18. We take for granted that a primary objective and obligation of a corporation is to
0 ]: H# h# W/ B9 D- a8 B6 w0 u* Gmaximize profits. But does this mean a corporation cannot also fulfill its obligations to
$ A! a- E9 ^4 r& p$ k5 Gsociety? The speaker claims mat the two duties necessarily conflict. In my view, - ^& G2 ]+ a. _5 L
however, a corporation's duties to maximize shareholder wealth and to serve society
' s, E2 [3 ]+ \; S4 ~( swill at times coincide and at times-conflict; and when they do conflict, neither takes
4 p8 {: P6 a, F% C. [% [automatic precedence over the other.
, t2 c) @" t& g7 k$ }/ K. B; j .Beyond the obvious duty to maximize shareholder wealth, corporations indeed 1 D* n" `1 y$ A8 @+ W
owe a duty to serve society, especially the immediate community, which permits : n5 k& N4 q' _% X9 G ~& v
corporations to operate in exchange for an implicit promise that the corporations will do
; c6 h$ B5 h% e' N0 Bno harm and will bring some benefit to the community. These duties can often be ) G7 v" X6 U9 k2 K! h9 E
fulfilled together. For example, a successful corporation brings jobs and related ( _# ]: U2 v$ ?$ E; z1 L
economic benefit to the community. And, by contributing to community activities and
8 c/ D4 c$ Y. D; [9 P! Kchanges in other ways, the corporation gains a reputation for social responsibility that
' \0 y* N8 m3 p& _) y* O) L* H& m- {often helps it become even more successful.
. j5 e3 J! O/ g8 k! _& e, j, | However, at times these duties do conflict. Consider, for instance, a company that
- W4 g, ^( t& r5 punknowingly leaks into the ground a toxic substance that threatens to contaminate local ; B0 b; M( r/ x" b! o) x* l
groundwater. While the company may favor an inexpensive containment program,
) z. e1 O) `+ ^) T- fcommunity leaders may want the company to go further by cleaning up and restoring - i7 o9 \+ h6 P1 s& w* d
their environment—even if the expense will force the company to leave and take jobs ; t7 p2 M; n& \
from the community. Whatever the company decides, it should not assume that 4 v. o4 J( _. c6 P2 P
protecting profits automatically outweighs social obligation. In many instances it does , L4 o) g! h8 k& T) X5 u6 }
not, as highly visible tobacco, automobile safety, and asbestos liability cases aptly ! U4 K( V2 S! I) }: a
illustrate. Such examples reveal a limit as to how far a corporation can ethically go in : r* ~6 S+ P( p, }: z
trading off the well being of the community for the sake of its own profits.
c" f8 u a' z9 P6 N5 l In sum, corporations have duties both to do well and to do good. Although
/ }0 x/ g% @0 H% y9 rconflict between these duties is not inevitable, it does occur. Determining which duty
& K8 |. F' V; k) ~+ Wtakes precedence in time of conflict requires careful consideration of all the ethical
$ y4 Y' y2 e8 @ A& p9 ^ramifications of each alternative. |