The paper "Friedman’ s Narrow View of Business Ethics vs. Stakeholder’ s Theory" is a good example of business coursework. Business ethics are professional ethics that look at ethical standards and moral problems that come up in a business setting. It takes place in all facets of business behavior and is applicable to the behavior of people and whole organizations. For several years individuals conducting have been identified with a ruthless reputation of which they justify as a way of succeeding. 'Greed' or materialism is frequently mentioned as the sole driver of life of a business, therefore much of business ethics history is, as a result, is not very pleasing to the course (Bartkowiak, 2006, p.
136). Business ethics is not any longer concerned primarily with the criticism regarding the business and its practices. Profits are not any more denounced together with materialism in moralizing talks and businesses are no longer envisaged as faceless, utilitarian and amoral monoliths. The fresh concern is only how to profit ought to be thought considered in the bigger perspective of output and social responsibility. One of the people who famous economist who believes the sole purpose of business is to make a profit is Milton Friedman.
He thinks that the managers have the right to increase the profit at the confines of the law (Friedman, 1970). On the other hand Edward Freeman in his theory “ Stakeholder theory” believe that the organizational leadership and business ethics have other responsibilities of upholding morals and values in business. Some people believe in Friedman's ideas while others believe in stakeholder theory. Is it possible that both can be right and wrong? Friedman’ s narrow view of business ethics The main concept of recent business ethics is the notion of social responsibility.
This is also an idea that has infuriated numerous traditional free-market fanatics and led to a number of dreadful or misleading claims. Possibly the most recognized of these is the argument by economist Milton Friedman in The piece titled 'The social responsibility of business is to increase its profits'. In this article (1970) he says that "There is only one social responsibility of business, which is to employ its resources and take part in activities created to enhance its profits provided that it remains within the rules of the game, that is, to engage in clear and free competition with no fraud or deception".
Friedman was trying to demystify the idea, beginning to gain grip at the moment, that organizations and their managers encompass a responsibility to take action increasing social welfare, irrespective of the law on the matter at hand whether that matter is discrimination and pollution. In this article, Friedman referred businessmen who supported the concept of corporate social responsibility as 'unwitting puppets of the rational forces that have been destabilizing the foundation of a free society' and blamed them of 'preaching pure and unadulterated socialism' (Friedman, 1970).
His claim is, basically, that managers of the organization are the workers of the shareholders and, per se, have a 'fiduciary duty to increase the profits. He argues that offering money to social causes or charity (apart from as public relations intended to increase business) and being engaged in community projects that do not maximize the corporation's profit is similar to robbing from the shareholders.
In addition, there are no grounds to presume that a business or its executives hold any special knowledge or skill in the sphere of public guiding principle, and therefore they are going too far of their capability over and above violating their responsibilities when they engage in community events at managers and not individual agents (Cummings & Doh, 2000, p. 94). Some of the misleading notion employed in such reasoning is resulting from the narrow 'profit-minded' opinion of business and the particularly critical and out of reach of the one-dimensional portrayal of the shareholder.
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