1. Corporate social responsibility is defined in Chapter 5 as the corporate duty to create wealth by using means that avoid harm to, protect, or enhance societal assets. Did GE in the Welch era fulfill this duty? Could it have done better? What should it have done?
I believe that Welch only fulfilled one portion of his corporate social responsibility duty. Financial results for GE show that Welch was very effective in directing a highly profitable company, but he did so at the expense of many of the employees of the business. Over the years, employees were assigned a ranking system comprised of 1’s, 2’s, and 3’s. Each year, the bottom ten percent of workers (ranked 3’s) were relieved of their duties at the company. In a few
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Many times, GE had practices that were questioned by judicial officials. The company was fined many times for pollution violations, accused of consumer fraud and false advertisement, and also fined for unfair debt collection practices and for overcharging on defense contracts. Because of these transgressions, I think GE strays from Friedman’s view because there was enough evidence to support that consumers suffered from deliberate law breaking on the part of the business. Welch seemed to be almost obsessed with profitability, and I think he would have done anything (whether it was legal or otherwise) to ensure that GE maintained its position in the market. The deception and fraud that seemed to be present during Welch’s control would suggest that instead of worrying about the people that the business effects, Welch is only focused on increasing profits at any cost to the employees.
3. How well did GE comply with the “General Principles of Corporate Social Responsibility” set forth in the section of that title in the chapter?
The General Principles of Corporate Social Responsibility are a useful set of standards that can be used to evaluate a company’s corporate social responsibility. The first principle, corporations are run for profit, was a very important principle that set the tone for GE’s performance under Welch. The needs of the stakeholder of the business were