Niall Fitzgerald, stated, “Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business.” (as cited in Elliot, 2003, para. 14) What is social responsibility? Peter F. Drucker (1981) suggests it is today’s business ethics as defined by society’s ever-changing values, values based on people functioning as a group. Milton Friedman’s (1970) view of social responsibilities is one of individual ethics. Both Drucker and Friedman interchangeably use these terms; ethics and social responsibility, in their case views on the subject. Business ethics and social responsibility are like fraternal twins, born from a womb of moral imperatives and as such, share a base genetic foot-stamp in scope and ideology. In the case views as presented by Peter F. Drucker and Milton Friedman, what ethics and social responsibility is varies between an individual and business view.
Friedman (1970) is very clear on the line between individual ethics and business. An individual acts in his own right based upon his personal morality code. He takes on responsibilities unique to him in a singular fashion such as marriage. A business, however, is a collective of reasoning from group thought defined by social convention. It is soulless as societal pressures dictate the ethical code. Individual responsibilities however, are self-assign because he adopts his own code of ethics and consequences. When the individual is working as an executive, he is required to balance the needs of the stockholders and the owners of the business all the while producing profit. His individual ethical leanings, either consensual or conflicted, are su...
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Elliot, L. (2003, July 4). Cleaning agentInterview Niall FitzGerald co-chairman and chief executive Unilever. theguardian. Retrieved from http://www.guardian.co.uk/business/2003/jul/05/unilever1?INTCMP=SRCH
Friedman, M. (1970, September 13). The Social Responsibility Of Business is to increase its profits. The New York Times. Retrieved from http://select.nytimes.com/gst/abstract.html?res=F10F11FB3E5810718EDDAA0994D1405B808BF1D3&scp=2&sq=The%20Social%20Responsibility%20of%20Business%20is%20to%20Increase%20its%20Profits&st=cse
Josephson Institute Quotations Bank. (n.d.). Retrieved from http://josephsoninstitute.org/quotes/quotations.php?q=Education
Mackey, J. (2005, October). Rethinking the social responsibility of business. reason.com. Retrieved from http://reason.com/archives/2005/10/01/rethinking-the-social-responsi/3
Perhaps Friedman’s most prevalent justification for dismissing social responsibility from business arises from his view on ethical spending. He believed that it was unethical for businessmen to spend other people’s (shareholders) money on other people (i.e. the community), and that transactions of such a nature should be left to government and corporate social responsibility programs. This line of thinking reinforced what is known today as the shareholder primacy model, whereby the primary moral duty of any corporation is to serve the shareholder’s interests, subject to some moral minimum (Smith, 2003). Friedman held that it was the shareholders money being spent, not the corporation 's, as corporations were merely fictional entities. Numerous
In today’s global society, a Code of Ethics policy is used to label established, acceptable behaviors among that industry’s business associates, potential investors, and the corporation’s executive officers and employees, and most important, the consumer (Ethics Resource Center, 2003). In an attempt to promote an increased efficiency and productivity potential level, among employees and prospective clients, a corporation’s standard Code of Ethics should guide its members toward a more in-depth examination of their personal moral activity, and how these actions affect the people or acquaintances they encounter. A company should utilize this strategy as a model for the professional behaviors and responsibilities of its constituents, and proves the occupational advancement of that business. Ethics are important in every level of a corporation, but specifically in the day-to-day actions of its members, and the image the company broadcasts to its associates is fundamental in building a stable business foundation. These pledges are a vital communication tool used to covey the firm’s standards for business operations, and predominantly, its relationships with the surrounding communities (Ethics Resource Center, 2003).
The earliest impressions that the book makes on the mind of the reader is that “Corporate Social Responsibility” is not just about some kind of vague theories but supports all that it preaches with practical applications. Labelling the book as “a Bible for today’s corporate citizen”- as the publisher does on the flap of the book- may be stretching it a bit too far, but “Corporate Social Responsibility”, does provide thoughtful answers to a number of vital questions on how a corporation could do most good for itself and its
Friedman, M., (2007). The Social Responsibility of Business Is to Increase Its Profits. In W.
