Discussion 8

Ch.10: Does business have a moral obligation to do any of the following: sacrifice profits to avoid price increases, provide special training programs and jobs for the hard-core unemployed, expend resources to minimize environmental pollution (beyond what is required by law), avoid or dispose of lucrative investments in nations that systematically violate human rights? Defend your answer carefully.

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25 responses to this post.

  1. Posted by Carol Kines on 2011/07/26 at 1:38 AM

    I generally agree with Friedman that business should be run to maximize profit and value to the owners/shareholders. However, I believe that they do have a responsibility to society, which can help the future of their business. For example, minimizing pollution helps the country to be safe and for business to have a satisfactory working environment for years to come. Although there are laws for pollution, it is not an exact science to know the legal requirements for pollution. Business has a responsibility to help determine what their products and byproducts cause in terms of pollution, and to help set levels of allowable pollution (that may be below the current legal limits). In reality, the company is often in the best position to determine the pollution their products create, and to determine the impacts to the environment. The company should be responsible to the people in this country, as well as their shareholders when it comes to pollution. In terms of training programs for the unemployed, I believe it is generally the responsibility of the government to create and manage these programs. If it is in the best interest of a company, they may choose to support the program. It may be that good potential candidates can be found through the support of training programs. I agree with Friedman that corporations should not be charitable unless it is deemed to be in their best interest.
    I do not believe that companies should sacrifice profits in order to avoid price increases unless the marketing group and management feel that this is in the best interest of the company. In other words, if the company officials feel that it is better to have lower profits and try to maintain their customer base, it may be best to avoid price increases. However, I do not feel that the company has any obligation to avoid price increases unless it is in the best interest of the company. In the area of human rights violations, I feel that every company should operate in foreign nations (or with investments in foreign nations as if they were operating in the United States. In other words, US companies should strive to use the same legal and ethical standards regardless to the country they are operating in. Human rights violations should not be tolerated in my opinion. In this case, the company should avoid or dispose of investments in nations that violate human rights.

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  2. I think business do have a moral obligation to all of these issues. Alot of the problems with the economy today have to do with business not doing what’s morally right, but what’s in the best interest of the owner’s and the people on top. I know a business is there to make money, but they should be fair to the consumer by given a reasonable price for an item.(Example- A little set of legos, no more then a handfull is priced at $20 dollars. Its plastic and does not cost more than $1.00 to make, if that. The manufacture and store should not overprice the legos just because they know people will pay it.)Business should care about providing Special training and jobs for people. It gives people new skills and can only help stimulate our economy. Business should care about our enivironment and do what ever is possible to protect it for future generations they will live here. I do believe they also have a moral obligation to the people in our country to keep business in the U.S. This will also promote jobs here, as well as not getting involved with nations that don’t care about there citiizens rights. Tjohnson

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  3. i belive that business does have a moral obligation to the people in the world in the business should promote more jobs here profits in the interests of reducing the price of the automobile to expend assets or sacrifice profits for philanthropic, humanitarian, or public welfare . A business corporation should have as its objective the conduct of hard-core unemployed, for example, it would participate directly in some. Business Ethics Some Useful Concepts, Theories/Framework & Strategies.These rules transcend the moral standards of the traing ethics to minimize environmental pollution.

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  4. Posted by mnortey on 2011/08/07 at 6:19 PM

    Business’s have the moral obligation to do almost anything they please. making money is usually the first thought but when it comes to profit, marketing, and selling all three of these keys go hand in hand. Friedman states making as much money for shareholders leads to a good social environment. which is true, if a business needs to sacrifice a profit in order to avoid increase then so be it. special jobs and training are always of good use it is a way of give and take, that promotes good business community relationships. the more employed our society has the easier it will be for businesses to prosper and continue to do well.

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  5. Posted by Hilary Carr on 2011/08/08 at 2:36 PM

    I believe that businesses DO have the moral responsibility to these things, especially providing special training programs and jobs for the hard-core unemployed, because businesses are made up of people and it is the responsibility of society to help and take care of those who are unable to help themselves.
    I do not agree with the argument that a corporation is a person, though I guess it makes sense when written legally, but a corporation is definitely made up of people. These people should behave in moral manners and help those in need, specifically those willing to work who are unable based on lack of training or job opportunities.
    Though one may argue that all profits a corporation makes should go to stakeholders, if a corporation states upfront that it is an organization with philanthropic values, a stakeholder will choose to support it knowing that some of the profit will be given to charity/philanthropy.

