Premium Essay

“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

In: Business and Management

Submitted By Helena0201
Words 517
Pages 3
This statement illustrates the social responsibility of business and the corporate social responsibility of the business. According to Friedman, the social responsibility only is to make the profit. “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (Baker, 2015). I do not agree with this statement under the stakeholder theory, I will explain the reason relate to the stakeholder theory.
Explain this statement
In this statement, “There is one and only one social responsibility of the business to increase the profit” In this sentence, we can see that the only social responsibility is to make the profit, whenever do the untrue things for personal gain. For example, to stolen competitor’s product to make the product. “The rules of the game, which is to say, engages in open and free competition without deception or fraud”. These rules is about side-constraints of the business, the company need to follow the rules, and they not be deception or fraud to become the free competition.
Analysis of this statement
By definition, stakeholder are the individual or groups that have an interest in the organization and are affected by its action. Actually, A corporation have can have legal, but also moral responsibility. “If the business wants to be sustained over time, must maximize its profit but do so in a manner that meets the needs of the stakeholder that allow it to remain viable” (John, 2013). When the needs changes, the business have the responsibility to change their rules. The rule of games are important, they create the side-constraints that business must act within. In fact, these side constraints are the rule that business must follow when they…...

Similar Documents

Premium Essay

Corporate Social Responsibilty

...What is Corporate Social Responsibility – Do We Need It? And Why? On 2011/05/20 · Leave a Comment In the next series of four articles I plan to explore the idea of “corporate social responsibility” (CSR). In the first one today, I shall discuss the shareholder view of CSR using Milton Friedman’s perspective as my main thesis. In the second article next week, I will explore the stakeholder view of CSR using Peter Drucker’s argument to initiate an alternate set of core ideas. In the third article, I shall take an important long detour to consider economic underdevelopment in the Middle East to highlight what happens to politics and society when the development of the corporation is impeded. In the fourth article, I reconsider the role of CSR in today’s world. The idea of CSR is to urge corporations to embrace not just the interests of shareholders, but also the interests of multiple stakeholders in the conduct of its activities. These stakeholders often include employees, suppliers, customers, and the local community in which the corporation conducts its business. CSR is a relatively new term although the idea that business has social and moral responsibilities beyond maximizing profit is much older. The term has only gained common currency since the late 1960s and the early 1970s, when the global reach of multinational corporations expanded as international trade and investment flows grew. Since then public debate over the role of business in society has been most vociferous......

Words: 2765 - Pages: 12

Premium Essay

Corporate Social Responsibility

... “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 stay, engages in open and free competition without deception or fraud” (Friedman, 1970). As one of the most influential economic scientist in the 20th century, Milton Friedman did this statement 41 years ago. In the last three decades the world economy went through a large change. Affected by the crisis of the industrial capitalism in the 1970s, the currency crisis in the 1980s or the financial crisis in 2007, business needed to readjust itself every time it reaches its limit. Especially concerning the collapse of the real estate and financial bubble in 2007, a re-orientation for organizations to concentrate on long-term performance instead of inconsiderately accumulating capital was and is required. “Adopting business strategies that meet the needs of the enterprise and its stakeholders today while sustaining the resources, both human and natural that will be needed in the future” (KPMG, 2011). Those strategies to fulfill sustainable criteria are the elements of Corporate Social Responsibility. But as Friedman mentioned, the goal of an organization is to increase its profits. Could this be a win-win-situation for organizations and the environment? Or is the assumption correct, that this obvious contrast could only satisfy one party? If so, wouldn’t be the use of CSR be......

Words: 2398 - Pages: 10

Premium Essay

Engage to Responsible Business in-class writing submission in week 2 tutorial about my understanding of the need of engage in responsible commerce, it is just a superficial discussion. At that time I did not thinking about this topic systematically. In that article, I only talk about the importance of responsible commerce like how necessary of responsible commerce and what consequences it can be brought if there is not responsible commerce. To my mind, ‘responsible commerce’ refers to the corporation preventing and solving long term issues to maximize the benefits of the shareholders and stakeholders which compliance with the spirit of the law, ethical standards and international norms. But during the study of COMM101, I found that the principles of responsible commerce are really important for the development of our society, both in economic and culture areas. With the development of globalization, the competition among industries becomes more and more fierce. How to earn more profits with much lower operational cost has become every company's concern and pursuit. Unfortunately, in order to reach their profitable goal, many companies adopt illegal and immoral methods to conquer the market and maintain their market share. However, their improper market behavior is devastating to both the market and the enterprises themselves. On the one hand, their immoral market activity may break the market rules and regulation, which in turn disrupt the normal running of this industry and threaten the operation of......

