The Evolution of the Corporation Essays

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The Evolution of the Corporation

The Evolution of the Corporation

In a capitalist society where the growth and power of corporations are ever evolving it is critical to determine the effects and consequences this evolution brings upon the business world. The Stockholder Theory maintains that managers should act merely as agents to the stockholder and only serve their interests-the maximization of profits (45). Milton Friedman's argument being, they are the owners of the business, and hence they should be entitled to all profits (45). Although this simple profit-motive concept may achieve the desired result, and address all of the interests of the stakeholders it lacks compassion that is so prevalent, and in my opinion superior,
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If law is the public's agency for translating morality into explicit social guidelines and practices it clearly illustrates the lack of morality imposed upon society as a result of the Stockholders Theory.

According to John Stuart Mill most persons, and perhaps all, have a basic moral sensitivity to the needs of their fellow human beings (17). This was so prominently displayed when Southeast Asia was devastated by the recent Tsunami disaster that touched the hearts of both the public and corporate society. Hundreds of millions of dollars were donated by the corporate sector to provide those misfortunate people with aid. No doubt some of those corporations were displaying true social responsibility while others were merely acting the part in order to simulate this appearance. This, in my opinion, is the underlying difference in the two theories I am presently critiquing. Clearly Freeman's Stakeholder theory is superior in this regard. With such massive profits accumulated by large corporations those that decide to bear social responsibility can significantly improve society as a whole.

Immanual Kant proposes that persons should be treated as ends and never purely as means to the ends of others (22). Kantian ethics nicely distinguishes the difference between Friedman's
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