According to nader businesses should also treat their

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ve the responsibility to provide their customers with full information about the products they sell. Ethical companies, says Nader, will often also encourage their customers to “shop around” to make sure they are getting exactly what they want. According to Nader, businesses should also treat their employees well. For example, businesses should take employee grievances seriously and offer their employees a safe place to work. In addition, when possible, businesses should consider “quality of life” issues (such as employee flex-time, and so on). Nader is also in favor of businesses donating funds to meet social needs in the community. The Friedman View According to Milton Friedman, the winner of the 1976 Nobel Prize in economics, “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.” According to Friedman, if a company tried to use government to stifle its competition, “Drive thy business that company would not be or it will drive thee.” engaging in open and free com—Benjamin Franklin petition and therefore would be acting unethically. If a company lied to the buying public about its product, saying the product could provide certain benefits that it actually could not provide, it would be acting unethically. After a business meets these ethical standards, says Friedman, its job is simple: it should earn as much profit as possible by selling the public something it wants to buy. A business should forget about giving money to the Red Cross, the homeless, or the children’s wing of a hospital. All of these organizations are outside its social responsibility. Avon Products is one of only 19 companies to make Business Ethics magazine’s list of 100 Best Corporate Citizens in all six years the award has been given. Avon is known for its threeday fund-raising walks for cancer. Section 1 About Business Firms 169 07 (154-185) EMC Chap 07 11/17/05 5:14 PM Page 170 Asymmetric Information Asymmetric information exists when one party has information that another party to a transaction does not have. For example, let’s suppose you are planning to buy a used car from Jack. If Jack has some information about the car that he doesn’t pass on to you (the potential buyer), then asymmetric information occurs. The information Jack has but doesn’t pass on to you could affect your decision to buy the car. For example, suppose the car has been in an accident, and you don’t want to buy a car that has been damaged. Without Jack giving you this piece of information, you might end up buying a car you don’t really want to buy. Asymmetric information can exist in employer-employee situations too. For example, suppose you are being interviewed for a job by a company. The person interviewing you for a job doesn’t tell you that a few employees have gotten sick worki...
View Full Document

Ask a homework question - tutors are online