What is Milton Friedman’s view on the social responsibility of business?
Milton Friedman believes that business have a social responsibility to its shareholders, not anyone else, as long as all requirements by law are met. According to Friedman, a business' main goal is to make profit and win. Having an interest in anyone other than the stakeholders translates into stealing from the stakeholders, whom are the only ones with rightful claims and concerns. In the case of Weyco Inc., the company does not follow the social responsibility that Friedman talks about. By implementing the policy, Weyco is trying to dedicate their "social responsibility" to the health of its employees. Although they back it up with saying that the policy helps reduce health care costs, the company may lose valuable human resources due to the right to fire employees who do not wish to follow the policy, therefore, the company may suffer and shareholders could potentially affect the company's success.
What are the six groups of stakeholders and what does it mean to say we should take account of the interests of stakeholders in business decisions?
The six groups of stakeholders consists of the owners, employees, customers, suppliers, the industry, and the community. In order to take into account the interests of stakeholders in business decisions, a company must first know who are the stakeholders and why they have an interest in the company. Although most theorist such as Carr and Friedman, suggest that a company should only have an interest in the shareholders rather than the stakeholders, paying attention to some stakeholders opinions on business decisions can enhance the company's success. If a company takes into account the wishes of its employees and create a work environment that is both safe and respectable, it can enhance employees' productivity, which may result in greater profit for the company. Along with employees, if a company considers the community's view on certain topics, such a fair trade and green technology, it can result in higher sales or increase customer loyalty.
Weyco is taking into account its employees health when implementing the smoking policy along with the incentives package. However, the decision made intrudes with the employees personal life and decision, which ultimately may make it seem to the employees like they are not respected as stakeholders if they were to violate the policy while they were off work. They may also feel disposable regardless of their skills and human capital since they may be fired. Lastly, their interests and privacy are not being acknowledge in the decision of the policy which does not affect the business proficiency