This is According Theory Question

Question 1

In this question you will need to think about the responsibility of business in terms of their accountability for actions undertaken and toward those for whom business are accountable. We have thought about two extremes - Milton Friedman who argued that the responsibility of business was to the shareholder as the owner(s) of the organisation, and this responsibility was to make the maximum profit while operating within the law and maintaining ethical standards. On the other hand, R Edward Freeman argued that a firm had responsibility to all stakeholders of the organisation to ensure the business acted in accountable ways and was able to show that this responsibility was addressed by informing all stakeholders.

R Edward Freeman - Stakeholder Conceptualisation of the Modern Corporation

I can revitalize the concept of managerial capitalism by replacing the notion that managers have a duty to shareholders with the concept that managers bear a fiduciary relationship to stakeholders. Stakeholders are those groups who have a stake in or claim on the firm. Specifically, I include suppliers, customers, employees, stockholders, and the local community, as well as management in its role as agent for these groups. The crux of my argument is that we must reconceptualise the firm around the following question: For whose benefit and at whose expense should the firm be managed? I shall set forth such a reconceptualization in the form of a stakeholder theory of the firm. I shall then critically examine the stakeholder view and its implication for the future of the capitalist system.

Milton Friedman - "Social Responsibilities of Business in a Free-Enterprise System,"

The businessmen who believe that they are defending free enterprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades. ...A corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. The executive is an agent serving the interests of his principal. This justification disappears when the corporate executive imposes taxes and spends the proceeds for "social" purposes. He becomes in effect a public employee, a civil servant, even though he remains in name an employee of a private enterprise.

In thinking about these two views, and the implications of this consider the following questions:

• What is meant by the term accountability?
• To whom would R Edward Freeman, and Milton Friedman believe a firm is accountable? Can both claim to be conducting business activities in an ethical way? Discuss.
• Discusspossibletheoreticalapproachesthatwouldbeappropriatetoutiliseinassessingeachviewpoint.Besuretojustifyyourcomments.

Please give best answer of at least3-4 pages