Making it Stick | Why has the increased attention to corporate scandals proven to be something of a mixed blessing?

Why has the increased attention to corporate scandals proven to be something of a mixed blessing?

On the one hand, the average investor can be forgiven for thinking that the business world is full of crooks whose only purpose is to make as much money as possible. Problems with product quality, poor customer service, and fraudulent financial reports with no admission of guilt paint a very negative picture. The response to this negative picture has been the creation of new rules and tighter controls that now represent a greater risk for organizations who fail to comply with the expected standard of behavior. On the other hand, ethics has become an issue that also positively impacts the business world. This sense of value results in increased commitment and reduced turnover, which means greater profits for the company.



Source: Ghillyer_Business Ethics A Real World Approach 2e

CSR | Corporate Social Responsibility – Instrumental approach

Instrumental approach






















































Instrumental approach is the perspective that the only obligation of a corporation is to maximize profits for its shareholders in providing goods and services that meet the needs of its customers.


Most famous advocate of this “classic” model is the Nobel Prize-winning economist Milton Friedman. 


Friedman argues it would be unethical for a corporation to do anything other than deliver the profits for which its investors have entrusted it with their funds in the purchase of shares in the corporation.


Friedman also argues that, as an employee of the corporation, the manager has an ethical obligation to fulfill his role in delivering on the expectations of his employers.


Source: Ghillyer_Business Ethics A Real World Approach 2e