Social Responsibility of Corporations
Social Responsibility
1. If you were the manager of “Bally’s Grand Casino”, would you treat Elaine Cohen any differently? What would Friedman (“Increase Profits”) and Allen (“Schizophrenic Conception”) advise the manager to do? Use ethical methods and legal concepts to support your position.
Elaine Cohen, a 73 year old widow, is a consistent gambler who spends her retirement savings on casino gambling. The Bally Grand casino, where Elaine spends her money, is treated very well. The casino “comps” her meals and hotel rooms, as is the procedure for any gambling player that spends a lot of money at the casino. Elaine has built personal relationships with the personnel, and the personnel are trained to be very friendly to customers to allure them to keep coming back to the casino, which is not placed at a prime location on the boardwalk. The ethical question that stands is, should the hotel be treating Elaine so well, and enticing her to keep coming back to the casino, whilst knowing that she is blowing her retirement savings on gambling. The casino knows that at the rate of money she is losing, will not have enough money to pay for her living expenses within a certain amount of years.
According to Friedman’s “The Social Responsibility of Business Is to Increase Its Profits”, the first distinction to make is that the decision on how to treat Elaine, and anyone similar to her situation, lies with the corporate executives of the company, not just any employee. The executives have the fiduciary duty to the shareholders; his/her employers. Under that duty, the executive’s responsibility does not cover how to tax the company for charitable or social good purposes, but rather to maximize the long term profits of the company. The shareholders (owners) of the company can each decide in their own regard their own personal concepts of what their social responsibilities are, and choose to spend their time and income in whatever way they see fit. According to Friedman, it is
1. If you were the manager of “Bally’s Grand Casino”, would you treat Elaine Cohen any differently? What would Friedman (“Increase Profits”) and Allen (“Schizophrenic Conception”) advise the manager to do? Use ethical methods and legal concepts to support your position.
Elaine Cohen, a 73 year old widow, is a consistent gambler who spends her retirement savings on casino gambling. The Bally Grand casino, where Elaine spends her money, is treated very well. The casino “comps” her meals and hotel rooms, as is the procedure for any gambling player that spends a lot of money at the casino. Elaine has built personal relationships with the personnel, and the personnel are trained to be very friendly to customers to allure them to keep coming back to the casino, which is not placed at a prime location on the boardwalk. The ethical question that stands is, should the hotel be treating Elaine so well, and enticing her to keep coming back to the casino, whilst knowing that she is blowing her retirement savings on gambling. The casino knows that at the rate of money she is losing, will not have enough money to pay for her living expenses within a certain amount of years.
According to Friedman’s “The Social Responsibility of Business Is to Increase Its Profits”, the first distinction to make is that the decision on how to treat Elaine, and anyone similar to her situation, lies with the corporate executives of the company, not just any employee. The executives have the fiduciary duty to the shareholders; his/her employers. Under that duty, the executive’s responsibility does not cover how to tax the company for charitable or social good purposes, but rather to maximize the long term profits of the company. The shareholders (owners) of the company can each decide in their own regard their own personal concepts of what their social responsibilities are, and choose to spend their time and income in whatever way they see fit. According to Friedman, it is