Ethics and Social Responsibility

Ethics and Social Responsibility Paper

“Ethics is defined as the consensually accepted standards of behavior for an occupation, trade, or profession” (Wheelen & Hunger, 2010). Social responsibility says that privately owned organizations have responsibilities to society that extend past turning a profit. Strategic decisions made within a company usually affect society in some way, which is why decisions made in a company must be considered from all points of view. There are two opposing schools of thought in this area, the Milton Friedman approach and the Archie Carroll approach.

Friedman’s View

Friedman’s view is that a company has no responsibility past making a profit for its shareholders and that spending company money on social interests can end up hurting the company in the long run. By investing in social causes, “the business becomes less efficient-either prices go up to pay for the increased cost or investment in new activities or research is postponed” (Wheelen & Hunger, 2010). This can be extremely detrimental to the long-term efficiency of a business. By focusing solely on making a profit, the corporation is helping society because it will stay in business and continue providing the jobs and products that society depends on.

Carroll’s View

Carroll’s view is a bit different. He has divided responsibilities into four separate categories, economical, legal, ethical, and discretionary, which are listed in order of priority. The economic responsibilities are to continue providing goods or services so that creditors may be repaid. The legal category is defined by the government and is expected to be adhered to by businesses. These two categories are the most important because they are not optional. The next category is ethical and it describes generally accepted behaviors in business. The last category is discretionary, which is voluntary actions that a company might take to improve society. Carroll’s theory is that as society evolves,...