Relationship Between Ethics And The Law In Business Philosophy Essay

Relationship Between Ethics And The Law In Business Philosophy Essay Whatever the power and influence of the lawyers prior to the clients arrival at court, it becomes overwhelming once the parties are on court premises. The powerlessness of clients in the hands of their professional retainers becomes acute. The lawyers control the proceedings because it is they who possess the requisite specialist knowledge. Clients, as employers, have to accept responsibility for the actions of their employees, but their instructions are based on their employees own advice. They are caught in the lawyers web of power. This web is constructed from the triadic interaction of knowledge, culture and discourse. The detailed knowledge of the law, which of course is what people engage lawyers for, is also what sets lawyers apart from other people in the legal setting; and it is the legal setting which allows the lawyer to create an aura of superiority vis-Ã  -vis the legal lay person. It is not just that lawyers possess a certain know-how, but that they are also privy to the values, concepts and understandings which inform that bank of knowledge (DuPlessis, et al. 2011). The statutes of law do not operate in a vacuum or in a neutral environment, but are the products of, and in their turn help to reproduce, a specific legal context. People who are not versed in this legal context and are therefore not privy to the legal culture encapsulated within it, are doubly disadvantaged in the legal setting. They are alienated from the basic facts of law and from the world-view which provides the background to those legal facts. Thus clients, even when they have been told the legal position in regard to their own case, may find it extremely difficult to see the logic or justice which their lawyers assure them is there. Equally, lawyers may feel frustrated at the apparent inability or unwillingness of their clients to accept what they regard as the even-handedness of the law. Different types of organization present different problems and possibilities for equality activists. In business companies they are up against the often inflexible aims of profit, productivi ty, and capital accumulation. In the public sector the balance of service versus cost efficiency can (within governmental constraints) be modified by goals imposed by parties with political control. A trade union is different again. It is a membership organization, usually with a constitution reflecting democratic principles and a perceived obligation to represent its members-in internal transaction of its affairs, in external campaigns and in collective bargaining with the employer. A union is also an employer, of paid organizers and administrators, office workers and other employees. When a trade union takes on sex equality it can and must rethink activity in all these spheres. How should we consider the burden of further speech if we recognize that the legal rule might come as a surprise? As an empirical proposition, one might hazard the guess that building contractors and owners are more likely to be equal in their knowledge of the law than are sellers and buyers of goods. In each case, the suppliers are likely to have some knowledge of the law governing their transactions because that is their business. On the other side of the deal, buildings are usually expensive, and thus justify a substantial investment in the costs of the transaction; moreover, owners are customarily aided, in dealing with contractors, by architects, whose business this also is, and whose trade association supports them with legal information and form documents. By contrast, buyers of goods are often consumers making purchases small in comparison to buildings, and unaided by professionals. In allocating the burden of a rule which is defeasible by contract, there is much to be said f or placing the burden of the rule on the party more likely to find out about it, and therefore more likely to make it a matter of express contractknown to both sidesif the rule is ill-suited to the particular case. While there may be no class of parties systematically more knowledgeable in construction cases, in sale-of-goods cases, sellers may well be. Perfect tender is, as already discussed, the seller-burdening doctrine. Important to an understanding of lawyers and their corporate clients is knowing what attorneys did for corporations. An attorneys representation of a corporate client or employment as house counsel set out a relationship, but function portrays the lawyers role in a clearer brush stroke. Lawyers created new business structures and developed new patterns of commerce. The advice of counsel went far beyond litigation to the essence of business by the close of the century. In the corporate world, lawyers performed many functions. Attorneys were creators of relationships, drafting corporate articles, contracts, and various other legal devices of business. They were facilitators of enterprise, buying and selling land as agents, negotiating contracts, and mediating differences of perspective. Some lawyers, like Jackson A. Graves, were bankers lawyers who became bankers. They smoothed the financial transactions that greased the wheels of industry. The law was in books but lawyers on the stree t put the dynamics of law into action. An important benefit to clients was that lawyers were problem solvers. They sorted out the clutter of enterprise when needed. John D. Bicknell put it well in a letter to E. L. Mayberry of Hemet in 1896: The affairs of the Bear Valley Company are in such an interminable complication and confusion that no attorney can safely undertake to advise without a thorough examination of the whole history of the transactions of this corporation. Solving problems sometimes involved an attorneys immersion in the business of a corporation to bring business and legal sense to the clients transactions. When an attorney had an ongoing relationship with a company, knowledge of the business made providing legal and business advice easier. Lawyers also sorted out understandings, intent, and meaning in transactions for corporations. Henry W. OMelvenys journal entry for Saturday, February 4, 1899, recorded one such session among lawyers. Knowledge of the law is an es sential business asset. Informed owners and managers can protect their businesses by ensuring compliance with legal requirements. They can