At a board meeting for Webster Corporation, the members of the board discuss how a fellow board member is addicted to alcohol and it is affecting his work performance and his personal life. As a board, they decide to pay for a very expensive rehabilitative program at a facility several states away in California, with corporate funds. This will be a very expensive endeavor, using about 10% of the current year's profit but they hope that their friend will overcome his addiction. One board member, Nolan, objects to this stating, that if they individually want to pay for his treatment with their own money, they can, but they cannot use corporate funds for this as their only ethical duty is to make as much profit as possible so that stakeholders can decide how they want to spend their money. Nolan is employing what type of ethical decision making view of corporate social responsibility?

Question

Quizplus · Accepted Answer

Nolan is employing the maximizing profits theory of Friedman, which posits that the primary ethical duty of a corporation is to its shareholders, and that duty is to maximize profits. This view argues against using corporate funds for purposes that do not directly contribute to increasing shareholder value, such as paying for an employee's personal rehabilitation.

At a Board Meeting for Webster Corporation, the Members of the Board