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Ethics and social responsibility in business
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Imagine you own a fishing company in a small lakeside town. Your company has been profitable for five years and your family lives a prosperous lifestyle. All of a sudden, everything dramatically changes. A new factory moves to the lakeside and begins to pollute PCB's into the lake, causing many of the fish to die. Years of hard work, motivation, and dedication have now gone to waste. Your business has been forced to close because of reasons out of your control. Much like the fishery, the livelihood of many businesses is threatened by negative externalities- unintended consequences brought upon a third party through regular business operations. Solving externalities is not as easy as it seems; every interest has a different opinion. Although there are many different sentiments, two general viewpoints have emerged: efficient market regulation and free market guidance. Currently, the United States economy operates as an efficient market. In an efficient market, the government regulates the economy; it attempts to solve problems before they are self-corrected by free markets. The government also provides for the general well-being of its citizens in an efficient market, administering important social services such as education and environmental protection. Supporters of market regulation believe externalities should not be left to the free market; instead, they contend these behaviors should be regulated by the government or be shouldered by the corporations that cause them. Edward Freeman, a famous economist, champions efficient markets in his essay Managing for Stakeholders. According to Freeman, companies should integrate corporate social responsibility (CSR) into all of its assets; he believes every corporate asset creates the s... ... middle of paper ... ...orbes, Steve. "Business and Markets." Business and Its Publics: Plenary. Paulson Auditorium, New York. 7 Feb. 2011. Speech. Freeman, R. Edward. "Managing For Stakeholders." 2009. Business and Its Publics: Inquiry and Discourse. Boston: Pearson Education, 2011. 25-37. Print. Friedman, Milton. "The Social Responsibility of Business Is to Increase Its Profits." 1970. Business and Its Publics: Inquiry and Discourse. Boston: Pearson Education, 2011. 39-43. Print. Loomis, Carol. "The $600 Billion Challenge." Fortune Magazine. Time Warner Company, 16 June 2010. Web. 22 Feb. 2011. . Smith, Adam. "An Inquiry into the Nature and Causes of the Wealth of Nations." 1776. Business and Its Publics: Inquiry and Discourse. Boston: Pearson Education, 2011. 23-24. Print.