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Social Responsibility Two Prehistoric Men Term Paper

A capitalistic society that provides open and free competition did not bring about Enron and similar debacles. It was the second part of Friedman's statement: "without deception or fraud" that led to such situations. It was the greed of several individuals who misreported their profits to get a larger part of the pot. Unfortunately, there will always be individuals like this -- it is human nature. That does not make the whole system corrupt. One can say that the competition inherent in the capitalistic enterprise encourages such behavior. Hoarding by one of the cave dwellers would never work. The hope is that lessons are learned from situations such as these -- that nothing works perfectly.

Richard E. Hattwick, professor at Western Illinois University and co-founder of the American National Business Hall of Fame concludes:

competitive market situations encourage the reasonably high standard of business ethics called the ethic of justice. The financial incentives of the market exact a price from business leaders trying to be more ethical or less ethical. Saints and sinners can exist, and indeed they do. But in most cases they could improve their profit by adhering to the middle-of-the- road ethic of justice. This conclusion is based on the long run view and the assumption...

Business leaders intent on maximizing long run profit will find the justice ethic in their long run best interests if their past ethical performance is known to prospective customers, employees, investors, suppliers, competitors and local communities. A record of poor ethical performance in the past will cut off cooperation from others in the present and future. A good record will encourage cooperation and, with it, improved profit....One-time business transactions and short-lived business relationships thus represent a natural habitat for the unscrupulous businessperson.
References

Boatright, J.R. 1994. Fiduciary duties and the shareholder-management relation: or, what's so special about shareholders? Business Ethics Quarterly 4:393-407

Friedman, M. The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine. September 13, 1970. www.nobel.se/economics/laureates/1976/" http://www.nobel.se/economics/laureates/1976//

Hasnas, J. 1998 the normative theories of business ethics: a guide for the perplexed.

Business Ethics Quarterly. 8:19-42

Hetwick, R.E.. Ethics of Capitalism. Journal of Business Leadership. 2001-2002

http://www.anbhf.org/pdf/hattwick.pdf

Sources used in this document:
References

Boatright, J.R. 1994. Fiduciary duties and the shareholder-management relation: or, what's so special about shareholders? Business Ethics Quarterly 4:393-407

Friedman, M. The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine. September 13, 1970. www.nobel.se/economics/laureates/1976/" http://www.nobel.se/economics/laureates/1976//

Hasnas, J. 1998 the normative theories of business ethics: a guide for the perplexed.

Business Ethics Quarterly. 8:19-42
http://www.anbhf.org/pdf/hattwick.pdf
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