capitalize on the planning function of law to ensure the future of their business by entering into contracts (DuPlessis, et al. 2011). What is the relationship between ethics and the law in business? What is ethics? How does it compare to economics, the social science wherein commerce is studied? What scope does ethics have and what are its various subdivisions? What are some prominent systems and theories of ethics? What should ethics be understood to involve for ordinary citizens not specializing in moral philosophy; i.e., what is the common sense of ethics? What problems may face us in the relationship between ethics and law, and between ethics and public policy? According to DuPlessis, et al. business ethics are moral principles and values that seek to determine right and wrong in the business world (2011). A final point should be noted about ethics in general. However much one carefully reads articles or listens to lectures about ethics, morality, standards of right conduct, ultimately the matter is in the individuals own hand, unless he or she is a prisoner or slave or is severely incapacitated. The crucial feature of ethics is, after all, personal responsibility to do well at living a human life. That is not something that can be implanted or programmed into people, but must be a matter of the individuals own choice and will. Whether a person is indeed making the choice to act rightly and what this means is just what ethics and its various branches, including business ethics, ultimately attempt to clarify. Ethics deals with the question of how persons should conduct themselves. Managerial ethics, then, is concerned with the question of how a manager (or an entrepreneur as manager) should conduct him or herself so that the organizational goals and objectives are achieved in a manner consistent with the principles of conduct that ethics dictates. There are two areas to which ethical principles can be applied to managerial conduct: first, to the objectives or goals chosen for the organization, and second, to the strategies, tactics, and policies employed for the attainment of these objectives or goals. Therefore, managerial ethics can be divided into two parts; management goals, and management strategies, tactics, and policies. Business Goals Within a free market society, it is generally thought that the primary goal of a business organization is the attainment of profit. Though businesses often consider other objectives (service to customers, employee needs and wellbeing, assistance to the needy) it cannot be denied that the attainment of profit is the overall and guiding objective of the business organization (DuPlessis, et al. 2011). Thus, the first question that managerial ethics should consider is whether or not it is ethically proper to make the attainment of profit the objective of a business firm. This is a most important question today, for it is sometimes said that the pursuit of profit ought not be the primary and dominant goal of a business firm but rather must be balanced by concern for customers, employees, or society. In order to see what the standards for proper managerial conduct might be, we need to understand what is meant by free market society. Management Goals Within a free market society, it is generally thought that the primary goal of a business organization is the attainment of profit. Though businesses often consider other objectives (service to customers, employee needs and wellbeing, assistance to the needy) it cannot be denied that the attainment of profit is the overall and guiding objective of the business organization. Thus, the first question that managerial ethics should consider is whether or not it is ethically proper to make the attainment of profit the objective of a business firm. This is a most important question today, for it is sometimes said that the pursuit of profit ought not be the primary and dominant goal of a business firm but rather must be balanced by concern for customers, employees, or society. In order to see what the standards for proper managerial conduct might be, we need to understand what is meant by free market society and profit, and what ethics has to say about such a society and goal (DuPlessis, et al. 2011). The Free Market Society and Profit The terms free market society are not solely descriptive. They signify a set of economic and social arrangements that presupposes a certain ethical perspective. For example, Murder Incorporated would not be regarded as a business firm in such a society but would instead be viewed as criminal that ought not and must not be allowed to operate. Similarly, the term profit does not mean merely a return on an economic exchange that is over costs; it also involves a certain type of exchange; namely, a free or voluntary exchange. In order to understand the ethical perspective from which the terms free market society and profit derive their particular meaning, we should consider the notion of individual rights. Business ethics-while sometimes but not always coextensive with legal requirements are also increasingly important to running a successful business (DuPlessis, et al. 2011). A free market society is a society based on the recognition of individual rights. Individual rights are the means of subordinating society to moral law. They determine what matters of morality; what ought to be, are to be matters of law; what must be. The view of rights that a free market society is based on is one that holds that every person has the right to life and its corollaries: liberty and property. These rights are rights to actions -that is, the right to take all the actions necessary for the support and furtherance of ones life, and the right to the action of producing or earning something and keeping, using, and disposing of it according to ones goals. To have a right in this sense morally obligates others to abstain from physical compulsion, coercion, or interference. Such actions may only be taken in self-defense and only against those who initiate physical compulsion, coercion, or interference. The right to life also morally sanctions the and profit, and what ethics h as to say about such a society and goal. freedom to act by means of ones voluntary, uncoerced choice for ones own goals. Thus, the activities of producing and exchanging goods and services in a free market society are both protected and governed by this conception of individual rights. Ethics, the Free Market Society, and