    HCarr

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  6. Posted by Mike Senchak on 2011/08/08 at 3:27 PM

    Businesses do not have a moral obligation to sacrifice profit to avoid price increase. This is why they are in business. In many businesses these prices are set by percentages. If the price of making a product goes up, then the price of that product will reflect that. If the product being made is something that has such an impact that it affects a safe way of life, than the government needs to step in to regulate it. Otherwise it is fair game. Next, a business does not have a moral obligation to help provide training to the hardcore unemployed. The taxes that the business pays to the government should do that. On the other hand in regards to pollution businesses do have a moral obligation to go above and beyond law to protect the environment. These externalities must be dealt with by the business. I believe that the business that goes above and beyond to minimize the externalities will be succeful and this thoughtfullness will reflect in business long term. The last question regarding human rights is that absolutely the business should eliminate investments to protect human rights. It is not ok to have some 10 year old over seas working 12 hours a day to make your business a profit.

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  7. Posted by Michael Green on 2011/08/09 at 12:44 AM

    Company have no moral obligations to sacrifice profits to reduce costs unless the cost increase will be so much that it will affect the sales of the product. If it costs too much and nobody buys, then what good is the price increase. There will be less profits anyway.I do believe companies should morally avoid or dispose of lucrative investments in nations that systematically violate human rights though. If a company is set up in areas of human rights violations, that company is dierctly part of the problem. It is essentially saying that the money that they can make is more important than the lives being abused.

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  8. Posted by Dominic DeRose on 2011/08/09 at 1:04 AM

    No, corporations do not have official obligations to do anything beyond making a profit. I do agree with Milton Friedman that corporations should only do what they plan to, to the best of their availability. In this way we can all achieve the maximum benefit of each other’s work and each company’s work in their specialized field. Please bare in mind that while I feel Friedman has a better approach than Anshen, I still feel that his mode of thinking is too “clean cut” in theory. He isn’t accounting for the corruption of human behavior. The same way the soviets thought communism would work fine in theory but in practice a few at the top dipped into the treasury too heavily or inefficiency. For capitalism I feel that the flaw is too much political influence. Too many lobbyists are attempting to change policies that help their parent corporation that can then send more lobbyists to help their parent corp, keep rinsing and repeating until the system breaks. So I agree with Friedman, but wish there was a way to stop the eventual collapse of the system due to non-Friedman predicted forces (corruption, and illegal activity).

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  9. Posted by Walter Bell on 2011/08/09 at 6:12 PM

    I agree with Friedman that businesses have an obligation to maximize profit. Corporations exist to maximize profit for all shareholders. Although at many times businesses hurt the environment and even arguably some human rights, it is not their problem. I say this because as long as they are sticking to the law of the land they are doing business in, then it becomes the ruling governments problem to say what is the law. I feel as long as businesses aren’t doing anything illegal, they have an obligation to maximize profit so although their ways of doing it aren’t always the best for the environment, they have a mission. Without this mission to focus on profit, our businesses would be hindered and our luxuries would be hindered as well. We should focus on having the government put in stricter environmental protection laws and human rights laws instead of asking for businesses not to do what they were designed to do.

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  10. Posted by Marc Kosec on 2011/08/10 at 12:01 AM

    The moral obligation of the company to do these things can be considered to be required if profits of the company can afford it. The whole point of a corporation is to support the employees and families of the employees that work and depend on it. As long as this company acts within the law they are doing their part. If said company cannot afford to be more friendly to the environment or withhold business from a country that is practicing actions outside our own moral code, then i feel they are not obligated to do such. Their point in life is to create profit for the employees and owners. If this doesnt happen then the corporation does not exist.

