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Running Head: LEARNING FROM THE PAST

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Learning From the Past:


Why businesses today should act ethically and socially responsible .

Karina Clark
Salt Lake Community College
Foundations of Business
Business 1050
Professor Roger Lee

August 18, 2014

Running Head: LEARNING FROM THE PAST

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Milton Friedman believes that a business is a private entity, not a person, and it should be
concerned merely with making a profit- not with promoting social propriety. Wikipedia defines
Social Responsibility as an ethical framework which suggests that an entity, be it an
organization or individual, has an obligation to act for the benefit of society at large. Who is
right? Lets take a look into the past to what weve learned.
From Roman times until now, we see that when making money becomes more important
than people, bad things happen. Decades ago, movie called Erin Brochovich documented the
unethical business practices of a business called Pacific Gas and Electric, in Hinkley, California
that was not properly regulated and thought it socially acceptable to run contaminants into the
towns drinking water. They knew of the contamination, and instead of using their money to
clean it up, they used their money to make propaganda pamphlets to give to the townspeople in
an attempt to convince them the water was safe, even good for them. People began dying from
multiple cancers and children were being born with birth defects and disfigurements, if they were
born at all. As people moved away, PG&E bought their land and burned their homes, in an
attempt to hide evidence and keep more people from moving in. In the end, PG&E was ordered
to pay over $333 million in damages and they are still trucking in bottled water for the residents.
They were certainly led by a desire to make the highest amount of profit, no matter the cost to
their employees or future generations of nearby residents. It did not pay off for them. They spent
more money in the long run as a result of their poor and unethical choices. Because some people
still choose profit over the society at large, the need for regulation is very real. Accountability
should be and is required to make sure businesses are acting ethically- because in one office,
unethical behavior might consist of stealing a stapler but in another office, the lack of ethical
behavior could cost people their lives.

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We dont have to search very long to find people who think the business of making
money is more important than the fair treatment of society, but in modern times much has been
done to modify the laws in the workplace. Slavery is no longer allowed, and child labor laws are
now in place to ensure children are not paid unfairly or overworked so they will have enough
time in their schedules to receive a quality education. In the past, both of these groups were
exploited and mistreated. There are many wealthy families today, whose family wealth was
started on the backs of children and African American laborers.
Milton Friedman, in article entitled The Social Responsibility of Business Is to Increase
Its Profits, offers an unapologetic opinion on social responsibility when he declares, The
businesses 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. In fact, they areor would be if they or anyone else took them
seriouslybe preaching pure and unadulterated socialism.
His comments certainly lack empathy for the human condition, but is he wrong? I think
so. If racism were allowed in the workplace, it would create a dangerous and dramatic work
environment, but perhaps the part Friedman would even object to is- that it would diminish
productivity, losing the company money. So, if Friedmans declaration is to be weighed
properly, then we must look at how this kind of socialism has protected profits. Another good
example of this is sexual harassment. When bosses were allowed to chase employees around the
office, perhaps asking them for frivolous tasks, wasting hours in the day, you can bet neither
party was thinking of profits. Then there is Walmart, who is owned by the Walton family.

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According to the documentary Wal-Mart: High Cost of Low Price, each of the top by members
of the Walton family are worth $18.3 BILLION, yet they outsource jobs to sweatshops in China
and Bangladesh, where the conditions are horrible and they work 17 hours a days, 7 days per
week at a horrific .13-.17 per hour, just to save a buck, and they dont even provide good wages
or affordable medical insurance to their American employees. In fact, supervisors are trained to
show Walmart employees how to apply for federally subsidized housing and welfare programs.
When one Walmart regional manager was asked how the employees needs for survival were
going to be met, he responded Let the State do it. If each of the five Walton family members
gave up ten million dollars, the family could provide excellent medical coverage to every
Walmart employee worldwide! Wouldnt it be easier to run things ethically and create a
meaningful legacy? Thats not to say that ethical companies never hit hurtles, but at least their
names would not forever live in infamy.
In contrast, a company called Atlassian is turning heads as an ethical company. It is a
Results Only Work Environment (R.O.W.E.) which is somewhat similar to a Reward Power
environment. Employees are given autonomy, and then just asked to shine and be creative. The
five Atlassian values are Open Company, no bullshit, Build with heart and balance, Dont
#@% the customer, Play, as a team, and Be the change you seek. The perks of working for
Atlassian are:
Health
Medical, dental, vision, and life insurance, gym membership, in-office yoga, bike
amenities, health fairs, and lunchtime sports.
Money
Welcome gift, competitive salaries, equity,
401(k) with match, $10,000 employee referral,
Annual bonuses, and study programs.

