In Response to Friedman’s View of Corporate Social Responsibility

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.”

Corporate Social Responsibility (CSR) is the concept of businesses considering economic, social and environmental benefits for all their stakeholders. Friedman’s position on CSR appears very negative, his argument is the only social responsibility businesses have is to exploit their capabilities to increase profits, therefore implying businesses solely aim to increase profits while disregarding social and environmental factors (Friedman, 1970). I disagree with this view because I believe businesses are required to undertake social responsibilities, such as recycling and using fair trade ingredients, to provide customer satisfaction and create a good public image. If customers were not satisfied with the products or services, they purchase or thought they were buying from an unethical company this could decrease demand and profits. Therefore, CSR is important to businesses because businesses need customers to survive and a method of retaining or gaining customers is to be socially responsible.

The first source is a quote by Milton Friedman that criticizes the view of corporate officials needing to abide to a “social responsibility”. He claims that, in a free market economy, corporate officials only have one goal, to increase profits for their business. So long as it's done without deception, fraud and engages an open and free competition. It is obvious that Martian Friedman is a supporter of capitalism. Capitalism is an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state or province. It is a right-wing ideology built on the foundation of individualism. It encourages freedom of action for individuals over government control. The source presents Milton is a supporter of individualism and classical liberalism. He favors an economy focused on making profits for the individual with little to no government intervention. Ideologies that

Milton Friedman argues that persons may choose to undertake social responsibilities to their communities, churches, or nations, and devote their own incomes to causes that they deem morally worthy. But, he adds, if corporate executives attempt to take such social responsibilities or to direct the corporation’s profits to such personal causes, without approval from the shareholders, then:

Friedman, M. (1970, September 13). The social responsibility of business is to enhance its profits. The New York Times Magazine.

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.

Therefore when Friedman mentions the role of a corporate executive, it doesn’t make sense for an individual working towards improving the business to care about social responsibilities if it isn’t a desire of his employer (Friedman, 1970). A corporate executive should only worry about social responsibility in his personal life not when the corporations stakeholders and employers money is at stake (Friedman, 1970). When a corporate executive acts voluntarily, he is “acting as a principle, not an agent; he is spending his money or time or energy…” (Friedman, 1970,

Milton Friedman was a respected economist that posited numerous new ideologies within the economic realm during the 20th century. In 1976, Friedman was awarded the Nobel Memorial Prize in Economic Sciences for his examination of monetary history and philosophy, consumption analysis, and the theory of stabilization policy. Another theme Friedman is generally known for is his position with respect to the responsibilities of corporations. He had expressed that "few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible" (Chandler and Werther Jr., 2014, p. xxxii). By this, Friedman is saying that maximization of property for the sake of shareholder return jeopardizes and subverts the possibility of corporations acting ethically and socially responsibly. He does not trust that their fundamental center inside their operations ought to be focused on the part of corporate social obligation. Not at all like individuals, Friedman trusts that an organization cannot have an obligation. They have one obligation and that is to make a profit (Friedman, 2013).

Milton Friedman believes the idea of businesses having some sort of responsibility to society is a baseless notion, and describes discussions encouraging it as lacking meaningful analysis or precision. “What does it mean to say that ‘business’ has responsibilities? Only people can have responsibilities” (Friedman, p.218)1. Corporations are led by executives which are chosen by the owners

My argument is that Friedman is not correct. Friedman’s description of the business process of undemocratic is agreeable. However, the corporate executive must be fully qualified to an confident in spending the stockholders or customers or employees money and must in fact know how to spend it. This is in total contradiction to one of Friedman’s essential claims. The corporate executive who accomplishes social responsibility outcomes with the limited time, funds, and effort allocated to him / her is doubtedly providing forward the profitability, awareness, and value of the brands which him / her represents. Customers express value in their purchases. Any causal reading will clearly indicate the value both the American and global customers place

In his paper titled The Social Responsibility of Business is to Increase Its Profits”, Milton Friedman addresses the key issue of weighing social responsibility against profit maximization for shareholders. This conflict is the basis for Friedman’s whole paper, as he explores the two sides of the situation. In order to set up his argument, Friedman lays down a framework by explicitly stating a certain premise. This is that businessman view “social responsibility” and profit as not being mutually exclusive. In other words, the majority of businessman believe that they can operate a socially responsible operation, while still optimizing profits in the long run. Friedman argues in favor of this viewpoint by making a claim and providing a solid line of reasoning to support his claim. Friedman’s main claim in this paper is that corporate executives must conduct business with the aim to satisfy the desires and wishes of shareholders. He says that often the principal desire of shareholders is to maximize profits for the company, while still conforming to the rules of society. These rules can be purely legal, but can also be ethical and moral rules that are imposed by society. Friedman argues that any social responsibilities that go beyond the scope of maximizing profits is “pure and unadulterated socialism” (239). To reinforce his main claim, Friedman uses a logical flow of reasons that is predicated upon the role of executives and shareholders.

Milton Friedman was an American economist, statistician and writer, who had a massive impact on the research agenda of the economics profession. His famous words “the only responsibility of business is to increase its profits” (Friedman, Milton. 1970) led to many controversial debates on whether businesses should have ethics or if profit should be their main goal. Corporate social responsibility has many definitions, as its interpretation is quite loose, so I have chosen one that relates the most to this essay, given by the World Business Council for Sustainable Development, in 2000: “Corporate social

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