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  11. Posted by Misty Bess on 2011/08/10 at 12:48 AM

    I do not believe that businesses have the moral duty to meet the needs of any of the aforementioned social issues. Although those items listed are in fact details that could benefit society, the corporations do not have an ethical responsibility to sustain them. I am in agreement with the viewpoints expressed by Freidman. The only duty a business has, is to its shareholders and business partners. If you take away the businesses rights to operate in the capacity of their choosing you are essentially taking away their right to liberty and freedom. As a member of society, I have the luxury of having a multitude of services and companies to pick goods from. If I want to be a responsible consumer, I will do my research and procure my possessions from those businesses that have ethical practices that I support. Just as I have the ability to choose where and how I spend my capital, the businesses are also entitled to the same. As discussed in previous chapters, business owners and its shareholders should not be held to a different standard than the rest of us. Each should be able to decide on an individual basis what they want to contribute to society, if anything at all. I think once society starts dictating how a business should act you come across a potential perilous situation of taking away their fundamental rights. How do you know when to draw the line over what kind of decisions others can make for the business practices? Scarily, it could get to the point where the owners and shareholders actually have little or no say in how their company functions and that is unjust. The solution is to continue to let the businesses operate in the manner of which they choose which in turn leaves their moral rights intact.

    MBess

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  12. Posted by Ashley Whitford on 2011/08/10 at 7:16 PM

    I believe that businesses do have a moral obligation to all of these issues. With the issue of providing special training programs and jobs for the hard-core unemployed, I believe that a business does have an obligation to provide that. The company is made up of people, and without special training for their jobs the company wants them to do, the company would just be throwing their money away. And that would be essentially throwing the money away that the companies are making for their shareholders or partners. On topics such as minimizing environmental pollution, I think that the companies should find themselves responsible for participating in that. A company is made up of people that live in society and if the company is not helping minimize pollution, they employees will have to live in the pollution that their company is creating. I also believe that companies should do things like sacrifice profits to avoid price increases, because if a company puts out a product that is a lower price than say a competitors, more people will buy products from that company, making them more money. On the issue of the avoiding or disposing of lucrative investments in nations that systematically violate human rights, I think companies should feel morally obligated participate in that. A company should not have the power to take away the rights of another human just to make a quick buck. All in all, I feel that businesses should have a moral obligation to do all of the things that are mentioned.

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  13. Posted by Michael Sammartino on 2011/08/10 at 8:33 PM

    NO businesses do not have a moral obligation to do any of the following! A business is a business is a business in a capital market such as the United States. The hard-core unemployed need to use government programs to go to a trade school and obtain a skill which can be essential and useful to a business. We cannot put everyone on the same level– this would be transitioning to a mix of communism/fascism where businesses will have no say in how they run themselves because there is only one way to do it. Businesses can certainly market the fact that they do not buy from nations that systematically violate human rights, however, there should be no restriction.

    -msammartino

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  14. Posted by NChaney on 2011/08/10 at 11:11 PM

    I believe Freidman is correct with his statement that businesses have an obligation to maximize their profits.Businesses do not have to conform to the idea of sacrificing profits to avoid price increases. Businesses have their own policies, If you don’t agree with them, then simply don’t support it. It is not the responsibility of the business to make sure those who are un-employed to get proper training for future job posibilities. Making businesses follow certain obligations will eventually lead to them having no power at all. However, businesses do have moral obligations they should abide by. These moral obligations are for the good of society. It is completely wrong for a business to invest in countries that violate human right. Regardless of what I think, the problem is most of the products we buy come from third world countries. Until we start producing more here in the United States that will always be the case. As for pollution, I believe business should have a moral obligation to make sure they do not harm the environment.

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  15. Posted by Kimberly Bertmeyer on 2011/08/11 at 4:28 AM

    This topic really backs up the idea that corporations should not be treated as persons. As individuals in our daily lives we are unlikely to do most of these things. It also brings up the topic of occupational morality again. Businesses have one goal and one goal only and that is profit. The only time they are going to spend extra money on moral actions like limiting pollution is when consumers start to complain and boycott their goods and services. For example, consider the BP oil spill. The company was careless and cut corners when it came to protecting the environment from the spill in the first place. However, after the spill occurred they all of a sudden start caring about the environment and cleaning up pollution because people were outraged and did not want to buy their fuel. If we are going to treat corporations as persons that they should have the same moral obligations that individual persons do. That will never happen because all they care about is their profits. I agree with Friedman that businesses don’t owe anything toward the public good. However, if we are to take this view, they should not be treated as persons. I think this is a contradiction of ideas.

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  16. Posted by Leah Richards on 2011/08/11 at 3:45 PM

    In my opinion, businesses have moral obligation to do all of the suggestions. Unfortunately, the issue that is hard for the business to pursue is sacrificing profits to avoid price increases. A business should really want and push for training to ensure that they have a reliable and well educated staff of employees. In conclusion, a morally correct business should do what it can to create an environment for concusmers that will agree with honesty and their well-being.

