Reaction Paper Bhopal Post

Milton Friedman’s shareholder theory of management says that the purpose of a business is to make money for the owner or the stockholders of the business. Friedman says that there is only one social responsibility for the business: to use its resources in order to increase

First thing let us start with a little overview of what Milton Friedman exposed in his article. It seems that the whole point of his essay revolves around one basic statement which clearly says that the only social responsibility of business is to use its resources and engage in activities designed to increase its profits so long it stays within the rules of the game (Milton Friedman, the social responsibility of business is to increase profit).

What Friedman implies is that shareholders should only be concerned with maximizing profits and not be obligated to be “socially responsible.” In that case, the manager would only have one priority, to maximize profits. However, what if that manager determined that social endeavors is the best option to maximize profits? This would make the corporation socially responsible while still maintaining maximum profits. The argument presented by Friedman in this case is that while the manager is performing as expected by maximizing profits, this type of “social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.”

Subsequently, Denning may have misinterpreted Friedman’s main argument. The actual title of Friedman's article is "The Social Responsibility of Business is to Increase its Profits". Denning hastily substituted the word "sole" for "social" and misinterpreted Friedman’s argument to be that that the sole purpose of the firm is to make money for shareholders. This is not true. The main issue Friedman was tackling was the social responsibility of business; the responsibility that it has to the society. In fact, the word “sole” was not mentioned even once in the

When the federal government also entered the picture they didn’t have any type of enforcement power to make Centralia Company and their inspections served as only “ research” and their recommendations were also the same as Scanlan. The federal government made 106 recommendations including “ 33 as major” the report went to Illinois Department and they also didn’t do anything to address the red flags. If there was a stronger relationship between the state and federal government then both of this agency could have address the red flags. Made the company comply with their recommendation and improve miner job safely and if the company didn’t do what they say then there next option was to shut down the company until they completed the improve and clean up but none of these options were taken and the tragedy happen down the road.

Milton Friedman argues that persons may choose to undertake social responsibilities to their communities, churches, or nations, and devote their own incomes to causes that they deem morally worthy. But, he adds, if corporate executives attempt to take such social responsibilities or to direct the corporation’s profits to such personal causes, without approval from the shareholders, then:

The shell refinery located close to the day care in the reservation, leaked toxic chemicals into the air. The children got sick and no one notified the Aamjiwnaang people to tell them it leaked so the children went misdiagnosed. There are many spills that go unnoticed and the effects on the people of Sarnia and the workers are dangerous. Each plant is allowed to produce a certain amount of chemicals which is said to be “okay for the environment”. No study has been done to know what happens when all the different chemicals mix together in the

As the shareholder of Samarco, the disaster damaged BHP 's reputation and benefits. BHP needs to prepare huge funds for the clean-up bill, potential fines and compensation for those injured or killed people. In stock market, BHP took a beating in trade after the disaster. BHP fell 5.7 per cent in London and grappled with the lowest iron prices in a decade. The exact cause of the burst dam is unclear because the investigation is still continuing. However, a 2013 assessment by the independent Brazilian organisation highlighted concerns about the integrity of the tailings dam and recommended against renewing the licence which was ignored by Samarco (Ricardo, 2016). people have doubted that whether other tailings dams of BHP around the world is structurally sound and raised eyebrows about how they manage the risks at other operations. The disaster raised the suspicion of dependability of tailings dams at other mines owned by BHP. Besides, this disaster reminded people of past failures including the collapse of the BHP Ok Tedi tailings dam in the late of 20st century which is also considered as one of the worst environmental disaster (3). More and more people begin to criticize the operation way of BHP and lose the confidence for BHP due to their failure of diligence responsibilities. The following paragraph on this essay will discuss and analyze whether BHP’s behaviour is ethical or unethical through shareholder and stakeholder theories.

Just after midnight on December 3, 1984, a pesticide plant in Bhopal, India had a chemical leak accident. The chemical that was released into the air is called methyl isocyanate, or MIC, used to make pesticides. This chemical is tremendously harmful and fatal to humans, livestock, and crops. Only a short-term exposure may cause death or unfavorable health effects. The slums of Bhopal and its residents that surrounded the plant which were mostly affected by the gas suffered dearly. An estimated 8,000 people dead and about 300,000 more suffering from its effects. Bloated carcasses of cattle dotted the streets. Tree and plant leaves were yellow and brittle. "Corpses littered the streets and discovered behind locked doors, trapped in private

Friedman, M. (1970, September 13). The social responsibility of business is to enhance its profits. The New York Times Magazine.

Milton Friedman wrote in his famous 1970’s article in The New York Times Magazine, that “the one and only social responsibility of business, is to increase profits for shareholders.” Milton Friedman's view on business responsibility accentuates the importance of maximizing firm's value. He pointed that the “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, engaged in open and free completion without deception or fraud’’ and by taking on the burden of social cost, the business becomes less efficient (Milton Friedman, 1962).

Broughton, Edward, “The Bhopal disaster and its aftermath: a review”, Edward Broughton, Environ Health. 2005; Published online 2005 May, 10http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1142333/

As a result, the following came a lot of lawsuits, demanding compensation, and investigations, investigating the cause of the MIC leak, against the plant. During the investigations, both the government of India and the interior of the Union Carbide did research on that incident. We are not surprised at their different answers because the plant wanted to cover the truth that was harmful to themselves and the government as a result could not get the truth on the other hand. However, I can¡¦t deny that the plant really did something such as relief fund, training school, and so on to prove that they really wanted to compensate for that gas leak. In this case, I don¡¦t think that the CEO of Union Carbide should be arrested or be sentenced. But I do think he should be responsible for the whole case. In other words, he should resign for the whole incident.

For a long time now, there has been much debate over the social responsibility of a business. Friedman is one of the most influential

Important Note: This sample essay mainly illustrates the structure of your assignment on ethical issues of a company selected by you. You may first identify two or three ethical problems and then discuss how to solve them. Remember including relevant citations to support your evidences and viewpoints.