the Pursuit of Profit Within the legal framework of a free market society, is the managerial decision to make the attainment of profit the overall and guiding objective of the business firm ethically justifiable? Are the principles in terms of which the legal framework of a free market society developed (that is, the foregoing account of individual rights) ethically justifiable? The answers to these questions cannot be discovered by managerial or business ethics alone. These questions require the more fundamental disciplines of ethics and political philosophy. The standard for proper managerial conduct cannot be derived independently of those ethical principles that determine how human beings ought to live their lives and those political principles that determine the ethical principles by which human beings must live their lives, that is, be a matter of law. The standard for proper managerial conduct must be in accord with what the principles of ethics and political philosophy advise; it cannot contradict the overall frame of reference that the more basic disciplines of ethics and political philosophy provide.

Security Monitoring

Security Monitoring Amy Smart CMGT/442 University of Phoenix Online Instructor: James Summerlin April 15,2013 Security Monitoring In this paper we will be discussing security monitoring techniques that can and should be used within an organization to help put together an solid action plan when there is an risk identified. For any business or organization to ensure that they are conducting quality business to their customers as well as achieving their business goals should consider risk management as an huge part of their organization. Security Monitoring ProcessThe organization IT department and e- commerce applications are the ones that conduct security monitoring and measuring. Security monitoring is very important, because it is the process of preventing attacks and responding to threats that could happen in the future. An organizations can prevent small risk from turning into a bigger and more expensive problem by taking preventative steps. The IT department should be monitoring the system at all times and it must be implemented both externally and internally. However the first step each organization should take when starting the monitoring system is to first discuss what a potential risk is.For an organization to truly have an secure system they must determine an list of risk. Businesses and organizations can use security monitoring to ensure both integrity and confidentiality for sensitive information. As well as holding IT administrators responsible for keeping their organizations sensitive and financial assets safe and secure from unwanted eyes. Internal IT and Secure Monitoring Processes The security monitoring activities that should be conducted in an organization with both internal IT payroll, human resources, inventory, general ledger, inventory monitoring.However these internal structures constantly grow and increase revenue and the possible risks are also always growing and increasing. So for an organization to make sure that there information is safe and secure they will have to make sure that they have their network secure. There are an number of tools an business or organization could use to help keep the network secure, but we will only be discussing a few. The first step would be to create an good an strong password. The pros on having an password would be that it helps to protect unwanted users on their computers.However employees could forget the password so the organization would have to decide if that was an problem then they may want to have an only IT members knowing the password. Then we would have to decide which network firewall would work best for their business. The network firewall is very important to have, because it protects the network from unwanted users and can be used from small company networks to large corporate system. Another great tool to use to keep the organization network secure internet filtering software and monitoring tools, which would be used to protect their employers from inappropriate usage from their employees.Lastly vulnerability assessment and penetration testing is an very great tool to use, because any company that does any business online should and needs to perform an regular vulnerability assessment on their network. The next step in keeping all the organization personal and financial information secure would be to set in place an antivirus protection. Antivirus is important to have because it will protect the computer and the information store in it safe from virus that can wreak havoc on your computer and the information store upon it as well.However antivirus cannot do it alone so by also making sure the organization computer are always up-to- date and running properly is another step closer to being fully protected. Some examples of Antivirus software would be Norton, AVG, Shield Deluxe, or Panda Antivirus Pro, and all are very good antivirus software to use to keep their computers safe and secure. Data security is the next step in which an organizati on needs to take to make sure that their whole system is safe and secure from the inside out. Establishing an strong password is the first level of defense to keeping data secure.The next would be to make sure that there is an strong firewall, by having firewalls in place will help to keep the network properly protected from viruses and hackers. Data security is also achieved by having antivirus and anti- malware which is an systems last line of defense if everything else has failed. Having an organizations computer systems up to date and running properly is another great step to keeping their data safe, because if their computer software is not up to date then it won't be able to provide the upmost protection towards their personal data.Performing backups to the external hard drive is the best way to insure that all the data is stored safely. Then lastly is to have their IT department monitor diligently so that they can look for specific information coming out of their network. In conclusion we have discussed the security monitoring activities that should be conducted in an organization with both internal IT payroll, human resources, inventory, general ledger, inventory monitoring. As well as how important each one of these activities are and how they help to monitor and keep their system safe and secure from unwanted eyes.

