Flashcards in Economics Deck (10)
Definition of business ethics
Business ethics are the principles that guide the way a business behaves.
Corporate Social Responsibility
Companies have wider responsibilities and should minimize any harm to the environment and work in ways that do not damage the communities.
In what negative way do "socially responsible" actions affect stockholders, customers, and employees?
The cost of socially responsible actions has to be paid in the form of lower dividends, higher prices or lower wages.
According to Friedman, in what way are "socially responsible" actions by business "undemocratic"?
Because they involve doing things that should be done by governments, and if a government is not doing these
things, it is because the electors chose a government that
did not say it was going to do them.
Shareholders vs Stakeholders
-Shareholders: are always stakeholders.
They can be an individual, company, or institution that owns at least one share of a company and therefore has a financial interest in its profitability.
- Stakeholders: are not always shareholders.
They can be owners and shareholders, employees of the company, customers, suppliers and vendors
Efficiency & employment
- Increased efficiency generally leads to job losses.
- Most people generally tend to be more interested in things like a challenging job than security.
Possible solutions to unemployment
- people with interesting job, do not want to share it.
- people with boring jobs are happy with working cuts, but not with income reduction.
- Retiring at a younger age involve a reduction of income.
- Training programs for new jobs.
- Public sector jobs have to be paid from tax revenue.
How do future jobs look like?
-Technology change the way companies perform, organize themselve and compete.
-Computerization affects society, the economy and the workforce.
Effects of computer replacing jobs
Negative effect: on a large scale, it will leave many people without employment and a source of income.
Positive effect: it may give people more time and freedom to pursue work that is more innovative and help the human race move toward the future.