Words: 1971 - Pages: 8

Premium Essay

Social Responsibility of a Business Is to Increase Profits

...The Social Responsibility of Business is to Increase Profit What is the social responsibility of a business? Is it to increase profits as American economist Milton Friedman argues? Is it to make decisions that benefit and protect society? According to the Dictionary of Finance and Investment Terms, social responsibility is the “principle that businesses should actively contribute to the welfare of society and not only maximise profits”. In my view the statement ‘the social responsibility of business is to increase profit’ is true to an extent, however, I believe a corporation’s responsibilities extend beyond just maximising profits. The ‘Narrow View’ argues that profit maximisation is the only objective for a business. Theodore Levitt wrote, “in the end business has only two responsibilities- to obey the elementary canons of face-to-face civility (honesty, good faith and so on) and to seek material gain” Levitt’s opinion could be perceived as realistic to an extent, however, I believe he doesn’t take into account the negative side-effects that business activities can have on society. Friedman strongly rejects any concept of corporate social responsibility that would deter a business’s primary goal of profit maximisation. Furthermore, he argues that only people can have responsibilities, not an artificial being such as a corporation. If an artificial being such as a business was to have responsibilities, however, than I would find it appropriate that it would be inclined......

Words: 759 - Pages: 4

Premium Essay

The Social Responsibility of Business:

...The Social Responsibility of Business: A Review. Maz Demosthenous School of Commerce The Flinders University of South Australia GPO Box 2100 Adelaide South Australia 5001 Telephone: +61 8 82013896 Facsimile: +61 8 82012644 Email: SCHOOL OF COMMERCE RESEARCH PAPER SERIES: 00-8 ISSN: 1441-3906 For many, the view that the main goal or purpose of business is to make as much money as possible is accepted as a matter of fact and is beyond debate. To go further and say that the social responsibility of a business is also just to make a profit is open to debate. The aim of this paper is to discuss the various views of the responsibility of business, and to consider where accounting fits in. In addition, to explore the ethical responsibilities that a corporation may have beyond making profits for its stockholders. The Friedman view 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 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, 1983). When one is looking at the responsibilities of an individual or an organisation they must first examine their roles. The directors of companies have a fiduciary responsibility to act in the best interest of the shareholders. The managers are agents of the......

Words: 2760 - Pages: 12

Premium Essay

Ethics and Social Responsibility

...Ethics and Social Responsibility MGT/498 Strategic Plan, Ethics, and Social Responsibility Ethical values and social responsibility serve an important role in the strategic planning process. According to Milton Freidman, “[t]here is one and only one social responsibility of business—to use its 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” (Wheelen & Hunger, 2010, p. 72). With social media and the internet, it is difficult for companies only to focus on profits. Today, companies need to follow Archie Carroll four responsibilities of business. Those responsibilities include economic, legal, ethical, and discretionary. The priority starts with economic and ends with discretionary. According to Carroll, “a business firm must first make a profit to satisfy its economic responsibilities” (Wheelen & Hunger, 2010, p. 73). Once the company’s economic responsibilities have been met they can worry about the social responsibilities—ethical and discretionary. When a company decides to take responsibility for their actions by doing the right thing, this is called business ethics. In business a company or business has a social responsibility to the consumers and stock holders to make sure they are practicing proper business ethics to not only promote doing the right thing but to show that they are...

Words: 707 - Pages: 3

Premium Essay

Do Corporations Have Social Responsibility

...Do Corporations Have a Responsibility to Society Beyond Maximizing Profit? Shravan Kumar M Under the direction of professor, Minnick, Marc D Corporate Social Responsibility beyond Maximizing Profit Growing concern of society on socio-economic and environmental issues has raised the thought of corporate social responsibility. Corporate Social Responsibility (CSR) is a “concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”, which means beyond the frame given by law – by World Business Council for Sustainable Development (WBCSD) in 2004. Growing needs in energy, especially in emerging countries, limited oil reserves (non-renewable energy will necessarily become more expensive and renewable energy will be more and more used), waste management, and demographic growth at the global level (Currently we are 7.2 billion population approx.) are factors requiring that we take care of the environment and natural resources, and that we modify our consumption modes. The decrease in natural resources, demographic pressure and climate change, the increasing volatility and high prices of energy resources are present and future constraints that put the emphasis on energy and environmental issues, and place them in the heart of companies’ sustainable development policies. Main Arguments of Robert D. Hay and Edmund R. Gray Robert D. Hay and Edmund R. Gray argument......

