- Some people believe that corporations have a responsibility to promote the well-being of the societies and environments in which they operate. Others believe that the only responsibility of corporations, provided they operate within the law, is to make as much money as possible.
Write a response in which you discuss which view more closely aligns with your own position and explain your reasoning for the position you take. In developing and supporting your position, you should address both of the views presented.________________________________________
Should the only responsibility of a business executive be to maximize business profits, within the bounds of the law? In several respects this position has considerable merit; yet it ignores certain compelling arguments for imposing on businesses additional obligations to the society in which they operate.
On the one hand are two convincing arguments that profit maximization within the bounds of the law should be a business executive's sole responsibility. First, imposing on businesses additional duties to the society in which they operate can, paradoxically, harm that society. Compliance with higher ethical standards than the law requires--m such areas as environmental impact and workplace conditions-adds to business expenses and lowers immediate profits. In turn, lower profits can prevent the socially conscious business from creating more jobs, and from keeping its prices low and the quality of its products and services high. Thus if businesses go further than their legal duties in serving their communities the end result might be a net disservice to those communities.
Secondly, by affirming that profit maximization within legal bounds is the most ethical behavior possible for business, we encourage private enterprise, and more individuals enter the marketplace in the quest of profits. The inevitable result of increased competition is lower prices and better products, both of which serve the interests of consumers. Moreover, since maximizing profits enhances the wealth of a company's stakeholders, broad participation in private enterprise raises the wealth of a nation, expands its economy, and raises its overall standard of living and quality of life.
On the other hand are three compelling arguments for holding business executives to certain responsibilities in addition to profit maximization and to compliance with the letter of the law. First, a growing percentage of businesses are related to technology, and laws often lag behind advances in technology. As a result, new technology-based products and services might pose potential harm to consumers even though they conform to current laws. For example, Internet commerce is still largely unregulated because our lawmakers are slow to react to the paradigm shift from brick-and-mortar commerce to e-commerce. As a result, unethical marketing practices, privacy invasion, and violations of intellectual-property rights are going unchecked for lack of regulations that would clearly prohibit them.
Secondly, since a nation's laws do not extend beyond its borders, compliance with those laws does not prevent a business from doing harm elsewhere. Consider, for example, the trend among U.S. businesses in exploiting workers in countries where labor laws are virtually non-existent in order to avoid the costs of complying with U.S. labor laws.
Thirdly, a philosophical argument can be made that every business enters into an implied social contract with the community that permits it to do business, and that this social contract, although not legally enforceable, places a moral duty on the business to refrain from acting in ways that will harm that community.
In sum, I agree with the statement insofar as in seeking to maximize profits a business serves not only itself but also its employees, customers, and the overall economy. Yet today's rapidly changing business environment and increasing globalization call for certain affirmative obligations beyond the pursuit of profit and mere compliance with enforceable rules and regulations. Moreover, in the final analysis any business is indebted to the society in which it operates for its very existence, and thus has a moral duty, regardless of any legal obligations, to pay that debt. --------
Needless to say, few would disagree that maximizing company’s profit is one of the important duties all business executives should ultimately think about and make. Especially, as long as the survivals of company itself and many workers are concerned, managements that cannot connect the efforts of the organization and its members with adequate profits will be blamed for any reason. Moreover, it is money that enables the company to plan further businesses and other types of social services. These say that money was, has been, is, and will be one of the critical standards by which the quality of an executive is evaluated.
Nevertheless, this does not mean that money is everything for all corporate executives. In our modern business environment in which the rapid changes in technologies and market conditions are a norm, it is the ability to analyze the unpredictable changes accurately that outweighs the simple function to increase immediate profitability to most business executives. Just as a farmer cannot be evaluated only by his ability required during the harvest time, a good executive is not defined by his ability to increase the present profitability. Instead, a truly good executive should be one who has the ability to predict the changing market wisely and to plan ahead of his competitors in modern markets.