Would corporate executives really be doing the right thing

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Reference no: EM133282999

Question: Milton Friedman provides a Libertarian argument for shareholder primacy: the doctrine that managers should run a company in a way that maximizes shareholder value. What, on Friedman's view, is the basis for managerial obligations to shareholders? I.e., if I am a manager, why should I work in the interests of stockholders as opposed to employees or bondholders or citizens of the United States? According to Friedman, when a corporate executive acts to promote social objectives she is illegitimately coercing or deceiving the stockholders of the corporation.

Why does he say this? Evaluate this argument: would corporate executives really be doing the right thing if they were to pursue profit and the ultimate effect would be to harm the prospective well-being of others? (Stone's criticism is relevant here.) Why or why not?

Reference no: EM133282999

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