Question 1

Briefly explain Milton Friedman's view of social responsibility.

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Question 2

According to Keith Davis, in addition to considering potential profitability, a business must weigh the long-range social costs of its activities as well. Only if the overall benefit to society is positive should business act.

Accepted Answer

Keith Davis argued that businesses should consider the long-range social costs of their activities and act only if the overall benefit to society is positive, which aligns with the concept of social responsibility in business.

Question 3

Does a company like Levi Strauss have an obligation to keep an plant open in the United States if it can be more profitable going to a foreign country? Share your reasoning.??If you were the owner of a company, would your perspective be any different?

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Question 4

In his essay "Social Responsibility and Economic Efficiency," Kenneth Arrow has argued that ethical behavior in the business world comes only at the expense of economic efficiency.

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Kenneth Arrow argues that ethical behavior can actually enhance economic efficiency by increasing trust and reducing transaction costs, among other factors.

Question 5

It is not logical for corporations to acknowledge that business should be conducted morally.

Accepted Answer

Many corporations today acknowledge the importance of conducting business in a morally responsible way. This can include actions such as sustainable environmental practices, ethical treatment of employees and suppliers, and giving back to the community through philanthropic initiatives. While there are certainly some corporations that prioritize profit above all else, it is not accurate or fair to say that it is inherently illogical for corporations to value ethical behavior.

Question 6

According to law professor Christopher D. Stone, the relationship between corporate management and its shareholders is identical with the relationship between you and an investment advisor.

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According to Christopher D. Stone, the relationship between corporate management and shareholders is not identical to the relationship between an individual and an investment advisor. Stone argues that corporate management has a fiduciary duty to act in the best interests of the corporation and its shareholders, while an investment advisor only has a legal duty to provide advice to its clients.

Question 7

The idea that corporations will impose their values on us supports one of the arguments for the narrow view of corporate social responsibility.

Accepted Answer

The narrow view of corporate social responsibility argues that corporations should focus on profit maximization and not impose their values on society, as doing so could lead to undue influence and power over societal norms and values.

Question 8

Describe the ethical challenges that Yahoo faces in the China market.

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Question 9

Briefly sketch the evolution of corporations.

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Question 10

According to John Kenneth Galbraith, business's social role is purely economic and corporations should not be considered moral agents.

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John Kenneth Galbraith believed that the primary role of business is to maximize profits and achieve economic efficiency, and that corporations should not be expected to have a moral or social conscience beyond these economic goals.

Question 11

What is the problem of "vanishing individual responsibility"?

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Question 12

Is Levi Strauss really hurting the people of Costa Rica by opening the operation there? List the pros and cons.

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Question 13

What is a corporation (or limited-liability company) and how does it differ from partnerships and other forms of business association? What are the different kinds of corporations?

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Question 14

Explain the relevance of the concept of a promissory relationship to the debate over corporate social responsibility.

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Question 15

According to Kenneth Arrow, trust and confidence are highly overrated in business.

Accepted Answer

Kenneth Arrow, a Nobel Prize-winning economist, actually emphasized the importance of trust and confidence in the functioning of economic systems, suggesting that they are fundamental to the efficiency and effectiveness of markets.

Question 16

What society finds to be useful and desirable is always brings profitability to companies.

Accepted Answer

What society finds useful and desirable can influence profitability, but it doesn't always guarantee it. Factors such as market saturation, competition, production costs, and effective marketing also play crucial roles in determining a company's profitability.

Question 17

Corporations should welcome the outside opinions of society as a whole, local communities, customers, suppliers, employees, managers, and stockholders.

Accepted Answer

Corporations can benefit from the diverse perspectives and feedback of various groups and stakeholders. This can help them understand and address societal concerns, improve their products and services, and build stronger relationships with their stakeholders.

Question 18

Companies should look at a code of ethics as more than just window dressing with more than just a vagueness that is so general it lacks substance.

Accepted Answer

A code of ethics should be a tangible document that outlines specific ethical principles and behaviors that employees are expected to follow, rather than just a symbolic gesture.

Quiz 5: Corporations