Corporate Social Responsibility : Ge

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1. Corporate social responsibility is defined in Chapter 5 as the corporate duty to create wealth by using means that avoid harm to, protect, or enhance societal assets. Did GE in the Welch era fulfill this duty? Could it have done better? What should it have done?

By using the definition in the text book there is no question that GE created wealth. In the case study the author uses the example of an investor who put $100 into GE in 1980. If that investor would hold on to the GE stock that investor would have a return of $6,749 when Welch retired.
GE under Jack Welch was the most profitable company of its time, but was the wealth it created socially responsible? Was GE looking at different ways to avoided harm to, protect and enhanced
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Friedman felt that Governments should run social programs, not corporations. In the free enterprise system managers are responsible only to stockholders. Spending money on social projects wrongly appropriates money that belongs to the company. It also robs consumers, who must pay higher prices for products. Friedman argued that this is “taxation without representation.” Corporate Social responsibility threatens political freedom because it requires that companies perform political functions, gives executives political power, and opens business to evaluation by political criteria. Friedman also argued that corporations should not take on political and social projects outside of their economic expertise. Friedman Idea argues that the only social responsibility companies have are to maximize profits while staying within the law. According to the case study Friedman’s ideas seems to characterize the attitude of Jack Welch while he was in Charge at GE. Welch concentrated on playing the competitive game, building dominant businesses, and making money. Although GE did give money to different causes and charities, never emphasized any social responsibility, and focused the company on only increasing the shareholders return on investment. Welch agreed with Friedman’s view that managers should give primacy to the interests of shareholders.

3. How
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