    -LRichards

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  17. I agree with Freidman that a business’s only obligation is to make a profit and make money for their stakeholders. I feel that it is up to the business to decide if it is in their best interest to be involved with community service, job training and environmental issues. Many businesses cannot afford these measures until they are established in the market. I do not feel like corporations are morally obligated to internally eat price increases, because price increases are usually due to other market activities. A business, however, must decide what price their customers are willing to pay, so that they are still profitable. I also feel that corporations are not morally responsible for creating jobs for the hard core unemployed. A business is making jobs for the economy in the first place, so I do not believe they should be focused on the hard-core unemployed, but employ those that are qualified.
    If there was going to be a new ‘contract for business’ like Ashen promotes, I believe there would have to be stipulations about where a business stands in the economy, such as they must make a profit of X amount per year or have tiers of responsibility per company’s profit, in order for businesses to still be profitable. There is just no way most start-up or new businesses would be able to afford efficient pollution measures or job training to hard-core unemployed, even if the company would want to.
    Because I do not believe they are morally obligated, but if a company would want to do these measures, they can decide if such efforts, like training and social responsibility, will be profitable ventures. Training can provide faster product assembly and a better quality product, which could generate more profit. Having your company be seen within the community or being environmentally friendly can also attractive new customers and increase business. They may not be morally obligated, but it may prove to be morally satisfying and profitable in the long run.

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  18. Posted by Nicole Zarzycki on 2011/08/11 at 5:49 PM

    Businesses do not have a moral obligation to do any of the things listed above. According to Friedman, businesses only have one social responsibility “to use its resources and engage in activites designed to increase its profits so long as it stays within the rules of the game” (pg. 349). Friedman argues that if businesses had a right to do these things they would soon become civil servants instead of employees of their stockholders which is what they are suppose to be.

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  19. Posted by Philip Ciprian on 2011/08/11 at 11:41 PM

    A business’s main goal is to run a successful business. That’s the way the economics of the world work. Sure, it is nice to provide conveniences and benefits to others, but if that is not what the main aspect of your job is, than it is not your problem. For example, making pay cuts to employees may benefit others not associated with the company, it does not have a great impact on the company itself, which should be the main priority.

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  20. Posted by JScacchetti on 2011/08/12 at 1:10 AM

    Businesses do not have a moral obligation to sacrifice profits to avoid price increases because they have to accommodate for the yearly increase in cost of products, and also the supply and demand forces. They also do not have an obligation to provide training programs for the hard-core unemployed because if you try hard enough you can find a job. If you are “Hard-core unemployed,” that typically means that you are lazy and you expect to be handed a job; which rarely happens. I believe in a socialist point of view where it should be the governments job to get the bottom of the bottom people some training or a push to training, not the companies.

    They do however have a moral obligation to expend resources to minimize environmental pollution because it’s everyone’s job to help preserve this planet. From recycling on a personal level to running more expensive air scrubbers at dirty coal plants, we all need to play our part.

    Lastly, they do have a moral obligation to avoid or dispose of lucrative investments in nations that systematically voilate human rights. Now I’m assuming a context of using slave type factories and investing in the actual companies that violate the human rights, then yes they do have a moral obligation. Promotion of the inhuman treatment of people is against all morals. However if it’s just a company that isn’t ‘bad’ in a country that has a notoriety, then they do not have a moral obligation. Only if the company they are dealing with violates human rights should they avoid doing business with them.

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  21. Posted by Michelle Green on 2011/08/12 at 2:08 AM

    Yes I believe corporations should provide special training for hardcore employees. Hardcore employees are resources and reliable . Anytime that training can be provided to better the employee, the better it is for the company as well. The better the worker, the better the product.

