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Comment on the following statement: If a business is making money and paying the stockholders, it doesn't really matter if its practices are ethical as long as they do not violate any laws.

To assist you in your response, you might want to read Milton Friedman's "The Social Responsibility of Business Is to Increase Its Profits." 

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Joshua Stredder
Joshua StredderLv10
29 Sep 2019
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Related questions

Comment on the following statement: "If a business is making money and paying the stockholders, it doesn't really matter if its practices are ethical as long as they do not violate any laws."

Read the following two articles:

The Social Responsibility of Business Is to Increase Its Profits, Friedman

A Stakeholder Approach to Strategic Management, Freeman and McVea Friedman argued,

“Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.” In contrast, Freeman and McVea argued that the role of a corporation is to balance the needs of all stakeholders.

How do you feel about Friedman’s and Freeman and McVea’s statements? Explore both sides of the argument in your initial post by providing one argument that supports Friedman’s assertion and one argument that refutes it. Then provide one argument that supports Freeman and McVea’s assertion and one argument that refutes it. Once you have explored both sides of each argument, explain which author(s) you think is correct and why.

After you have read the article the "Top Ten Principles" from below, identify any five business ethics principles that you feel are the most important and why? How do these principles relate to either your either internship, place of employment, or at your College - please provide examples?

1. Business Ethics are built on Personal Ethics. There is no real separation between doing what is right in business, and playing fair, telling the truth and being ethical in your personal life.

2. Business Ethics are based on Fairness. Would a dis-interested observer agree that both sides are being treated fairly? Are both sides negotiating in good faith? Does each transaction take place on a "level playing field"? If so, the basic principles of ethics are being met.

3. Business Ethics require Integrity. Integrity refers to whole-ness, reliability and consistency. Ethical businesses treat people with respect, honesty and integrity. They back up their promises, and they keep their commitments.

4. Business Ethics require Truth-telling. The days when a business could sell a defective product and hide behind the "buyer beware" defense are long gone. You can sell products or services that have limitations, defects or are out-dated, but not as first-class, new merchandise. Truth in advertising is not only the law, business ethics require it.

5. Business Ethics require Dependability. If your company is new, unstable, about to be sold, or going out of business, ethics requires that you let clients and customers know this. Ethical businesses can be relied upon to be available to solve problems, answer questions and provide support.

6. Business Ethics require a Business Plan. A company's ethics are built on its image of itself and its vision of the future and its role in the community. Business ethics do not happen in a vacuum. The clearer the company's plan for growth, stability, profits and service, the stronger its commitment to ethical business practices.

7. Business Ethics apply Internally and Externally. Ethical businesses treat both customers and employees with respect and fairness. Ethics is about respect in the conference room, negotiating in good faith, keeping promises and meeting obligations to staff, employers, vendors and customers. The scope is universal.

8. Business Ethics require a Profit. Ethical businesses are well-run, well-managed, have effective internal controls, and clear expectations of growth. Ethics is about how we live in the present to prepare for the future, and a business without profits (or a plan to create them) is not meeting its ethical obligations to prepare for the future well-being of the company, its employees and customers.

9. Business Ethics are values-based. The law, and professional organizations, must produce written standards that are inflexible and universal. While they may talk about "ethics", these documents are usually prescriptive and refer to minimal standards. Ethics are about values, ideals and aspirations. Ethical businesses may not always live up to their ideals, but they are clear about their intent.

10. Business Ethics come from the Boss. Leadership sets the tone, in every area of a business. Ethics are either central to the way a company functions, or they are not. The executives and managers either lead the way, or they communicate that cutting corners, deception and dis-respect are acceptable. Line staff will always rise, or sink, to the level of performance they see modeled above them. Business ethics starts at the top.

Ethics is about the quality of our lives, the quality of our service, and ultimately, about the bottom line. An unhappy customer complains to an average of 16 people. Treating employees, customers, vendors and the public in an ethical, fair and open way is not only the right thing, in the long run, it's the only way to stay in business.

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