Advantages of Strategic Planning

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 for the business: to use its resources in order to increase

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 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 business is to increase profit).

What Friedman implies is that shareholders should only be concerned with maximizing profits and not be obligated to be “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 “social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.”

"Strategic management is a set of managerial decisions and actions that determine the long-run performance of a corporation" (Wheelen & Hunger, 2006, p.3). The benefits of strategic management helps the firm focus on the objectives and develop the steps involved in obtaining the vision and financial wealth of the organization. An effective strategic management plan should include the following three questions: (1) Where is the organization now? (2) If no changes are

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

Friedman’s second argument follows a similar idea, but with another reason why the businessman’s ideas of social responsibility aren’t to be fulfilled through the business. If the agent of a business would spend money to further his supposed social responsibilities, he is using something that is not his to spend as he sees fit. Any money earned by increasing the price to consumers, decreasing the wages of the workers, or withheld from the stockholders belongs to the business and has been taken from these parties to be used in ways that they could have used it on their own. If the agent uses the money in

In 1970, Milton Friedman published an essay in which he argued that corporations’ only social responsibility ought to be making a profit for its shareholders as long as it is engaged in open and free competition without deception or fraud (Brusseau, 2012. page. 676). Moreover, Mr. Friedman also argued that only people can have social responsibilities because they control their actions and corporations don’t. However, we see that corporations are engaged in businesses such as making loans, signing contracts, acquiring licenses, creating jobs and services. They act as persons. If corporations had no responsibilities people would not invest in them; for that reason, I believe corporations should have legal and ethical responsibilities.

Milton Friedman. “The Social Responsibility of business is to increase its profits” from business ethics: A Philosophical reader, Thomas I.White, ed(s)., Maxwell Macmillan Canada, 1993, 162-167

In his paper, The Social Responsibilities of Business is to Increase its Profits (Friedman, 1970), Milton Friedman discusses social responsibility and what he feels it means in the business arena. He goes on to say “A corporation is an artificial person” (Friedman, 1970) and since this is not a real person, cannot have any responsibilities. While a corporation or business has a leader or board of directors, Friedman states these individuals cannot make decisions on social responsibility without eating into the profits of the company, the employee’s wages, or even the price that the customer has to pay for the item.

The belief of Milton Friedman that relates to the concept that business only has one social responsibility which is to make a profit, I do not agree with this statement. Even though I do not believe in this statement, it is still essentially important for businesses to make a profit. This is a critical part of the business model for if business did not make a profit, they would not exist. The part of the statement that I disagree with is the part that deals with “business has only one social responsibility”. To go into business whether a sole proprietorship or a corporation, there must be a reason as to why. Often people go into business to make a living or to provide for themselves or their family, but most often the underlining reason is not to

Milton Friedman, in his work titled, “ 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 “stealing”. In my argument against Milton Friedman’s “must-not” engage in core CSR stance, I would like to introduce the argument of expanding the responsibility of business to only maximize profit. Before I elaborate, please consider the following example:

“There 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.” (Friedman) Friedman’s word perfectly defines the shareholder theory. However, stakeholder theorists, like John Mackey or Edward Freeman, argue that business has an ethical obligation to all stakeholders, including employees, suppliers, costumers, society and any other groups of people that the business has a relationship with. Personally, I am more inclined to Milton Friedman’s sentiment for various reasons demonstrated as below.

Milton Friedman took a “Shareholder Approach” to social responsibility. This approach claimed that owners provide fund to a company’s managers or entrepreneurs (we called “manager” here after for easy citation). Those managers are supposed to use the fund only in ways that have been authorized by the owners. Friedman proposed that the only one social responsibility of business is to increase its profits as long as it operates with open and free competition without deception.

For a long time now, there has been much debate over the social responsibility of a business. Friedman is one of the most influential

First, we must understand what Friedman’s view is on corporate social responsibility. What are the social responsibilities that a corporation must follow? Friedman discussed in his article that it is the corporation’s responsibility to make as much money as possible for the stockholder. This statement made by him made me wonder about safety for the workers, excessive pollution, and how situations are handled in less-developed countries and child labor laws. I think that Friedman was not aware how this statement would be interpreted, especially in an inappropriate way. He was probably looking at the short