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Social responsibility of business essay summary
Concept of corporate social responsi
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Do Businesses have a responsibility to be charitable?
Phillip Truax
10985444
I will argue that businesses do not have a responsibility to be charitable and reach social ends. Milton Friedman argued for a stronger protection of economic rights in order for industrial as well as commercial growth to take place. Milton Friedman also argued that corporations have no responsibility to keep the environment clean, end unemployment, etc. Businesses have one responsibility: to maximize profits. I believe Milton Friedman is right in saying that in order for corporations to be successful they must maximize their profits, their first priority is not to make ends meet within society. If their priorities are not in line, the business may shut down. (Friedman 1970, 593) As stated in the thesis statement above, a business’s number one priority should be to maximize profits without cutting corners. Unless you are dealing with a corporation such as a hospital or a not-for-profit. I am very familiar with this argument because I have witnessed my parents run a pallet business
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A corporation is an artificial person and in this sense may have artificial responsibilities, but business as a whole cannot be said to have responsibilities. The first step toward clarity in examining the doctrine of the social responsibility of business is to ask precisely what it implies for whom.” (Friedman 1970, 593) This quote is relevant to this argument because a business is not a person, it has no ethics nor morals. Therefore it is impossible for a business to take action towards the responsibilities others bestowed upon it. Implying that a corporation has responsibilities to society is wrong, implying that the people who run this corporation is a different story. The corporate executives who run these corporations have many different responsibilities whether they be to their families, their communities, their friends, etc. (Friedman 1970,
“There is only one and only one social responsibility of business- to use its resources and engage in activities designated to increase its profits so long as it decides to stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
One such statement is; Businesses are asked not only to produce goods and services, but to become greater social assets as institutions. He brings up the difficulty of businesses following the rules making the government treat corporations like crime organizations. And that in general the people hate big business. But in the end the business should do the right
In this essay we take a look at the famous Milton Friedman's essay "The Social Responsibility of Business is to Increase Profit ". The following paper is an attempt to critically evaluate the article in consideration of Freeman Stakeholder Theory. 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 a 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 a business is to increase profit). We probably all agree that the primary objective of any business is to achieve revenue and attain a certain profit.
...ty. Ignoring this obligation can be bad to a business no matter how you look at it. The business becomes valuable when it can uphold social responsibilities while at the same time maximizing profits. Man made the business, business did not make the man, therefore we must rule and reign over it responsibly.
The only legal responsibility of a corporation is to maximize their profits for stockholders and a deviation towards social good is considered to be additional cost of doing business (Robbins, DeCenzo, Coulter, & Anderson, 2014, p. 110). Hence, I am of the opinion that the socio-economic view should be the business direction of
Friedman, M. (1970). The Social Responsibility of Business is to make Profit. New York Times
The Business Mindset “The Social Responsibility of Business is to Increase its Profits” - Milton Friedman. Milton Friedman, an American economist and statistician, is revered as one of the greatest business minds. Friedman has been described as "the most influential economist of the second half of the 20th century ... possibly of all of it. (Economist, The legacy of Milton Friedman, a giant among economists, 2006) The infamous quote, which appeared in a 1970 New York Times Magazine, is the centerpiece of many business class debates.
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.
As human begins, we do not want to see unjust or unethical actions taken upon other’s, or ourselves, especially by business’s we contribute too. However, we need to understand that the business’s, or employee’s, first concern is not social responsibility. If a business is making profit, in a lawful manner, it is already contributing to its consumers and its society. Friedman states in his book Capitalism and Freedom, “in a free society, and have said that in such a society, ‘there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.’” (Friedman, pg 6). Meanwhile, Mintzberg argues that there has a to be a balance between the greed and helping one another. “The point is not that concern for other’s is suddenly going to replace self-interest, but that there has to be a balance between the two.” (Mintzberg, pg 67). I don’t believe there could be an equal balance because the business is already contributing to the society, if they stay within the law. Mintzberg tries to put all the blame on the business’s by stating they are greedy, and are always wanting more money, but what if it is the other way around. Maybe the case is that us, as a society, are greedy and are always expecting more from these business’s, believing they should give back to the
In the business field, our ethical responsibilities are to make sure that our behaviors don't cause unjustified harm, suffering, waste or destruction to us, and the world around us. Same concept in all other aspects. Positive economic activity is one responsibility we all have in society at large because it creates wealth and paths for others to live a better quality life and take that step away from
Friedman, M., (2007). The Social Responsibility of Business Is to Increase Its Profits. In W.
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.
It seems obvious that large corporations have a tendency to ignore the negative effects of their actions in favor of profit. This example, although sensationalized, still says to me that with power comes responsibility. It affirmed my belief that a corporation’s goal cannot be just to provide profit to shareholders, but there must also be an element of social responsibility.
It is a moral duty of company to serve society. As an organization depend upon society to accept the output produced. The resources used in production of result of a firm belong to society. Hence an enterprise cannot neglect
Campbell (2007) is representative of a group of studies that create testable propositions related to the conditions under which organizations will move towards Cooperate Social Responsibility. Companies who do not fulfill their social responsibilities will lose a source of profit creation and vitality, and even lead to companies unable to operate normally or bankruptcy. Enterprises that fulfill their social responsibilities for the community will help enterprises to obtain a stable, long-term even more profit (Lübcke et al., 2007).Therefore, the basic goals of companies should not only be to maximize economic benefits, it should also be to create as many social benefits, including tax laws, conserve resources, protect the environment and provide employment opportunities to safeguard the legitimate rights and interests of employees Corporate Social Responsibilities are the “societal expectations of corporate behavior; a behavior that is alleged by a stakeholder to be expected by society or morally required and is therefore justifiably demanded of business” (Whetten et al., 2002). Hayek (1939) also considered much higher rate of profit would be obtainable on money spent on labour than on money invested in machinery.