Doctrine of Social Responsibility

Doctrine of Social ResponsibilityThe doctrine of social responsibility holds that individuals and organizations should advance the interests of society at large. They can do this by abstaining from harmful actions and by performing socially beneficial acts. Although the doctrine of social responsibility applies to people and organizations, much of the discussion focuses on business and the extent to which social responsibility should influence business decisions.Examples of Social Responsibility?AnswerWhen individuals and organizations say they are motivated by social responsibility, they are referring to a feeling of ethical obligation to act in ways that benefit society.In recent years, the mantra of social responsibility has been taken up by small businesses, non-profits, and corporations alike. Some notable examples of corporate efforts at social responsibility include: Ben & Jerry's, which started the Ben & Jerry's Foundation and donates 7.5% of profits to charitable causes Kenn eth Cole, which has supported AIDS awareness and research Pedigree, which distributes grants and food to animal shelters.Each of these companies has recognized that success in business alone falls short of contributing to the societies they share in, and have taken the extra step to address their ethical obligations.On an individual level, everyone can engage in acts of social responsibility, every day. Consider the consequences of your actions on society as whole. Turn off lights and electronics when they aren't needed to conserve energy. Donate money to trustworthy organizations that work to further causes that interest you.VolunteerRemember, the smallest act of individual social responsibility can have a powerful impact when multiplied by an entire community.Voluntary Hazard EliminationCompanies involved with social responsibility often take action to voluntarily eliminate production practices that could cause harm for the public, regardless of whether they are required by law. F or example, a business could institute a hazard control program that includes steps to protect the public from exposure to hazardous substances through education and awareness. A plant that uses chemicals could implement a safety inspection checklist to guide staff in best practices when handling potentially dangerous substances and materials. A business that makes excessive noise and vibration could analyze the effects its work has on the environment by surveying local residents. The information received could be used to adjust activities and develop soundproofing to lessen public exposure to noise pollution. Community DevelopmentCompanies, businesses and corporations concerned with social responsibility align with appropriate institutions to create a better environment to live and work. For example, a corporation or business may set up a foundation to assist in learning or education for the public. This action will be viewed as an asset to all of the communities that it serves, wh ile developing a positive public profile. Related Reading: Role of Social Responsibility in Marketing PhilanthropyBusinesses involved in philanthropy make monetary contributions that provide aid to local charitable, educational and health-related organizations to assist under-served or impoverished communities. This action can assist people in acquiring marketable skills to reduce poverty, provide education and help the environment. For example, the Bill and Melinda Gates Foundation focuses on global initiatives for education, agriculture and health issues, donating computers to schools and funding work on vaccines to prevent polio and HIV/AIDS. Creating Shared ValueCorporate responsibility interests are often referred to as creating shared value or CSV, which is based upon the connection between corporate success and social well-being. Since a business needs a productive workforce to  function, health and education are key components to that equation. Profitable and successful bu sinesses must thrive so that society may develop and survive. An example of how CSV works could be a company-sponsored contest involving a project to improve the management and access of water used by a farming community, to foster public health. Social Education and AwarenessCompanies that engage in socially responsible investing use positioning to exert pressure on businesses to adopt socially responsible behavior themselves. To do this, they use media and Internet distribution to expose the potentially harmful activities of organizations. This creates an educational dialogue for the public by developing social community awareness. This kind of collective activism can be affective in reaching social education and awareness goals. Integrating a social awareness strategy into the business model can also aid companies in monitoring active compliance with ethical business standards and applicable laws. For other types of responsibility, see Responsibility (disambiguation). Social responsibility is an ethical theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual has to perform so as to maintain a balance between the economy and the ecosystem. A trade-off always[citation needed] exists between economic development, in the material sense, and the welfare of the society and environment. