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Business Ethics - Coggle Diagram
Business Ethics
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Stakeholder- An individual or group which either is harmed or benefits from the corporation or whose rights can be violated, or have to be respected by the business.
A whistle blower may draw attention to various things such as: tax avoidance, environmental issues, cheating on tests/ exams, discrimination/ bias in recruitment or promotion.
Although in theory whistle blowers have legal protection, the reality is that often there is a great deal of cost in raising concerns; this may be loss of friendships, poor treatment from managers, or the loss of their job.
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Corporate Social Responsibility- The idea that a business has responsibility towards the community and environment (all stakeholders).
Milton Friedman was an American economist whose idea of monetarism with its decrease in government rules and regulations for business has proved very influential on British and American thinking. In 'The Social Responsibility of Business is to increase its profits' he argues against CSR.
Friedman argues that suggesting business should have responsibilities is a mistake. This would lead to socialism rather than capitalism. Suggesting that a business should have ethical responsibilities in addition to the law distracts from, its core, purpose, which is to make money. Friedman argues that it is a mistake to imply that the pursuit of profit is in some way immoral.
If the business is successful in making money then there may be benefits to the community as employees have some money and are able to use it for good. There is nothing to stop individual executives or employees giving part of their wages to charity or volunteering in the community in their own time, but as representatives of the company as a whole distracts from the pursuit of profit. If money is taken from shareholders to fund social responsibility projects, this is like stealing from the company.