Question

Cadmium Technologies Inc. believes that the sole purpose of its existence is to maximize profits for its stockholders. The firm has often been criticized for not engaging in any social investments. However, the firm has been appreciated for abiding by the laws while earning profits.
According to this information, which of the following approaches to ethics is most likely being adopted by Cadmium Technologies?

A. Friedman doctrine
B. Utilitarianism
C. Kantian ethics
D. Sullivan's principles
E. Naive immoralist

Answer 1

Answer: Friedman doctrine

Explanation:

The Friedman Doctrine, also called the Shareholder Theory, is a theory which states that the main responsibility of a firm goes to its shareholders. The theory views the shareholders as the vital economic engine of organizations and the group to which firms are socially responsible to. The theory believes that the aim of the firm is to maximize profits to the shareholders.

The firm is responsible to the shareholders and the shareholders can then decide what social initiative they want to take part in. It is not the function of the firm to decide for them as they are there for business purposes alone.