Class Notes 3607
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This 2 page Class Notes was uploaded by Morgan Cox on Tuesday September 8, 2015. The Class Notes belongs to 3607 at Georgia Institute of Technology taught by Professor Salbu in Fall 2015. Since its upload, it has received 17 views. For similar materials see Business Ethics in Business, management at Georgia Institute of Technology.
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Date Created: 09/08/15
MGT 3607 Class Notes August 25, 2015 Class Discussion on Article: What is the Social Responsibility of Business: Pricing Blood Put yourself in the shoes of a CEO of a publicly held company that sells human blood Originally, your price for selling blood to Central American countries is $50/unit But, you get a call from a president of a Central American country where an earthquake has just occurred, and they desperately need blood 100,000 units of blood are needed, so at $50/unit, it would cost $5,000,000 based on your current price The country only has $1 million to spend, and they are in a terrible economic state So what are the possible scenarios? 1. Charge $10/unit, save all 100,000 lives, creating a shortterm loss for your company 2. Charge $25/unit, save 40,000 lives, allowing your company to break even 3. Charge $50/unit, save 20,000 lives, allowing your company to make a good profit 4. Charge $100/unit, save 10,000 lives, allowing your company to make a great profit How would you vote? Next Class: Discussion about Friedman’s take on the social responsibility of a business, and what the Stakeholder Model has to say about it MGT 3607 Class Notes August 27, 2015 Friedman: “The social responsibility of business is to increase its profits” In his opinion, if you’re a leader of a business, you are not the government; you weren’t elected to take care of the people Stakeholder Model: The social responsibility of business is to consider the impact of its actions and decisions on ALL stakeholders Stakeholder: Any person/entity affected by the decisions of the company This model is the opposite of Friedman’s idea Example: Should a business offer a day care center on site? An employee asks their boss to open a day care center, which has been determined to cost $1 million each year for 5 years Friedman would say: The decision should be made based on if the endeavor will make the company more money The Stakeholder Model might open the day care center even if costs outweigh the benefits, because it would be in the interest of the company’s employees Friedman on Equal Employment Opportunity: There should be no protection of the law for race, ethnicity, etc. According to Friedman, part of freedom is the ability to put a sign on your door that says “whites only” Regulation is a cost that companies should avoid Businesses should have absolute discretion when deciding who to serve and hire Friedman on Professional Licensure: All fields should be open to everyone Example: Even if I don’t have a degree from medical school, the right certifications, etc., I should be able to do brain surgery on somebody To Friedman, any kind of regulations imposed on the people that could possibly take away freedom or even infringe on freedom shouldn’t exist
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