Evan And Freeman

Satisfactory Essays
1. Evan and Freeman believe that managers have a trust-keeping relationship to stakeholders. They think the modern corporation should be governed for the stakeholders and to their benefit. The theory that they believe in is the stakeholder theory of the firm. They believe that in the government today the stakeholders are being used as a means to some end and are not able to contribute in determining the prospect of the company that they have a stake in.
2. One of the issues of the “invisible hand” that Evan and Freeman criticize is the free-rider problem. No one has the incentive to keep the water or air clean which results in pollution. The industrial revolution brought about firms trying to externalize the costs of their actions, but the cost is suffered by all through taxes and parameters. Through these issues in 1970 environmental regulations were put in place. Evan and Freeman believe that these issues led to more external control on managerial capitalism.
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Deontology provides the strongest support for the views of Evan and Freeman on the social responsibility of business. Evan and Freeman believe that each person has the right to be treated as an end itself instead of as a means for someone else and Emmanuel Kant believes the same thing. Kant is the philosopher who created deontology. The Formula of Humanity as End believes that each person should be treated right and respected as human beings. Evan and Freeman talk about how Kant’s principle of respect for people cannot be ignored. The Principle of Corporate Rights in the stakeholder theory is very similar to Kant’s Formula of Humanity as an End in that they both believe that respect human rights is very
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