PHI 2397 Lecture Notes - Lecture 1: Invisible Hand, The Boy Who Cried Wolf, Business Game
4 Jul 2018
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1: CORPORATE SOCIAL RESPONSIBILITY?
=Friedman: Social Responsibility of Business is to Increase Its Profits
-Focus on profits (business has no responsibilities other than profits)
-Business taking on CSR leads to socialist view not capitalist, free market (self-reg)
-Managers are agents that are hired to act in best interest of shareholders (make profits)
-CSR is a political concern, business should not interfere (conform corp from making $)
-If intere with CSR, they be wasting ‘corps/shareholders’ money (impose tax)
-TAXATION WITHOUT REPRESENTATION, ng cause they have to be govt
-If want to do CSR, managers can do it on their own not with corp (as individuals)
-Political consequences, managers dont have expertise in social issues
Text: Stone, “Why Shouldn’t Corporations Be Responsible?”, pp. 254-257.
The Promissory Argument
- Promise invalid because it got lost, not direct promise (people put money long ago and
got into hands of others)Corp never got to ‘refuse’ each and every shareholder ‘terms’
when change
- Sometimes morally justified to break promises for other higher concern (cant break laws)
The Agency Argument
- Management is the one electing directors not shareholders, have more power in shaping
- Agency would show interest in acting what principle desire, but not the case (resist what
shareholders want such as ‘social measures’)
The Role Argument
- Role means you have obligations, but cant always dominate over social obligations
The “Polestar” Argument
- Managers dont have expertise for social purposes, would be public employee but arent
Text: Carr, “Is Business Bluffing Ethical?”, pp. 43-47.
Bluffing: Falsehood ceases to be falsehood when it is understood on all sides that the truth is
not expected to be spoken
Pressure to Deceive
Most executives are almost compelled, in the interest of their companies or themselves, to
practice some form of deception when negotiating with customers, dealers, labor unions, gov’t
officials, or even other departments of their companies. If executive from time to time refuse to
bluff or feel obligated to tell only the truth - he is ignoring opportunities permitted under the rules
and is at a heavy disadvantage in his business dealings. Before any executive can make
profitable use of the strategy of the bluff, he needs to make he will not lose any self-respect or
become emotionally disturbed - his bluffs are ethically justified. The justification rests on the fact
that business, practiced by individuals/corporations has the impersonal character of a game -
that demands both special strategy and understanding of its special ethics. Making bluffs/lies
acceptable within the rules of the business game, no moral culpability attaches to it.
The Poker Analogy
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
=friedman: social responsibility of business is to increase its profits. Focus on profits (business has no responsibilities other than profits) Business taking on csr leads to socialist view not capitalist, free market (self-reg) Managers are agents that are hired to act in best interest of shareholders (make profits) Csr is a political concern, business should not interfere (conform corp from making $) If intere with csr, they be wasting corps/shareholders" money (impose tax) Taxation without representation, ng cause they have to be govt. If want to do csr, managers can do it on their own not with corp (as individuals) Political consequences, managers dont have expertise in social issues. Text: stone, why shouldn"t corporations be responsible? , pp. Promise invalid because it got lost, not direct promise (people put money long ago and got into hands of others)corp never got to refuse" each and every shareholder terms" when change.