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business organizations but also to everyone whose any action impacts the environment. [1] This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Businesses can use ethical decision making to secure their businesses by making decisions that allow for government agencies to minimize their involvement with the corporation. For instance if a company follows the United States Environmental Protection Agency (EPA) guidelines for emissions on dangerous pollutants and even goes an extra step to get involved in the community and address those concerns that the public might have; they would be less likely to have the EPA investigate them for environmental concerns. [3] â€Å"A significant element of current thinking about privacy, however, stresses â€Å"self-regulation† rather than market or government mechanisms for protecting personal information†. According to some experts, most rules and regulations are formed due to public outcry, which threatens profit maximization and therefore the well-being of the shareholder, and that if there is not outcry there often will be limited regulation. [5] Critics argue that Corporate social responsibility (CSR) distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful corporations though there is no systematic evidence to support these criticisms. A significant number of studies have shown no negative influence on shareholder results from CSR but rather a slightly negative correlation with improved shareholder returns. [clarification needed][6] The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the â€Å"social responsibilities of business in a free-enterprise system,† I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned â€Å"merely† with profit but also with promoting desirable â€Å"social† ends; that business has a â€Å"social conscience† and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are–or would be if they or anyone else took them seriously–preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades. The discussions of the â€Å"social responsibilities of business† are notable for their analytical looseness and lack of rigor. What does it mean to say that â€Å"business† has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but â€Å"business† as a whole cannot be said to have responsibilities, even in this vague sense. The first step toward clarity in examining the doctrine of the social responsibility of business is to ask precisely what it implies for whom. Presumably, the individuals who are to be responsible are businessmen, which means individual proprietors or corporate executives. Most of the discussion of social responsibility is directed at corporations, so in what follows I shall mostly neglect the individual proprietors and speak of corporate executives. In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose–for example, a hospital or a school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services. In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them. Needless to say, this does not mean that it is easy to judge how well he is performing his task. But at least the criterion of performance is straightforward, and the persons among whom a voluntary contractual arrangement exists are clearly defined. Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily–to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He ma}. feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, even to leave his job, for example, to join his country's armed forces. Ifwe wish, we may refer to some of these responsibilities as â€Å"social responsibilities. † But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are â€Å"social responsibilities,† they are the social responsibilities of individuals, not of business. What does it mean to say that the corporate executive has a â€Å"social responsibility† in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price in crease would be in the best interests of the corporation. Or that he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire â€Å"hardcore† unemployed instead of better qualified available workmen to contribute to the social objective of reducing poverty. In each of these cases, the corporate executive would be spending someone else's money for a general social interest. Insofar as his actions in accord with his â€Å"social responsibility† reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money. The stockholders or the customers or the employees could separately spend their own money on the particular action if they wished to do so. The executive is exercising a distinct â€Å"social responsibility,† rather than serving as an agent of the stockholders or the customers or the employees, only if he spends the money in a different way than they would have spent it. But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other. This process raises political questions on two levels: principle and consequences. On the level of political principle, the imposition of taxes and the expenditure of tax proceeds are governmental functions. We have established elaborate constitutional, parliamentary and judicial provisions to control these functions, to assure that taxes are imposed so far as possible in accordance with the preferences and desires of the public–after all, â€Å"taxation without representation† was one of the battle cries of the American Revolution. We have a system of checks and balances to separate the legislative function of imposing taxes and enacting expenditures from the executive function of collecting taxes and administering expenditure programs and from the judicial function of mediating disputes and interpreting the law. Here the businessman–self-selected or appointed directly or indirectly by stockholders–is to be simultaneously legislator, executive and, jurist. He is to decide whom to tax by how much and for what purpose, and he is to spend the proceeds–all this guided only by general exhortations from on high to restrain inflation, improve the environment, fight poverty and so on and on. The whole justification for permitting the corporate executive to be selected by the stockholders is that the executive is an agent serving the interests of his principal. This justification disappears when the corporate executive imposes taxes and spends the proceeds for â€Å"social† purposes. He becomes in effect a public employee, a