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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 …show more content…
He has a theory that if an executive of a corporation has “Social Responsibility” in a way, that responsibility influences him to act against the good of his employer (which Friedman states is to make profit). Friedman goes on about an executives’ responsibilities, and how one of them is to satisfy the wants of their stockholders, which includes maximizing profits for these …show more content…
However, I do not believe that a corporation abiding to Social Responsibility in any way shape or form is bad, and that they shouldn’t do it. I do understand and respect the fact that stockholders invest in a corporation for the main purpose of making more money, and that the issue of spending stockholder’s money on things that don’t directly generate profit can get a little dicey. But I believe this falls somewhere along the lines of the saying “You got to spend money to make money”, claiming that whatever Social Responsibility contribution made by the corporation is with the corporation’s benefit in mind, and who’s to decide that might you ask? Thomas Mulligan states that “if socially responsible action is on the corporate executive’s agenda, then it is there because the company’s mission, objectives, and goals developed by the major stakeholders gave him license to put it there and provided parameters for his program” not exactly the clearest statement, but essentially what he is trying to day is that that executive is elected into his position by the stockholders, and if social responsibility falls into his job description that he has the knowledge, and authority to make these types of
Social responsibility is the ethical foundation and guiding principles we are to live by. This trickles down from organizations, to the individual level. It’s the duty of everyone to help in need. By doing so, helps keep the balance in our society as well as our ecosystem.
Milton Friedman’s view is that in a capitalist economy, there is one and only one responsibility of business: to use its resources and engage in activities designed to increase its profits. Business does not have a social responsibility to promote desirable social ends. A corporation is an artificial person. The corporate executive is the agent of the individuals who own the business and their main responsibility is to them. The directors of companies have a fiduciary responsibility to act in the best interest of the shareholders. The managers are agents of the shareholders and therefore have a moral obligation to manage the firm in the interest of the shareholders, which obviously is to make as much money as possible and maximize shareholder wealth. The shareholders are the owners of the organization and therefore the profits belong to them. In conclusion, Friedman believes that business is to maximize profits. He suggested a healthy corporation has to be not only ethically good, but also being economically good. Overall, as he stated in the article, business must gain profit without break the rules of game (D. Murphy, Class Lecture, January 17, 2014)
To supply the wants and needs of a consumer, society entrusts wealth-producing resources to the business enterprise.” (Santayana, George. Is The Tyranny Of Shareholder Value Finally Ending? So before we go into greater detail on the different perspectives related to social responsibility, one might question the meaning of social responsibility. It is generally agreed that social responsibility is defined as the business obligation to make decisions that benefit society.... ...
According with the textbook and other internet sources, Milton Friedman described in his thesis that the main goal of a business is to generate gains or profits. As a result, several business have been using such thesis as a justification for some of the decisions they made. In the case of “A Civil Action” we had the two companies contaminating the little town water with chemicals used during the elaboration of their products. The use of trichloroethylene was apparently causing some of the children of the place to developed respiratory and other cancerous diseases such as leukemia. After the death of several children, people on town began to worry about the situation and everything pointed out ...
Every business has a social responsibility toward society. That means to maximize positive affects and minimize negative affects on the society. Social responsibilities includes economic-to produce goods and services, that society needs at the price, that satisfy both-business and consumers, legal responsibility-laws that business must obey, ethical responsibilities-behaviors and activities that are expected of business by society, but are not codified in the law, philanthropic responsibilities-represent the company’s desire to give back to society (charietys, volunteering, sponsoring).
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.
The arguments for and against corporate social responsibility have captured two points of view. Those who believe that organizations should not be concerned about social responsibility base many of their arguments on the costs involved and whether organizations should shoulder those costs on behalf of society. And those who are in favor feel that organizations benefit from society and, therefore, have an obligation to improve it. Although there is no universal agreement, surveys and other reports express that many organizations are, becoming increasingly active in addressing social
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...
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.
Masaka, D (2008) Why forcing corporate social responsibility is morally questionable, Electronic Journal of Business ethics and organizational studies, 13, 1 pp. 13-21
Corporate Social Responsibility is management’s obligation to protect and promote their stakeholders welfare. Social Responsibility is more than just obvious ethical issues like honesty and integrity in business dealings.
While the concept of an individual having responsibility is commonly recognized, modern views have lead to the emerging issue of corporate responsibility. Business Directory.com defines corporate social responsibility as, “A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.” But such a concept has been much disputed since at least the 1970’s.
However, there can be more definitions about what Corporate Social Responsibility can be. For example, Corporate Social Responsibility can be the commitment which is continuing for a business to behave ethically and bring to economy the development to improve the workforces’ of the whole society and local community and their families’ quality of life. Corporate Social Responsibility is also known as the obligation of a company to serve the society’s interest and of course its own. With the help of the Corporate and Social Responsibility, social and environmental concerns companies can integrate into their business and stakeholders operations.
Corporations that place an importance on corporate social responsibility usually have an easier experience when dealing with politicians and government regulators. In compare, businesses that present an irresponsible disregard for social responsibility tend to find themselves fending off various reviews and probes, often brought on at the assertion of public service organizations. The more positive the public insight is that a corporation takes social responsibility seriously; the less likely it is that innovative groups will launch public campaigns and claim government inquiries against it.