Social Responsibility is a term that is often used, and misused in the business world. The term is defined as; “The obligation of an organization’s management towards the welfare and interests of the society in which it operates” which doesn’t exactly touch on all aspects of Social Responsibility. Milton Friedman touches on some more points, but not exactly in a way which agrees with the previously stated definition. Milton Friedman was a Nobel Prize winning American Economist originally from Brooklyn, NY. Friedman is well known for and essay he wrote in the 1970’s on his take on Social Responsibility. Firedman’s essay is based upon his thought that Social Responsibility can, and should be used by businesses in order to generate profit, he
Friedman, Milton. “The Social Responsibility of Business Is to Increase Its Profits.” From The New York Times Magazine, September 13, 1970. Rpt. in Open Questions: Reading for Critical Thinking and Writing. Eds. Chris Anderson and Lex Runaman. Boston: Bedford / St. Martin’s, 2005. 518-525. Print.
Today’s 21st century has brought forth many changes, both positive and negative, as well as, an extremely diverse society whose different needs and wants must be met. Therefore, in an attempt to sustain a balance and comprehend today’s challenges, society as well as, businesses tend to adopt and incorporate certain methods, systems, and theories. As a matter of fact, in the past, the Milton Friedman’s theory of corporate social responsibility was adopted and very influential (Friedman, 1962). The Milton Friedman’s theory stated that the obligation of a business was to maximize its profits, and that business executives had a responsibility to their shareholders rather than to the greater good of society (Friedman, 1962). However, since things and people have evolved throughout the years, the perception of Milton Friedman’s theory has been impacted. Therefore, in this paper, one will further discuss the Milton Friedman Goal of the Firm, its relevancy as it applies to apprehending the purpose of a business in society, and whether or not the government or society portrays a role in expanding the Friedman discussion.
Friedman, M. (1970). The Social Responsibility of Business is to make Profit. New York Times
Friedman’s views are that business’ main responsibility is to maximize shareholders wealth and that in doing so, they are being socially responsible. He also contends that corporations are not people and therefore they cannot be responsible for social issues.
The article “The Social Responsibility of Business is to Increase its Profits” is written by a famous economist Milton Friedman. Friedman in this article implies that shareholders are the main drivers of the corporations and he believes that it is to them corporations must be socially responsible to. The goal of any corporation is to maximize profits and return the portion of these profits to shareholders for investing in the corporation. The shareholders can themselves decide which social causes to take part in rather than assigning a corporate executive to decide on their behalf. Friedman argues that a corporation must have no social responsibility to society because its only concern is the increase profits for itself and its shareholders.
First thing let us start with a little overview of what Milton Friedman exposed in his article. It seems that the whole point of his essay revolves around one basic statement which clearly says that the only social responsibility of business is to use its resources and engage in activities designed to increase its profits so long it stays within the rules of the game (Milton Friedman, the social responsibility of business is to increase profit).
When the problem became serious two main views formed: the “narrow” view and the “broader” view, based on different ideas. The “narrow” view is based on the proposition that corporations have no social responsibility and they have only one main purpose, to make a profit (Friedman, 1970). So corporations should remain socially independent and all conflicts must be solved through the individual responsibility concept. On the contrary the “broader” view states that corporations have social obligations as all existing participants of market, persons and entities are tied together and are mutually dependent. So corporations cannot ignore some serious events or problems, which take place, and must help society, as profit is not their single purpose.
Berenbeim, R. E. (2006, May 12). Business Ethics and Corporate Social Responsibility. Vital Speeches of the Day, pp. 501-504.
Friedman, M. “A Friedman Doctrine – The Social Responsibility of Business is to increase Its Profits”, The New York Times Publications, September 13, 1970
Business ethics and social responsibility are two concepts many individuals believe go along together for corporations in the business environment. Business ethics are the moral values a company uses to ensure all employees action in a standard manner when completing business functions. Social responsibility is typically a conceptual theory that governments and the general public hold, believing that businesses should not conduct themselves in a manner counter to cultural or societal norms. The connubial of these concepts happens when companies introduce a written code of ethics to demonstrate that the company only acts in its greatest interest so long as it does not damage the company’s social responsibility.