civil servant, even though he remains in name an employee of a private enterprise. On grounds of political principle, it is intolerable that such civil servants–insofar as their actions in the name of social responsibility are real and not just window-dressing–should be selected as they are now. If they are to be civil servants, then they must be elected through a political process. If they are to impose taxes and make expenditures to foster â€Å"social† objectives, then political machinery must be set up to make the assessment of taxes and to determine through a political process the objectives to be served. This is the basic reason why the doctrine of â€Å"social responsibility† involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce resources to alternative uses. On the grounds of consequences, can the corporate executive in fact discharge his alleged â€Å"social responsibilities? † On the other hand, suppose he could get away with spending the stockholders' or customers' or employees' money. How is he to know how to spend it? He is told that he must contribute to fighting inflation. How is he to know what action of his will contribute to that end? He is presumably an expert in running his company–in producing a product or selling it or financing it. But nothing about his selection makes him an expert on inflation. Will his hold ing down the price of his product reduce inflationary pressure? Or, by leaving more spending power in the hands of his customers, simply divert it elsewhere? Or, by forcing him to produce less because of the lower price, will it simply contribute to shortages? Even if he could answer these questions, how much cost is he justified in imposing on his stockholders, customers and employees for this social purpose? What is his appropriate share and what is the appropriate share of others? And, whether he wants to or not, can he get away with spending his stockholders', customers' or employees' money? Will not the stockholders fire him? (Either the present ones or those who take over when his actions in the name of social responsibility have reduced the corporation's profits and the price of its stock. ) His customers and his employees can desert him for other producers and employers less scrupulous in exercising their social responsibilities. This facet of â€Å"social responsibility† doc trine is brought into sharp relief when the doctrine is used to justify wage restraint by trade unions. The conflict of interest is naked and clear when union officials are asked to subordinate the interest of their members to some more general purpose. If the union officials try to enforce wage restraint, the consequence is likely to be wildcat strikes, rank-and-file revolts and the emergence of strong competitors for their jobs. We thus have the ironic phenomenon that union leaders–at least in the U. S. –have objected to Government interference with the market far more consistently and courageously than have business leaders. The difficulty of exercising â€Å"social responsibility† illustrates, of course, the great virtue of private competitive enterprise–it forces people to be responsible for their own actions and makes it difficult for them to â€Å"exploit† other people for either selfish or unselfish purposes. They can do good–but only at their own expense. Many a reader who has followed the argument this far may be tempted to remonstrate that it is all well and good to speak of Government's having the responsibility to impose taxes and determine expenditures for such â€Å"social† purposes as controlling pollution or training the hard-core unemployed, but that the problems are too urgent to wait on the slow course of political processes, that the exercise of social responsibility by businessmen is a quicker and surer way to solve pressing current problems. Aside from the question of fact–I share Adam Smith's skepticism about the benefits that can be expected from â€Å"those who affected to trade for the public good†Ã¢â‚¬â€œthis argument must be rejected on grounds of principle. What it amounts to is an assertion that those who favor the taxes and expenditures in question have failed to persuade a majority of their fellow citizens to be of like mind and that they are seeking to attain by undemocratic procedures what they cannot attain by democratic procedures. In a free society, it is hard for â€Å"evil† people to do â€Å"evil,† especially since one man's good is another's evil. I have, for simplicity, concentrated on the special case of the corporate executive, except only for the brief digression on trade unions. But precisely the same argument applies to the newer phenomenon of calling upon stockholders to require corporations to exercise social responsibility (the recent G. M crusade for example). In most of these cases, what is in effect involved is some stockholders trying to get other stockholders (or customers or employees) to contribute against their will to â€Å"social† causes favored by the activists. Insofar as they succeed, they are again imposing taxes and spending the proceeds. The situation of the individual proprietor is somewhat different. If he acts to reduce the returns of his enterprise in order to exercise his â€Å"social responsibility,† he is spending his own money, not someone else's. If he wishes to spend his money on such purposes, that is his right, and I cannot see that there is any objection to his doing so. In the process, he, too, may impose costs on employees and customers. However, because he is far less likely than a large corporation or union to have monopolistic power, any such side effects will tend to be minor. Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions. To illustrate, it may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses from pilferage and sabotage or have other worthwhile effects. Or it may be that, given the laws about the deductibility of corporate charitable contributions, the stockholders can contribute more to charities they favor by having the corporation make the gift than by doing it themselves, since they can in that way contribute an amount that would otherwise have been paid as corporate taxes. In each of these–and many similar–cases, there is a strong temptation to rationalize these actions as an exercise of â€Å"social responsibility. † In the present climate of opinion, with its wide spread aversion to â€Å"capitalism,† â€Å"profits,† the â€Å"soulless corporation† and so on, this is one way for a corporation to generate goodwill as a by-product of expenditures that are entirely justified in its own self-interest. It would be inconsistent of me to call on corporate executives to refrain from this hypocritical window-dressing because it harms the foundations of a free society. That would be to call on them to exercise a â€Å"social responsibility†! If our institutions, and the attitudes of the public make it in their self-interest to cloak their actions in this way, I cannot summon much indignation to denounce them. At the same time, I can express admiration for those individual proprietors or owners of closely held corporations or stockholders of more broadly held corporations who disdain such tactics as approaching fraud. Whether blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and prestigious businessmen, does clearly harm the foundations of a free society. I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely farsighted and clearheaded in matters that are internal to their businesses. They are incredibly shortsighted and muddleheaded in matters that are outside their businesses but affect the possible survival of business in general. This shortsightedness is strikingly exemplified in the calls from many businessmen for wage and price guidelines or controls or income policies. There is nothing that could do more in a brief period to destroy a market system and replace it by a centrally controlled system than effective governmental control of prices and wages. The shortsightedness is also exemplified in speeches by businessmen on social responsibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse. The political principle that underlies the market mechanism is unanimity. In an ideal free market resting on private property, no individual can coerce any other, all cooperation is voluntary, all parties to such cooperation benefit or they need not participate. There are no values, no â€Å"social† responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form. The political principle that underlies the political mechanism is conformity. The individual must serve a more general social interest–whether that be determined by a church or a dictator or a majority. The individual may have a vote and say in what is to be done, but if he is overruled, he must conform. It is appropriate for some to require others to contribute to a general social purpose whether they wish to or not. Unfortunately, unanimity is not always feasible. There are some respects in which conformity appears unavoidable, so I do not see how one can avoid the use of the political mechanism altogether. But the doctrine of â€Å"social responsibility† taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my bookCapitalism and Freedom, I have called it a â€Å"fundamentally subversive doctrine† in a free society, and have said that in such a society, â€Å"there is one and only one social responsibility of business–to use it 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. â€Å"

The Indian Economic Reforms Of The Economy - 1603 Words

The Indian economic reforms of 1991 are a prime example of radical changes in the economic policies of India from a conservative to an orthodox one. Prior to the reforms, the country followed the system of regularising imports and replacing them with domestic products, with the state playing the dominant role in economy. However serious macroeconomic and debt payment crisis forced the government to implement radical policies in the form of the Economic Reforms of 1991. Situation Prior 1991- Prior to the reforms, the Indian economic strategy pursued import-substituting industrialisation1 with the state playing a dominant role in the economy. This was ground-set prior independence and attracted wide support across political spectrum. The†¦show more content†¦Political instability led to a lack of confidence in investors about the government s ability to manage the economy. Foreign exchange reserves dwindled to an all time low of the cost of two weeks worth of import. This prompted the government to immediately take action and reform the basic economic structure. The crisis of 1991 came after 11 years of improved and stable growth performance, lower inflation rates and steady decline in poverty. These reforms tried to consciously fashion the new policy as close to the Washington Consensus as was permissible by the then prevailing economic condition. Steps taken by the Government- The following were the steps taken by the government in the light of the 1991 economic crisis. 1.Problems of Fiscal deficit To handle the problem of fiscal deficit, the following steps were taken †¢ The tax rate for individual and corporate tax was reduced to bring more people under the tax net. †¢ The tax procedure was made more efficient and simplified. †¢ Heavy reductions were implemented in the import duties. 2.Removal and relaxation of government control over industries In order to make the industrial management and provide an impetus for growth and development, the industries were given more freedom in the following ways- †¢ Freedom from licenses and various other restrictions †¢ Foreign technological imports and usage were promoted to ensure technological