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Sustenance
Fully stocked kitchen with breakfast
Fruit, snacks, energy drinks
Coffee, espresso, tea, beer, kombucha on tap
Charity
Get five days off per year to support the cause of your choice, and feel good knowing
your company donates licenses and money to non-profits.
Downtime
Generous vacation time and sick leave
$3000 paid trip after five years of working with them, and travel insurance.
The Office
Dogs, Aeron chairs, sit/stand desks, massage chairs
Xbox, billiards, ping pong, foosball, couches, and bean bags
Growth
Benefit from study programs, training, and development
Dedicate 20% of your normal work time to pet projects
Participate in quarterly Shipit hackathons
Peer Bonuses
Atlassians recognize each others hard work with Kudos gift certificates to
Amazon, City Beer Store, K&L Liquors, Sightglass, iTunes, Whole Foods, Market,
and more.

In my research of Atlassian, I have gained a testimony that they are a socially responsible
company to work for or with. They seem to have a genuine desire to put employees and society
first, understanding that good Karma will come back to them for doing the right thing.
Employees are generally easy to train and easy to replace if they do not follow the rules,
but what if the unethical person is the boss? What if the leader is skimming off the top or
choosing profits over the safety of the employees? In the case of Bernie Madoff, the company
was a complete sham and used all the money from the investors to live an expensive lifestyle, in
some cases draining every penny from his customers & family members life savings. He was

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obviously not an ethical person. This is the kind of thing our children and future business owners
are growing up witnessing. Do we want them thinking this type of behavior is acceptable? No,
because it is not. In many cases, these acts have been against the law but in many cases they
were just widely considered to be wrong. In order to keep order in society, there has to be a code
of ethics to live by. In essence, the U.S. Constitution is a code of ethics. People need guidelines
to live by so they do not run amuck.
In conclusion, we have learned that in order to keep order in our society, there has to be a
code of ethics to live by. In essence, the U.S. Constitution is a code of ethics. Ethics is a personal
choice. It is in ones character. It is the science or morality. Many people did not have a solid
moral foundation in their youth and their character is lacking strength. This is a big reason for
having a mission statement and an ethical code of conduct in the workplace. Going forward, we
need to take a stand against companies like Walmart, who have unethical business practices and
support companies like Atlassian & Google, who invest in their employees and dont let greed
cloud their internal controls. Businesses should act ethically to create fair and safe work
conditions for their employees. Businesses should not take advantage of, deceive, or expose their
customers to dangers or toxins in the name of money. We all have to sleep at night with a clean
conscience and we need to feel safe when we go out into the marketplace. This is why social
responsibility is so important and it is more important than ever.

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Works Cited
(n.d.). Retrieved August 15, 2014, from https://www.atlassian.com/company/careers

Boardman, C., & Sandomir, A. (2013). The Social Responsibility of Business is to Increase Its Profits.
In Foundations of business thought (First ed., pp. 221-225). Boston: Pearson.

Hinkley groundwater contamination. (2014, November 2). In Wikipedia, The Free Encyclopedia. Retrieved
22:31, November 22, from
2014, http://en.wikipedia.org/w/index.php?title=Hinkley_groundwater_contamination&oldid=632156993

Wal-Mart: High Cost of Low Price [Documentary]. (2005). United States: Disinformation Co.

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