Essay Sample on Friedmanite Corporate Social Responsibility

Published: 2023-08-13
Essay Sample on Friedmanite Corporate Social Responsibility
Type of paper:  Essay
Categories:  Economics Business Money
Pages: 7
Wordcount: 1778 words
15 min read

The Friedmanite corporate social responsibility conception refers to a corporation's resolution of maximizing stockholders' profits (Beauchamp 48). Two key arguments relate to the Friedmanite understanding of social responsibility. The first argument states that stockholders get entitled to their earnings resulting from a contract between the corporate shareholders. Stockholders bear the corporation's risks. When the stockholders supply capital for a corporation, they take risks. Profits are the benefits they receive after taking risks (Beauchamp 49). Apart from stockholders, other players in the corporation include managers, employees, etc. These corporation workers benefit from the corporation through wages and salaries. After paying all payments, fees, and expenses, the remaining profit goes to the corporation's risk-takers.

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In the second argument, stockholders own the corporation, meaning that all the corporation’s profits belong to shareholders. On the other hand, corporation managers have the duty of controlling the firm in line with the stockholders’ desires (Beauchamp 48). If the corporation’s management engages in acts such as lending money to other organizations, this becomes illegal use of shareholders' money.

The Employment-at-will Principle (EAW)

The principle argues that the heart of an employment contract gets defined by the employee's freedom to quit, the employer's freedom to fire, the employer's right to order the employee to do his/her duties (Beauchamp 141). Concerning the EAW, Radin, and Werhane raise the following debate. According to the dual, one argument favoring the EAW is that employers proprietary rights allow them to fire or hire anyone and at any time of their choice. The exclusive rights of the corporation and the employer help in maintaining the EAW principle. If an employee gets demoted, the employer is just removing the person's labor from the corporation; no rights get violated (Beauchamp 149).

Secondly, the EAW defends the employer and the employee’s rights equally. In this case, the EAW protects the right to freedom of contract. Since the employee contracts for hire voluntarily, he/she has the freedom to quit. However, some privileges accrue to employers that may not accrue to employees. For instance, if an employee faces hostile treatment by the employer, for example, firing for no substantial reason, it may negatively affect the likelihood or future hiring. Therefore, the arbitrary treatment of employers or employees violates the EAW's motive to protect the employees' and employers' freedoms (Beauchamp 150).

Thirdly, the EAW gets favored when an employee agrees to take a job and is committed to the company's loyalty and responsibilities, keeping in mind that he/she is an at-will employee. With this knowledge, the voluntariness of employment contracts gets safeguarded. Mostly in an employment contract, people get rewarded by merit. However, both the employee and the employer must respect the agreement (Beauchamp 150). For both parties to enjoy trust, loyalty, and respect, then the duties demanded by the employment contract but bind equally and be mutually restrictive for all.

Another argument favoring the EAW states that the extension of due process rights in the workplace compromises the productivity and efficiency of an organization (Beauchamp 149). The assumption that due process reduces the ability and increases the costs, and assuming that employees will generally neglect fundamental rights for monetary benefit does not apply, especially if there are issues of unjust firings.

Finally, Radin and Werhane argued that regulation and legislation of employment relationships undermine an over-regulated (Beauchamp 149). Common law and statutes protect the family, personal, social, and employer to employee relationships. However, constitutional protection is not guaranteed unless there is a law violation against the nation. Corporations and entrepreneurship are private; hence employees can make and create employment contracts at their will. This implies that employer-to-employee relationships are private also (Beauchamp 152). Therefore, the state cannot interfere with the bond unless there is evidence of possible abuse.

Arrington’s Analysis of the Four Central Work Concepts

According to Arrington, despite possible dangers, advertisements should not be rendered guilty of violating the autonomy of the consumer (Beauchamp 263). The four concepts outlined by Arrington in the advertisement debate include free choice, autonomous desire, control, and rational desire. He concludes the following concerning each one of the concepts.

Advertising problems lie between unacceptable and acceptable manipulation (Beauchamp, 263). He referred to Kellogg's advertising campaign as an example. Kellogg operated a battle for its product (All-Bran), linking it to cancer prevention, which led to a sales increase. This claim by Kellogg was wrong because it is not legally right to claim about health aids of a food product without the FDA, or the Food and Drug Administration approval, in which case Kellogg did not have. Again, there has not been any direct association between consuming a specific food product and cancer prevention (Beauchamp 264).

Regarding the autonomous desire concept, Arrington cites an example of an advert for a serum that would make individuals appear younger. After individuals see the advert on television, they end up purchasing the serum. The questions that arise from this event are; did the commercial come up with the idea of becoming younger, or was it originally the idea in the consumer's mind? (Beauchamp 278). According to Arrington, some desires are not initially ours but get created by advertisements.