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  22. I do not believe that businesses have a moral obligation to sacrifice their profits, increase their costs to train new employees, avoid environmental pollution, or sacrifice investments in nations that violate human rights. I agree with Friedman that business should maximize the profits of their owners and or shareholders. I do not believe that a business actually owes anything towards the public good, and what they contribute should be towards their bottom line. Businesses have a right of liberty to operate and not a specific obligation to anyone in our society. Businesses have no obligation to create jobs. The more money that the corporation makes then the more money they can invest in the future of their socially responsible campaigns. Businesses do not have an obligation to do any of these ahead of their obligation to their shareholders. The business focusing on profits could actually end up being better in the future. Certain people cannot decide what is the best for society. Corporations should contribute to socially responsible businesses that help to improve their public image for the future. They should currently be investing to take care of environmental issues, but also they don’t have an obligation to keep the price the same. A slight increase in price shouldn’t affect the common consumer. They have no obligation to avoid price increases unless its in the best interest of the positioning strategy of this company. If the company can get a government grant or credit for going green this would give them more initiative to do this. As far as operating in a third world country, they should continue there operations there as it helps the profits of their shareholders and the people of that country. They should set a precedent for how to treat employees in this country, and be an advocate for worker reforms. They should treat their employees the same as they would even in the United States. They can not only benefit the people of this country but might be able to help invoke political and worker reforms. This could also improve their public image in a certain region of the world.

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  23. Posted by Molly Jones on 2011/08/12 at 3:34 PM

    I personally agree with Friedman, that businesses have a right to maximize their profit because the more money that comes into their business that more money the can spend on special training for the hard-core unemployeed. Thus this will make their business better because they will have better employees that are better knowledged in the business. I also think that minimizing pollution is a great thing to do within a business, it gives the business a eco-friendly name, and protects the environment. On the other hand I don’t agree with Friedman in the act of oweing anything to the public good. The public is what makes a business who it is, for example nike. Nike could take all the money they have and do whatever they want with it since they have the right of liberty but without the public no one would like Nike, therefore no one would buy Nike products, thus the company would have no money coming in. I believe that each business has the right to liberty and can do whatever the please with their products but I also believe that the public is how the business gets a good name.

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  24. Of all the examples listed, I feel the only one where businesses have a moral obligation is to avoid or dispose of lucrative investments in nations that systematically violate human rights. To quote Michael Green in a previous post, “If a company is set up in areas of human rights violations, that company is directly part of the problem. It is essentially saying that the money that they can make is more important than the lives being abused.” I would certainly hope that the business’s “personae fictae” and top officials would all agree with this statement plus realize the negative effect that public exposure of this practice would have upon their public image- which, in the end, would affect their bottom line. Also, to “systematically violate human rights” most inevitably involves some sort of deception- the nations force something upon their populations to promote overall good that is falsely decided by them without any respect for autonomy or respect for persons. It is in this aspect that I feel Milton Friedman’s stance, “social responsibility of business- engages in open and free competition, without deception or fraud,” applies.
    SBayus

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  25. Posted by Natalie Haynam on 2011/08/12 at 4:52 PM

    I do believe that businesses have a moral obligation to sacrifice profits to avoid price increases, provide training programs and jobs for the unemployed, minimize pollution, and dispose of lucrative investments that violate human rights. The businesses are the ones who create these problems, so leaving these issues to society or someone outside of the corporation is morally wrong. According to Melvin Anshen, external costs are those generated by business but are borne by the public, also referred to as externalities. These externalities include: unemployment, pollution, and retirement. The businesses are the ones who create these externalities by laying employees off, moving their companies overseas, and polluting the air we breathe with contaminates. If businesses continue to create these issues without having a hand in fixing them or negotiating them, I do not see how it can be justified as not being their moral obligation to take action. Every day in our society people make mistakes and do wrong, and they are expected to pay for them. However, in this case, by saying corporations owe nothing toward the public good, we are basically brushing off the consequences of their actions, and saying it is okay for them to run their businesses the way they do. Friedman argues that as long as a business doesn’t commit fraud, conducting business is an exercise of our natural right to liberty. I believe that if a business doesn’t commit fraud it should be granted the right to do business; however, by making corporations have an obligation only to its stockholders and not society isn’t fair to me. In reality, society is the consumer’s that keep these businesses running, so I do not understand how a business would have no obligation to them. The way many businesses run their business seems to provide more harm than it does good to society, whether it be pollution, unemployment, and price increases. It is not society’s responsibility to fix these above issue that businesses have created. Foe example, it is society’s responsibility as a whole to try and preserve the earth, and if businesses are being allowed to pollute the air, they are not contributing their part to the world we live in, so morally they should be obligated to minimize pollution to benefit the earth. In the end, businesses should negotiate a way in which they become an active participant in forming an agreement between them and society, rather than expecting society to resolve their issues as Anshen points out.

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