically and in socially responsible manners. By usingFerrell, Fraedrich &amp Ferrell’s (2015), concept of businessethics and social responsibility, it is apparent that business ethicsis significant in monitoring and responding to values, wants andexpectations of stakeholders. In addition, the authors emphasize onthe need for corporate governance. This is the formal structure ofaccountability as well as regulation of ethical and sociallyresponsible conduct. Likewise, Harding (1970) provides a solution toensuring that people do not exploit common resources, which resultsin personal benefit at the expense of other members of society. Hesuggests that all common property should be made private or regulatedby government. Such a move will ensure protection of the generalsociety’s interests resulting in socially responsible business.

References

Ferrell, O. C., Fraedrich, J &amp Ferrell, L. (2015). Businessethics: Ethical decision making and cases. Stamford: CengageLearning.

Friedman, M. (1970). The social responsibility of business is toincrease its profits. The New York Times Magazine.

Hardin, G. (1968). The tragedy of the commons. Science, 162,1243-1248.