Question

Milton Friedman takes the position that business corporations have no corporate responsibility of any sort except to obey the law and make as much profit as the law allows for its shareholders . Explain how his position might be ethically justified under a theory studied in this section of our course : b . Suppose a corporation had the opportunity to move its 10, 000man manufacturing jobs from Louisville to Bangladesh and thereby sharply reduce its overhead by paying substantially lower wages Explain what you think his position would be :

READING - The Social Responsibility of Business is to Increase its Profits by Milton Friedman

Answer 1

One of the most important responsibility of the businesses is to increase profits and satisfy all the stakeholders and shareholders. This would mean they are not legally responsible for the society just as the corporate social responsibility. Even this corporate responsibility is only a voluntary act and cannot be enforced by law. Utilitarian ethics suggests that an act would be considered ethical if it maximizes benefits to maximum number of people and reduce any harm. This would mean that the responsibility of the corporates is to maximize the benefits for the stakeholders and shareholders while also providing quality products and services that would increase the happiness of the consumers. Duty ethics suggests that an act would be considered ethical if it fulfils duty without worrying about the consequences. It would mean that the duty of the corporates is to increase profit and they need not worry about anything else. However, moving the unit to Bangalore would impact all the 10000 employees at Louisville which would mean their actions are harmful to their own employees thus would be unethical from the Utilitarian point of view but it would be accepted under the Duty ethics because it need not worry about the consequences.

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