Words: 1079 - Pages: 5

Premium Essay

What Is Business Ethics

...Abstract The articles, “What is business ethics?” by Peter Drucker and “The Social Responsibility of Business is to Increase its Profits” by Milton Friedman are about Business ethics and social responsibility to society at large. While both authors agree that we should have ethics in the business world, they argue that society holds corporations and ordinary individuals to different set of standards. Keywords: Social Responsibilities and Business Ethics In order to exam the assigned articles, it was important to understand the true definition of what is meant by social responsibility and business ethics to better understand whether Drucker and Friedman fully exploited ethics as we understand it in the business world today. Equally important was to examine the backgrounds of Milton Friedman and Peter Drucker. According to Wikipedia, Social responsibility is defined as an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit the society at large. According to Wikipedia, Business ethics (also known as corporate ethics) is defined as a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspect of business conduct and is relevant to the conduct of individual and business organizations as a whole. Based on Woopidoo “Milton Friedman (born July 31, 1912), won The Bank of Sweden Prize in Economic......

Words: 1490 - Pages: 6

Premium Essay

Social Responsibly of Business Argument

...Social Responsibly of Business Argument PHI 103: Informal Logic November 3, 2014 In Milton Friedman’s article, “The Social Responsibility of Business is to Increase its Profits”, published in The New York Time Magazine back in 1970 Friedman proposes the argument that a corporations social responsibility is to increase profits. “Milton Friedman’s article entitled The Social Responsibility of Business is to Increase its Profit is one of the most often used counter arguments for people who would eschew the idea that a corporation should consider more than just shareholders.” (College of Law) While creating a very debatable argument Friedman has opened my eyes to a topic of which I have never thought about or pondered. One premise that he makes is that only people or humans have responsibilities while a corporation may be considered an “artificial person” with artificial responsibilities yet an actual business cannot have social responsibilities. So does this mean corporations are to only look after themselves and shareholders and let customers deal with it? Working for the large corporation Ingersoll Rand I have seen first-hand that profit is more important than satisfied customers. For instance, there was a certain product my store was purchasing locally and selling it at different margins depending on the circumstances and customer. By purchasing this product locally we had the freedom to sell at basically whatever margin we wanted. Almost three......

Words: 1255 - Pages: 6

Premium Essay

Business Ethics and Corporate Social Responsibility Chapter Objectives

... Business Ethics and Corporate Social Responsibility CHAPTER OBJECTIVES 1 Explain the purpose of paying for whistleblowers. 2 Define ethics and describe sources of ethical guidance. 3 Discuss attempts at legislating ethics. 4 Explain the importance of creating an ethical culture, describe a code of ethics, and support the importance of linking pay to ethical behavior. 5 Explain human resource ethics and describe ethics training. 6 Describe the concept of corporate social responsibility. 7 Explain why everyone is not on board with regard to corporate social responsibility. 8 Explain corporate sustainability. 9 Describe a social audit. 10 Describe possible difficulties for corporate social responsibility to succeed in the global environment. KEY TERMS Ethics: Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. Human resource ethics: Application of ethical principles to human resource relationships and activities. Profession: Vocation characterized by the existence of a common body of knowledge and a procedure for certifying members. Corporate social responsibility (CSR): Implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves. Social audit: Systematic assessment of a company’s activities in terms of......

Words: 3911 - Pages: 16

Premium Essay

Business Ethics

...good business decision for the company. I have postulated some of my thoughts on the writings of Milton Friedman. While I have no objections to giving back to the community and doing social good, I do believe that a majority of the money, time and effort should come from employee contributions rather than corporate dollars used for funds, grants and scholarships. Companies should limit their direct involvement in these activities using just their brand and influence to raise public awareness to the cause, so long as it is consistent with the companies’ values and beliefs. I also believe it is the firm’s primary job is to focus on delivering the highest possible return of shareholder value. If a company cannot produce a profit, or sustain the shareholder’s appetite, then the possibility of promoting a Project Share cannot exist. Everything in the business revolution is predicated on returning value. I should clarify, that my statements above are based upon the fact the companies in discussion are publicly traded and not private entities. Private entities, which include partnerships, limited liability corporations and other non-traded companies with limited employees and owners who are the sole shareholders, can operate as the social responsibility doctrine as they see fit. 2) Milton Friedman’s, belief was that the one and only one social responsibility of a company is to” use its resources and engage in activities designed to increase profits so long as it stays......

