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Honest Work by Ciulla et al. Chapter 6

In this Powerpoint, several papers are discussed regarding the obligation of business to social equity.

BrianGlenney
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Honest Work by Ciulla et al. Chapter 6

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  1. Social Responsibility Honest Work Chapter 6

  2. ETHICS OF CEOs?

  3. Friedman: Business and Social Responsibility • Persons have a responsibility to promote good social ends: rights and wealth equality. • Business CEOs are not like people in their capacity as CEO, and thus do not have social responsibility. • Business CEOs have only business responsibility of increasing profits. • So, Business CEOs have profit increasing responsibility.

  4. Problem: KNOBE EFFECT

  5. Problem: KNOBE EFFECT The public cannot help but attribute blame to Businesses for forsaking social responsibility.

  6. Friedman’s Resolution Business CEO’s may publically demonstrate that they personally care about social responsibility and that they use their increasing income to support social welfare. (254) BUT, in principle, businesses are amoral. If they display interest in social responsibility it is for further profit.

  7. Friedman’s Resolution Problem

  8. Friedman Conclusion “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits…. (253)

  9. Stone: YES to Social Good!!!

  10. Back to Freidman’s argument • Persons have a responsibility to promote good social ends: rights and wealth equality. • Business CEOs are not like people in their capacity as CEO, and thus do not have social responsibility. • Business CEOs have only business responsibility of increasing profits. • So, Business CEOs have profit increasing responsibility.

  11. Four Arguments that Business CEOs are not like people in their capacity as CEO • Promissory Arg.: CEO’s have an responsibility to investors to maximize profit not better society. • Agency Arg.: The CEO represents the business’ main interests: shareholders, rather than customers, the state, creditors’ interests. • Role Arg.: The CEO has a paternal role making his actions morally forgivable. • Polestar Arg.: The CEO acts in the best interests of what the shareholders should have: profit.

  12. Stone’s Objection • The CEO’s concern for their shareholders interests cannot trump concerns for social good anymore than a fathers concern for their son’s success can trump social good. • SO, CEO’S DO HAVE SOCIAL RESPONSIBILTY.

  13. French: Corporations as Persons Can a Corporation be morally blamed or praised?

  14. GroupThink The Challenger disaster suggests that a large institution can be blamed for morally irresponsible behavior. Engineers claimed that the O-rings might not function in low-degree temperatures, but the launch continued because this concern, which had been around for almost a decade, had led tono problems.

  15. “Personal” Identity

  16. Corporations have the ‘tenure’ of personhood, and thus are moral persons.

  17. Freeman: Stakeholder Theory Who’s the Boss? • CEO • Stakeholder • Government • Society

  18. Freeman: Stakeholder Theory Who’s the Boss? • CEO • Stakeholder • Government • Society

  19. Freeman: Stakeholder Theory The Argument: • Stakeholders (shareholders) face the greatest risk in the corporation: fiscal loss/gain. • Whomever is at greatest is the boss. • Thus, stakeholders are the boss.

  20. Problems • Legal—employees, costumers, even the government share in the risk of a company. Thus, they are partially bosses too (legally)! • Economic—the public bears the cost of failure (debt) and benefits from success (tax) and thus is partially bosses too!

  21. Responses: narrow vs. wide stakeholders • Employees, customers, the government, and the public are stakeholders only in the “wide” sense as they are NOT VITAL to the success of the corporation. • Stakeholders is narrowly so, being VITAL to the success of the corporation (Problem: isn’t the manager ALSO vital…and the employess….and customers??? What gives?)

  22. Lots of stakeholders!

  23. MODERN Stakeholder theory “When the firm mismanages its relationship with the local community, it is in the same position as the citizen who commits a crime.” (267) “The management must keep the relationships among stakeholders in balance…when wages are too high and product quality is too low, customers leave, suppliers suffer, and owners sell their stocks and bonds…” (268)

  24. MODERN Stakeholder theory: The Wise Manager

  25. Arrow: Social Responsibility and Economic Efficiency Thesis: When a business practices basic social responsibility it is increasing economic efficiency. E.g.1) Transparency: If a company gives access to its inner workings, it avoids fines associated with secrets: pollution disposal, tax evasions, etc. E.g. 2) Safety: If a company only sells safe products, then it avoids fines associated with dangers. E.g. VW, Toyota, cigarette companies, etc. etc. etc. etc.

  26. Arrow: Social Responsibility and Economic Efficiency

  27. Parker: Corporate Social Responsibility Who is running this country anyway? Should society be organized around an economic model (Capitalism) or a political model (Democracy)? E.g. Free press vs. Owned Press

  28. Marcoux: Bad Business Ethics? • Stakeholder Theory (R. Edward Freeman) Vs. • Shareholder Theory (Milton Freidman)

  29. Summary Social Responsibility Economic Efficiency

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