Milton Friedman, “the Social Responsibility of Business Is...

Milton Friedman, â€Å"The Social Responsibility of Business is to Increase Profits† In the article, â€Å"The Social Responsibility of Business Is to Increase Profits,† Friedman states that â€Å"businessmen believe that they are defending free enterprise when they proclaim that business is not concerned merely with profit but also with promoting desirable social ends.† This social responsibility is defined as Corporate Social Responsibility (CSR), which is the belief that â€Å"corporations owe a greater duty to their communities and stakeholders† by having a â€Å"social conscience.† This, among other things, includes being environmentally responsible, contributing to non-profit organizations, and eliminating discrimination. Friedman argues that only†¦show more content†¦Because corporations are established to profit and shareholders invest money with expectations of a greater return, managers cannot be given a directive to be â€Å"socially responsible† without providing specific criteria of checks and balances to which needs to adhere. Therefore, it is imperative to the success of a corporation for managers to not act solely but rather to act within the policies of the shareholders. What Friedman implies is that shareholders should only be concerned with maximizing profits and not be obligated to be â€Å"socially responsible.† In that case, the manager would only have one priority, to maximize profits. However, what if that manager determined that social endeavors is the best option to maximize profits? This would make the corporation socially responsible while still maintaining maximum profits. The argument presented by Friedman in this case is that while the manager is performing as expected by maximizing profits, this type of â€Å"social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.† This â€Å"cloak† refers to corporations acting socially responsible but for the sole purpose of making profits rather than performing such endeavors for the sole purpose of benefiting society. An example would be a solar company providing â€Å"free† electricity to a campus in exchange for use land to promoteShow MoreRelatedMilton Friedmans Essay Analysis of The Social Responsibility to Increase Profit 727 Words   |  3 Pagestaking a look at the famous Milton Friedmans 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 business is to use its resources andRead MoreArgument For Promotion Of Core Csr1635 Words   |  7 Pagesargue my middle must against my opponent (Milton Friedman’s) â€Å"must not† argument for promotion of core CSR. WE MUST PROMOTE CORE CSR vs WE MUST NOT PROMOTE CORE CSR Milton Friedman, in his work titled, â€Å" The Social Responsibility of Business is to Increase its Profits†, emphasizes the role of business in society is to maximize shareholder wealth, and likens any activity misaligned with regard to that mission as â€Å"stealing†. In my argument against Milton Friedman’s â€Å"must-not† engage in core CSRRead MoreWal-Mart Case Study on Csr1616 Words   |  7 PagesCCGL 9018 Final Essay Name: CHAN YIK UID 3035036503 Case study of Wal-Mart Introduction In this essay, the case of Wal-Mart will be discussed by applying the Milton Friedman’s argument on CSR and utilitarianism. Wal-Mart is the largest retailer in the world, however, it is also known for ruthless exploitation of employee, squeezing suppliers, and crushing communities. It has been the Public Enemy No. 1 for a generation of activists and reformers. To cope with these oppositions, Wal-MartRead MoreMilton Friedman1624 Words   |  7 PagesIn this essay I evaluate Milton Friedman’s essay: â€Å"The Social Responsibility of Business Is to Increase Its Profits† in 1970, on the Social Responsibility of a business and his theory, which is called the â€Å"Efficiency Perspective†. In every article and book that I have read about social responsibility, Friedman’s â€Å"Efficiency Perspective is placed centrally. During my research I found that Friedman is often criticized for being too classical. Friedman believes that manager’s foremost objective or evenRead MoreMilton Friedman: The Goal of the Firm744 Words   |  3 PagesMilton Friedman the Goal of the Firm The three goals of the firm are to maximum market value, maximum share price, and maximum value of owner equity. Milton Friedman asserts the only responsibility of a business is to increase its profits. Friedman reasons that corporate executives are employees of the owners of the business, or the stockholders, and as such have a fiduciary duty as agents to principals. The concept of social responsibility implies something other than to increase profits and ifRead MoreThe Social Responsibility Of Corporations Essay806 Words   |  4 Pagesimportance of social responsibility within corporations. This paper also explores â€Å"The Social Responsibility of Business is to Increase its Profits† by Milton Friedman and his stance on social responsibility. Friedman believed that corporations should not waste money on new initiatives if it was just to appease the public, especially if it went above what laws required. Examples are shown how corporations must listen to the customer or it could hurt the profitability of the corporation, with social mediaRead MoreMarx View on Capitalism1635 Words   |  7 Pagesis a social inquirer, he sees a lot and he chooses accordingly, what was it about his character Joe Keller that makes All My Sons, written in 1947, so important to us that we are reading it in University in 2009? History speaks to the present, and this text takes us into the past to help us understand the flaws of our socio economic system of capitalism and questions the social responsibility of businesses under capitalism. Social responsibility of a business is the willingness of a business to acceptRead MoreThe Ford Pinto Case Analysis1576 Words   |  7 PagesThe Ford Pinto Case Milton Friedman believed a free-market system, in which goods and services are exchanged and controlled by individuals and privately-owned businesses without government authority, was the only way to achieve personal freedom. Adam Smith, a 18th century philosopher and economist, held the belief that in a free society, the role of government should be limited to the protection of the people, the administration of justice through the court system, and the maintenance of all publicRead MoreEssay on Friedman vs Freeman827 Words   |  4 Pagesfield of business ethics. There are two approaches to answering such questions. The first one is Milton Friedman’s shareholder theory of management and the second one is Edwards Freeman’s â€Å"Stakeholder† theory of management, two different views about the purpose and aims of a business. Milton Friedman’s shareholder theory of management says that the purpose of a business is to make money for the owner or the stockholders of the business. Friedman says that there is only one social responsibility forRead MoreThe Social Responsibility Of Business1042 Words   |  5 PagesCorporate Social Responsibility is defined as a business preparation that involves participating in creativities that help society. Friedman: The Social Responsibility of Business is to increase its profits. Milton Friedman argues that the only social responsibility a business has is to itself – mainly to its profits, and therefore, its stakeholders. The business management in charge of a company works for the organization and eventually for the stakeholders. This person is responsible for carrying