Words: 613 - Pages: 3

Free Essay

"Rethinking the Social Responsibility of Business, "Reason

...Rethinking the Social Responsibility of Business From Reason (October 2005) Making Philanthropy Out of Obscenity -Milton Friedman By pursuing his own interest [an individual] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. -Adam Smith, The Wealth of Nations The differences between John Mackey and me regarding the social responsibility of business are for the most part rhetorical. Strip off the camouflage, and it turns out we are in essential agreement. Moreover, his company, Whole Foods Market, behaves in accordance with the principles I spelled out in my 1970 New York Times Magazine article. With respect to his company, it could hardly be otherwise. It has done well in a highly competitive industry. Had it devoted any significant fraction of its resources to exercising a social responsibility unrelated to the bottom line, it would be out of business by now or would have been taken over. Here is how Mackey himself describes his firm's activities: 1. "The most successful businesses put the customer first, instead of the investors" (which clearly means that this is the way to put the investors first). 2. "There can be little doubt that a certain amount of corporate philanthropy is simply good business and works for the long-term benefit of the investors." Compare this to what I wrote in 1970: "Of course, in practice the doctrine of......

Words: 3771 - Pages: 16

Premium Essay

Social Responsibility of Business

...Social Responsibility of Business Introduction What is the social responsibility of a business? Is it to increase its profits as Milton Friedman affirms? Before starting any debate about this topic, first let’s see what its definition is. According to the Business Dictionary, social responsibility is an “obligation of an organization's management towards the welfare and interests of the society which provides it the environment and resources to survive and flourish, and which is affected by the organizations actions and policies. 1 ” Furthermore, according to the Dictionary of Finance and Investment Terms, social responsibility is the “principle that businesses should actively contribute to the welfare of society and not only maximize profits. 2 ”These two definitions are in total opposition to Friedman’s statement. Never the less, I do think that any corporation can be social responsible in terms of these opposing points of view at the same time. In this essay, I will first present a summary of the article of Milton Friedman; then I will express my personal reflection on the topic and tell why a corporation can comply with both positions simultaneously Milton Friedman in his article “The Social Responsibility of Business is to Increase its Profits” states that only people can have responsibilities, and that there is not such a thing like social responsibility of business. A corporation, according to Friedman, is an artificial person and, therefore, may have......

Words: 1574 - Pages: 7

Premium Essay

Social Responsibility

...Social Responsibility Views on Corporate Social Responsibility Abstract This dissertation examines R. Edward Freeman and Milton Freidman perspectives surrounding corporate social responsibility by summarizing their respective articles titled: “Stakeholder Theory and The Corporate Objective Revisited” and “The Social Responsibility of Business is to Increase its Profits”. By examining their articles, I will provide a personal opinion of which of their economic models should be the leading model when it comes to business and corporate social responsibility. Summary of Articles Author R. Edward Freeman’s article “Stakeholder Theory and The Corporate Objective Revisited,” emphasized a response to a piece put out by Sundaram and Inkpen titled “The Corporate Objective Revisited” by clarifying misconceptions about stakeholder theory and concluding that truth and freedom are best served by seeing business and ethics as connected (Freeman, Wicks, & Parmar, 2004). Freeman supports the above statement by providing the following three main critiques: 1) the mischaracterization of stakeholder theory; 2) the primacy of creating value for stakeholders, and; 3) the real issues of economic and political freedom (Freeman, Wicks, & Parmar, 2004). In response to social responsibility, Freeman clarifies that stakeholder theory claims that no matter what the ultimate mission of the corporations or any form of business activity, managers and owners must take into account the......

Words: 984 - Pages: 4

Premium Essay

Corportate Social Responsibility

...Introduction The dominant model of business activity in the past merely concentrated on the benefit of the shareholders, which is maximizing profit from the firms’ activities. Any other benefits or harms created in the process of the activity were considered secondary. Issues such as ethics and creating values for customers and stakeholders were thus ignored and rarely paid attention to. Unfortunately with the business world ever-changing, the culture that was embedded in the past is no longer workable in this 21st century as it was resistant to changes, inconsistent with the laws and ignores the ethical side (Freeman 2008). The issue of Corporate Social Responsibility or CSR has been the subject of debate among researchers for the past twenty years (Chen & Winai, 2011). There have been many arguments if businesses should engage CSR initiatives in their operations. CSR or corporate citizenship is defined as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (Moir 2001). The essay will discuss on the literature review of the different perspectives of CSR, arguments against it and the analysis if CSR represent corporations’ genuine desire to contribute towards the society. Literature Review Arguments for CSR There are three reasons why corporate engage in CSR activities. They are pragmatic......

Words: 2985 - Pages: 12

New Men Women 200ml DEXE ORGANIC HAIR GROWTH SHAMPOO Chinese Herbal | Сборник - Top 100 Зайцев.Нет Ноябрь (2017) MP3 | NSND Minh Đức