Is Friedman right to refer to shareholders as owners and employers? Isn’t it odd to refer to corporate expenditures as “taxing and spending?”
What do you think of Friedman's "democracy argument" against corporate social responsibility?
Instrumental managing for stakeholders means treating them, as the word implies, as “instruments” or “tools” to accomplish the genuine task of corporations: shareholder profits. As tools, managers need to take care of them for them to work well, as a carpenter knows that she must take good care of her hammer, saw, etc. in order for them to work well. The reason why, however, is not because care for the tools themselves has intrinsic value. Instead, the tools are a mere means to an end. Freeman frequently invokes instrumental reasons for managing for stakeholders. He also, at times, clearly supports the normative managing for stakeholders approach. For example, the idea that in managing for stakeholders managers should avoid tradeoffs is clearly not simply about shareholder profits. Friedman, Freeman, and Boatright all defend their particular view on the moral responsibility of managers by reference to what they believe is central to the functioning of capitalist economies. Do they fundamentally disagree about the nature of capitalism?
Most interestingly (and controversially) Boatright argues that managing for shareholders is the best way to serve the interests of stakeholders, including employees. How can managing for shareholders best serve other (non-shareholding) stakeholders? After all, one course of action that managing for shareholders suggests (as understood by Friedman), that managing for stakeholders (as understood by Freeman) generally speaks against, is trading the interests of employees off for the sake of shareholders. For example, firing employees if it will maximize shareholder value. How does he