Final answer:
The debate centers on whether businesses in a capitalist system should focus solely on shareholder profits or also consider the impact on all stakeholders. Historical changes and regulations highlight a shift towards recognizing the importance of balancing interests beyond profits. The stakeholder concept suggests that corporations have moral responsibilities to various parties affected by their actions.
Step-by-step explanation:
Within the capitalist system, the debate over whether businesses should prioritize shareholders solely or consider the broader impact on all stakeholders is a contentious one. Proponents of shareholder primacy argue from a deontological standpoint, prioritizing the duty to shareholders who have a financial stake in the corporation. Conversely, stakeholder theory posits that businesses have moral responsibilities to balance the interests of all parties affected by their operations, including employees, customers, and the community.
Historical instances show that solely focusing on shareholder interests can often be at odds with social welfare, leading to inadequate workplace conditions as seen during the Industrial Revolution. However, over time, there has been a shift towards recognizing corporate responsibility beyond profit, exemplified by regulations such as those imposed by OSHA. Milton Friedman's perspective emphasizes the right of shareholders to maximum returns, but this view is increasingly being challenged by concerns over income inequality and corporate influence on political systems.
The question of whether attending to broader social issues falls within a corporation's mandate is complex and multifaceted. The rise of corporate social responsibility and the need for ethical business practices suggest that stakeholder interests are important when considering the role of a business within society.