Assignment Question
Examine the role of fire in religion and spirituality. Select a fire deity or god/goddess, and the corresponding religion. Conduct research about the religion and the deity and write a brief essay about the relation between fire and the corresponding religion as exhibited by deity. How does this deity relate to the culture of the corresponding society? What does it signify about the relationship between people and fire and their specific environment? the diety I’ve chosen is Fire in Maori Spirituality through Mahuika.
Assignment Answer
Abstract
The debate over whether business managers should subscribe to the shareholder model, focusing primarily on profit maximization, or embrace the stakeholder model, which recognizes a broader set of responsibilities to various stakeholders, is at the heart of contemporary business ethics. This essay explores the complex dynamics of this debate, considering the role of profit, corporate social responsibility (CSR), and corporate social justice. By examining the arguments of leading thinkers such as Milton Friedman, along with insights from academic articles and video clips, we shed light on the evolving expectations for businesses in our interconnected world.
Introduction
Business ethics has transformed significantly in recent years. It has transcended the simple maximization of shareholder wealth to include the broader concept of corporate social responsibility (CSR) and corporate social justice. This transformation prompts a crucial debate among business managers: Should they primarily adhere to the traditional shareholder model that prioritizes profit maximization, or should they embrace the stakeholder model, which recognizes an extended set of responsibilities to various stakeholders (Wickham, 2006)?
The Shareholder Model vs. Stakeholder Model Debate
The foundation of this debate lies in the dichotomy between the shareholder model and the stakeholder model. The shareholder model, as famously advocated by economist Milton Friedman, argues that the primary objective of businesses is to maximize profits for their shareholders. It asserts that managers have a fiduciary duty to act solely in the interests of shareholders and should not engage in activities that detract from profit generation. This model has been the dominant paradigm in the business world for decades, prioritizing the financial bottom line above all other considerations (Friedman, 1970).
In contrast, the stakeholder model recognizes that businesses have a broader societal impact. Stakeholders encompass not only shareholders but also employees, customers, suppliers, communities, and a myriad of other entities. This model asserts that corporations have ethical and social responsibilities beyond mere profit generation, emphasizing that a business’s long-term success is inextricably linked to its ability to maintain positive relationships with a diverse range of stakeholders (Freeman, 1984).
Corporate Social Responsibility (CSR) and Corporate Social Justice
At the heart of the debate between the shareholder and stakeholder models lie two central concepts: corporate social responsibility (CSR) and corporate social justice. CSR is a multi-faceted approach that emphasizes a corporation’s commitment to operate ethically while contributing to economic development and improving the quality of life for employees, their families, local communities, and society at large. CSR initiatives range from sustainability practices to philanthropy and ethical business conduct (Crane & Matten, 2004).
Corporate social justice extends the CSR concept by focusing on issues of equity and justice within and beyond the corporation. It encompasses the promotion of diversity, equity, and inclusion (DEI), ensuring fair labor practices, and advocating for social causes that align with a corporation’s values. Both CSR and corporate social justice reflect the growing recognition of businesses as influential actors in shaping society.
The Role of Profitability in the Debate
Profitability remains a core component of the debate. The shareholder model contends that profit maximization is the primary objective of businesses. Profitability is crucial as it ensures a corporation’s survival, fuels growth, and generates returns for shareholders. However, this approach has faced criticism for overlooking social and environmental considerations. It has also been challenged for the negative externalities it might produce.
The stakeholder model acknowledges the importance of profitability but not at the expense of other stakeholders’ interests. It argues that long-term success is contingent on maintaining the trust and support of a broader range of stakeholders. This can be achieved through responsible and ethical business practices.
Balancing Profitability and Social Responsibility
In the contemporary business environment, a balanced approach that respects both profit-seeking and social responsibility is vital for a corporation’s long-term success. Ethical business practices, commitment to corporate social responsibility, and a focus on corporate social justice can contribute to a company’s reputation and financial success.
While Milton Friedman’s shareholder model offered a perspective that emphasized profit maximization, it’s essential to recognize that the business environment has evolved significantly. Today, businesses are expected to consider the broader societal impact of their actions. The rise of ethical consumers, increasing scrutiny from regulatory authorities, and growing awareness of social and environmental issues have shifted the landscape.
In today’s interconnected world, corporations must adapt to the changing expectations of their stakeholders. Ethical and socially responsible behavior can enhance a company’s reputation, attract customers, and foster loyalty. It can also help attract and retain top talent, as employees are increasingly drawn to companies that share their values (Benioff & Adler, 2007).
Conclusion
In conclusion, business managers should recognize that corporate success goes beyond profitability alone. A responsible, ethical, and socially just approach to business is not only beneficial for society but can also contribute to long-term financial success. This integration of profit and purpose is a fundamental aspect of modern business ethics, reflecting the ever-evolving expectations of stakeholders and society at large.
References
Crane, A., & Matten, D. (2004). Business Ethics: A European Perspective. Oxford: Oxford Press.
Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman.
Friedman, M. (1970). The Social Responsibility of Business is to Increase Its Profits. The New York Times Magazine.
Wickham, P. A. (2006). Strategic Entrepreneurship 4th Ed. Harlow, Essex: Pearson Education.
Frequently Asked Questions (FAQs)
1. What is the core difference between the shareholder and stakeholder models in business ethics?
The shareholder model, primarily advocated by Milton Friedman, asserts that a corporation’s primary objective is profit maximization for its shareholders. In contrast, the stakeholder model recognizes a broader set of responsibilities to various stakeholders, including employees, customers, suppliers, and communities, beyond just profit generation.
2. How has the concept of corporate social responsibility (CSR) evolved in contemporary business ethics?
Corporate social responsibility has evolved from a focus solely on profit to a broader commitment to ethical business practices, philanthropy, sustainability, and social and environmental considerations. It emphasizes a corporation’s role in contributing to economic development and improving the quality of life for various stakeholders.
3. What is corporate social justice, and how does it relate to business ethics?
Corporate social justice extends the CSR concept by focusing on issues of equity and justice within and beyond the corporation. It encompasses promoting diversity, equity, and inclusion (DEI), ensuring fair labor practices, and advocating for social causes that align with a corporation’s values. It reflects the growing recognition of businesses as influential actors in shaping societal justice.
4. Is profitability still important in the context of business ethics, or has it taken a backseat to social responsibility?
Profitability remains crucial in business ethics. While the debate centers on balancing profitability with social responsibility, it is widely acknowledged that profit is essential for a corporation’s survival, growth, and generating returns for shareholders. However, it should not come at the expense of other stakeholders’ interests.
5. How can businesses balance profit-seeking and social responsibility in the modern business environment?
A balanced approach involves respecting both profit-seeking and social responsibility. This can be achieved through ethical business practices, commitment to corporate social responsibility, and a focus on corporate social justice. Businesses need to adapt to changing stakeholder expectations, as responsible and ethical behavior can enhance a company’s reputation, attract customers, and foster employee loyalty.
