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. The Goal of the Firm In today’s society, how a business operates and how it conducts its organization and affairs is extremely important. Especially, since today’s society is extremely diverse and tends to have its various wants …show more content…
For instance, if the government’s power is dispersed and its involvement in the market is limited, then more freedom is exercised, thus, allowing for the preservation of a free society. Nonetheless, despite Friedman’s belief, today’s government intervenes in the fields of licensing and supplying of social services, as well as, certain monetary matters. Therefore, the government of the 21st century has advanced and become more involved in the market than previous generations. Not to mention, that it has acquired more power and control over the
Business is a very important part of life. It is used in every aspect of everyday life. A business is a group of people put together to produce final goods and services. Businesses fill peoples many wants and desires and they increase the money supply. Without all the businesses and corporations in American, the economy would not stand a chance at surviving. Most of the jobs in American contribute to companies. Without any jobs, the money supply would plummet. There are many different types of business and server sectors of a business. In the world today, businesses are a very important part of society and can be explained with the use of an argumentative and rhetoric analysis many essays in From Inquiry to Academic Writing: A Text and Reader.
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.
The current issues that have been created by the market have trapped our political system in a never-ending cycle that has no solution but remains salient. There is constant argument as to the right way to handle the market, the appropriate regulatory measures, and what steps should be taken to protect those that fail to be competitive in the market. As the ideological spectrum splits on the issue and refuses to come to a meaningful compromise, it gets trapped in the policy cycle and in turn traps the cycle. Other issues fail to be handled as officials drag the market into every issue area and forum as a tool to direct and control the discussion. Charles Lindblom sees this as an issue that any society that allows the market to control government will face from the outset of his work.
Business has been in charge of the upgraded innovation that has generally supplanted the drudgery of most physical work, an outcome in part of the innovativeness of business and its readiness to take and bear the weight of money related hazard. Besides, maybe no establishment in our regular life is more proficient in its operations and more discerning in its association than business. No foundation is more receptive to the requests of its constituents than business.
By assessing these factors businesses are able to adapt to different conditions set by the society they live in. The analysis basically looks at 8 aspects that form core foundations of the business and since these are factors out of business control, strategies need to be implemented in order to ensure the smooth running of the business – Professional academy
The wealth of company grew and dominated the lives of the people consuming them, in their interaction and the uses of the product and services they provide. This kind of sphere and power manifest social and economic problems that ranged and in size, continuously perpetuated society. The government was further challenged to control, regulate and engages business with trade and commerce, encounters problems such as Homelessness, Immigration, Racism and Prejudice, General Works, Intellectual Freedom/Freedom of Speech/Censorship/Privacy, Poverty and Welfare, Violence, just to name a few. As business growth there social responsibilities take form; people, consumer, special interest intuition and society expect a particular behavior from company’s and its members.
This paper will have a detailed discussion on the shareholder theory of Milton Friedman and the stakeholder theory of Edward Freeman. Friedman argued that “neo-classical economic theory suggests that the purpose of the organisations is to make profits in their accountability to themselves and their shareholders and that only by doing so can business contribute to wealth for itself and society at large”. On the other hand, the theory of stakeholder suggests that the managers of an organisation do not only have the duty towards the firm’s shareholders; rather towards the individuals and constituencies who contribute to the company’s wealth, capacity and activities. These individuals or constituencies can be the shareholders, employees, customers, local community and the suppliers (Freeman 1984 pp. 409–421).
Have you ever heard about sociology? What is it? How can sociology affects business? Whether people do business well without sociology? Some articles show that everything takes place in a sociological context, including business. When people manage a company, they manage people including employees and customers and try to meet their needs and wants. It is important for them to know about the groups they are dealing with and how they interact because this helps them manage more effectively.
Organizational structure is one of the three key organizational assets that could contribute to the effectiveness of operations of any organization (Zheng, Yan and Mclean 2009) It is joined together by different flows of information, decision processes, hierarchy of authority, specialization and working materials. (Enz 2009; Mintzberg 1980) Furthermore, it also determines the operating workflow, control of information, decision-making in the organization and the line authority (Mintzberg 1980). The facets of the organizational structure, the relationships that exist within it, and how the business processes (Bititci et al 2011) are controlled, determine the managerial style that should be utilized in addition to the strategies the organization could implement. Going further, a company’s organizational design and the parts that constitute it are seen as a contributing factor to superior performance, which ultimately provide an organization with competitive advantage over its competitors. (Enz 2009; Zheng, Yang, and Mclean 2009)
Friedman, M. (1970). The Social Responsibility of Business is to make Profit. New York Times
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.
Covey & Brown (2001) “the role of business in society has progressed over the years, from being primarily concerned with profit for sharehold¬ers to a stakeholder and community approach with a focus on corporate social responsibility”
The first discussion question posed was, “How does Dr. Friedman characterize discussions on the “social responsibilities of business”? Why (Jennings, 2009, p. 79)? Friedman (1970) characterized the discussions on social responsibilities as one hundred percent unadulterated socialism. Friedman (1970) characterized these discussions in that manner because he felt that a corporate executive should focus solely on making profits and not on social aspects. He mentioned how people who conduct and express themselves in this fashion are positively reinforcing and supporting the actions of individuals that have been weakening the foundational blocks of free society. Friedman (1970) posed a question which was the crux of his 1970 article “The Social Responsibility of Business is to Increase its Profits” where he investigated the true contextual meaning of what responsibilities mean to businesses. Friedman describes how businesses cann...
In order for one to evaluate and identify with the diverse business structures, he/she must be aware of the meaning and standards that makes that structure. Various businesses functions in different ways as the world is full of technology and new structures, company cultures and new ways in which companies are run. In order to fully grasp the concepts of Organizational structure and culture in the movies, I will use the Movie Up in the Air and The Devil Wear Prada movies to analyze a business scenario from them.
...can be an arbiter of business responsibility to society through the application of tax incentives or tax credits. In good corporate governance, the management should be able to meet their social responsibilities, these include making sure that their products are not hazardous to people and to the environment, sharing their profits for the good of the community as a natural person or human being would do, donating to social causes, organizing activities to benefit the community.