sir necor midterm 2

topic 2

he argued against the concept of social responsibility as a function of the business. According to him, a businessperson who acts “responsibly” by cutting the price of the firm’s product to aid the poor, or by making expenditures to reduce pollution, or by hiring the hard-core unemployed, is spending the shareholder’s money for general social interest.

Milton Friedman 

Milton Friedman argued against the concept of social responsibility as a function of the business. According to Friedman, a businessperson who acts “responsibly” by cutting the price of the firm’s product to aid the poor, or by making expenditures to reduce pollution, or by hiring the hard-core unemployed, is spending the shareholder’s money for general social interest.

Friedman’s traditional view of business responsibility.

 

According to ____, a businessperson who acts “responsibly” by cutting the price of the firm’s product to aid the poor, or by making expenditures to reduce pollution, or by hiring the hard-core unemployed, is spending the shareholder’s money for general social interest.

Friedman

According to Friedman, a businessperson who acts “____” by cutting the price of the firm’s product to aid the poor, or by making expenditures to reduce pollution, or by hiring the hard-core unemployed, is spending the shareholder’s money for general social interest.

responsibly

Friedman thus referred to the social responsibility of business as a “___”

fundamentally subversive doctrine

A business organization has the responsibility to produce goods and services of value to society so that the firm may repay its creditors and increase the wealth of its shareholders.

Economic.

•

A business organization has ____ responsibilities that are defined by governments in laws that management is expected to obey.

•

Legal.

A business organization has the responsibility to follow the generally held beliefs about behavior in a society.

•

Ethical.

A business organization has responsibilities that are purely voluntary on the part of the corporation.

Discretionary.

he view of social responsibility. he suggests that companies should ensure that their social responsibilities also become business opportunities.

Peter Drucker

Drucker analyzed social issues and found increasing disenchantment(disappointment) with the government’s ability to successfully initiate or successfully implement social programs. This suggests that companies may tailor their program to help eradicate existing social problems while maintaining their business stability and profitability.

Government cannot solve many social problems.

. According to Drucker, the organization’s first responsibility must always be to its own mission regardless of other factors.

The corporate mission comes first

. The corporate mission comes first. According to Drucker, the organization’s first responsibility must always be to its own mission regardless of other factors. The first "___" of the business is to make a profit sufficient to cover operational costs in the future.

social responsibility

Once the organization failed in its primary mission, its initiative for social responsibility would go out of existence. So, if this basic "___" of fulfilling the organization’s purpose is not met, no other "___" can be met either.

social responsibility, social responsibility

it means that the organization taking action assumes the responsibility for the future outcome of their initiatives. Most advocates and consumers view high prices as a social responsibility which must be addressed and reduced.

The unlimited liability clause.

it is a person with an interest or concern on a particular business undertaking.

stakeholder 

These are those who have a direct connection with the corporation and who have sufficient bargaining power to affect corporate activities directly. These include customers, employees, suppliers, shareholders, and creditors.

primary stakeholders

2.

these are those who have only an indirect stake in the corporation but who are also affected by corporate activities. These usually include nongovernmental organizations, activists, local communities, trade associations, competitors, and the government.

secondary stakeholders

The primary decision criteria used by management is generally economic, which is why secondary stakeholders may be ignored or discounted as unimportant. For a firm to fulfill its ethical or discretionary responsibilities, it must seriously consider the needs and wants of its secondary stakeholders in any strategic decision.

Analyze stakeholder influence over strategic decisions.

it  is defined as the consensually accepted standards of behavior for an occupation, a trade, or a profession.

Ethics

 

it constitutes one’s rules of personal behavior based on religious or philosophical grounds.

Morality 

 

it refers to formal codes that permit or forbid certain behaviors and may or may not enforce ethics or morality

Law 

This approach proposes that actions and plans should be judged by their consequences. Therefore, people should behave in a way that will produce the greatest benefit to society and produce the least harm or the lowest cost.

Utilitarian approach.

This approach proposes that human beings have certain fundamental rights that should be respected in all decisions. A particular decision or behavior should be avoided if it interferes with the rights of others.

Individual rights approach.

A problem with this individual rights approach is in defining “___” Some constitution includes a “___” or list of important rights to a country’s citizens, that may or may not be accepted throughout the world.

fundamental rights., bill of rights

The individual rights approach can also encourage selfish behavior when a person defines a personal need or want as a “___.”

right

This approach proposes that decisionmakers can be equitable, fair, and impartial in the distribution of costs and benefits to individuals and groups. It follows the principles of distributive justice wherein people who are similar on relevant dimensions such as job seniority should be treated in the same way.

Justice approach.

 

it involves the identification and evaluation of corporate stakeholders.

Stakeholder analysis

ability to affect the company

power

legal or moral claim on company resources

legitimacy

demand for immediate attention

urgency