On the issue of choice and rational desire, Arrington poses a particular criticism scenario. The scenario cites that the customer's autonomy gets violated when he/she is barred from following his rational wills. There is no freedom to develop a sensible self. The desires acquired from advertisements are mainly false and fail to reflect our lucid essence (Beauchamp 279). He concludes that the main problem in this criticism scenario is the determination of what is rational desire or rational choice. He further states that if the option or desire arises from the awareness of the facts concerning a product, then almost everyone makes irrational choices due to the unreasonable desires (Beauchamp 279).

In Arrington's perspective, the free choice concept raises a difficult issue. He poses a question, "how can we differentiate between an impulse we cannot resist and one that we can resist, by either giving in to a desire or falling for one?" (Beauchamp 280). To him, one should act for a reason. For an idea, one can choose freely by proposing considerations justifying in his mind the action at hand. However, individuals tend to act from whim, habit, or impulse, and in such situations, there is no reason in mind (Beauchamp 280).

Finally, on the concept of manipulation and control, Arrington gives an example of two people. He argues that one person can control the other only if the following statements are met: (1) the first person intends the other person to act in a particular manner. (2) The first person's intentions are useful in realizing the action. (3) The primary individual targets ensuring that all necessary conditions for the operation are satisfied (Beauchamp 280). Arrington's conclusion from these facts is that advertising critics have a dangerous effect on the consumer's autonomy since they control their lives and souls. In his perception, he thinks that advertising can control behavior, or create a compulsive behavior, or generate desires that are irrational to the consumer (Beauchamp 281).

Bowie’s “Minimalist” Account of Business Obligations Regarding the Natural Environment

According to Bowie, the Minimalist account states that businesses have a legal and moral responsibility to adhere to all environmental laws (Beauchamp 461). However, Bustos and Denis think that Bowie's account is somewhat inadequate. The dual cites an example relating to the danger posed by businesses to the environment through GHGs or Green House Gases emissions as the backbone of their analysis. They argued that there is an agreement among scientists in the world that carbon emissions significantly affect the Earth's climate in ways that are harmful to current and future generations (Beauchamp 461).

The two writers give three reasons why Bowie's account is a failure. One, they argue that Bowie's statement does not work in nondemocratic states. Two, the report does not consider the harm caused to the powerless in altering current practices. Third, the account dilates the consumers' power of influencing businesses' environmental practices. Bustos and Denis argue that companies should account for their GHGs emissions. The dual concludes its argument with recommendations to the public of restraining those businesses which do not take responsibility for their emissions (Beauchamp 461).

Discussion – Part Two

Difficulties Facing Stakeholder Position According to Boatright

The stakeholder position experiences various challenges, according to Boatright. First, he affirms that every firm's goal is to benefit its stakeholder groups. However, he states management decision-making acts as an inefficient process of safeguarding non-shareholder stakeholders' interests. He adds in his argument that stakeholder interests get well addressed through a system of corporate governance marked by stakeholder primacy (Beauchamp 51). The system is fair for stakeholders since they are affected directly by the corporation's policies, objectives, and actions.

Boatright credits the idea of 'shareholder primacy' because all stakeholder groups' welfare gets maximized through it. He adds that stakeholders get special regards because the law believes that the interest of the public was engaged (Beauchamp 51). Regardless of his opposition of the stakeholder theory, he supports it for complementing the stakeholder's view in the following ways: (1) the approach reminds managers of their task to fix things, such as failures in the market, among other issues. This ensures the smooth running of the market to benefit all. (2) stakeholder management gets looked at as a guide for the firm's ethical management. It is not viewed at as an alternative to the system of corporate governance (Beauchamp 52).

Challenges Facing the EAW Principle According to Werhane and Radin

First, the principle violates personal fundamental rights that are not forfeited during hiring (Beauchamp 147). This is regarding the freedom of privacy, free speech, property rights, and due process. The dual claims that the principle violates the rights because employers can fire an employee for no substantial reason. For example. An employee can speak something that the employer thinks is offensive. Due to this reason alone, the employee gets fired. Through the firing, the employee's right to free speech gets violated.

Another challenge affecting the EAW principle is that it faces legal restraints on at-will-employment that reduces the amount of arbitrary treatment employees face (Beauchamp 147). If the employer wants to fire an employee, many ways surround these legal restrains. Unfortunately, at-will-employees do not have the right to due process. This implies that the reason for employee dismissal may not get known. However, there exist laws against discrimination that restrict the firing or hiring (Beauchamp 147). In case one is applying, there is a statement in the line of recruitment, saying, "In hiring, there is no discrimination based on the color, race, age, marital status, sex, or national religion" (Beauchamp 148).

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