Abstract:

The purpose of this study is to assess the arguments between

stakeholder theory and shareholder theory. The two sides of the social
argument are stakeholder theory by Edward Freeman that businesses have
moral obligations or social responsibilities as opposed by the shareholder
theory of Martin Friedman that there are no any social responsibilities or
moral obligations to fulfill other than maximizing their own profit. Advocates
of stakeholder theory believe in providing for societys flexible expectations
or desires of society. On the other hand, proponents of shareholder theory
look after that organizations ought to just comply with the law and maximize
shareholders wealth. Despite the fact that social responsibility is eagerly
upheld by numerous social progressives, it is not a cure for society's
troubles. The conclusion of this study is that organizations have to to
concentrate on legitimately maximizing shareholders wealth in view of
ethical standards.

Body:
The article provides us with a theoretical knowledge if there are moral
obligations or social responsibilities the businesses has in their environment
and communities they operate in and to what extent.
The central concept or theme of the article is to provide and discuss
the arguments of the two philosophers regarding their claim in the viewpoint
of their stated theories that each has their own arguments to overthrow each
others premises and the authors perspective or standpoint of each of the
philosophers case and be able to send across their individual ideas to the
readers.
The purpose of the author in writing this article is to clearly state each
of the philosophers claim on their arguments in a more vivid and simplified
way of understanding it in order for the reader to have a better perception as
to what the philosophers are trying to insinuate and the author had to write
words in an all upper case letter manner just to highlight his points and
important details of the article that needs to be considered and taken
account into.
The author of the article established the discussion to grasp the
attention of the readers by having a strong statement of definitions of each
philosophers

theories,

Friedman

and

Freeman.

Then

the

author

characterizes in question on what social responsibilities means for the

business and on what the business can do to the environment and
communities they are situated in. The author also pointed out that a
business clear goal is to profit and cited some theories and models to back
up its arguments to adopt the shareholders theory other than of the
stakeholders theory.

The author specified strongly that a business that does not profit will
not be a business for very long time meaning it will soon go out of business
and file bankruptcy. Thus a company or a business that wasnt able to utilize
and gain profit while operating will surely drop the bomb on them.
Furthermore the author also stated that business acting purely out of
self-interest will end up promoting the overall well-being of the community
around them. This thesis is known as invisible hand argument that for
instance a business with a self-interested reasons not to harm others, since a
business which mishandle

its employees or is rude to customers and or

sells them harmful or defective products and services most likely to fail.
Conclusion:
The article was well presented by the author in a manner that the
ideas and statements were easily defined and grouped accordingly in order
for the readers the instantly seize the information the author wanted to
criticize and pointed out. The information cited in this article was of
importance to me because as a marketing student I should know the
roundabouts of the business in order to fully understand it.
The information provided by the author can be useful in a practical way
for a lot of businesses to formulate its business and marketing strategy in
order for them to stay and continue operating within their respective areas.
As for the major premise and points of the article presented I do agree that
the goal of a business is to gain profit thus playing by the rules and by not
harming anyone while operating and engages in an open and free
competition without deception or fraud.
In order to understand and somewhat have an idea of what an
entrepreneur thinks of this article. I asked Mrs. Marilou Celeste to read this

article as well and give his feedback. She was able to make a statement that
as long as she operates his business in accordance to law and does not harm
anyone or his environment shes operating in and having good relationship
with her employees then she can be proud of to state that she is also socially
responsible, take into account that shes successfully operating her business
for 20yrs already as of now. Thus shes also a member of a Club called The
Lions Club which is known internationally that conducts programs to help
the government address its current problems and concerns in their areas like
tree planting for instance and giving relief goods to the victims of natural
disasters.
I for one also agree to what Ms. Celestes statement and as well as the
major points in this article that it made me consider to operate a business as
well in accordance to law.
Overall Assessment:
The article was able to send the messages it wants to reader to gain. It
was written in a way that a person could easily grasp the ideas and
information. The article clearly differentiated the two philosophers theory
from each other and the author clearly stated its objection as well to each
theory with simplified explanation and with substantial information to back it
up. And for whether to choose on which theory did appeal to me is the
shareholders theory. Thus having to maximize the gain of profit as the main
obligation of a business and having to act purely on self interest does not
necessarily means that theres no moral obligation there as I also believe
that we does things this world primarily for our self interest to live and
sustain our lives and the future generations of our families that as of my
opinion.