Social obligation of business

Many believe that business entities should have an ethical duty to be socially responsible, to work towards increasing its positive effects on society while decreasing its negative effects. Many organizations look for opportunities to be socially responsible while also creating shareholder wealth.

In Friedman’s article, The Social Responsibility of Business is to Increase Its Profit, he gives two arguments for what, if any, social responsibilities a business has and why they have it. In his arguments, he presents a businessman in charge of running the business on behalf of the owner. The first point he raises in dictating what responsibilities the businessman should fulfill involves defining the businessman’s purpose. He was hired as an agent of the shareholders, the owners of the business, etc. to make the business profitable. Barring some eleemosynary functions, as Friedman states, such as hospitals and schools, the general purpose of a business is to make money, therefore, the responsibilities of an agent of the business would be to increase said profits. To do otherwise would be to fulfill a purpose other than the one he was hired for and betray the owners.

Do you agree or disagree with the following quotation: “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 free and open competition, without deception and fraud.” Milton Friedman, a Nobel Prize winning economist. In other words, the social responsibility of business is to make a profit.

Continually in today’s working environment businesses and corporations stay finding new ways and methods to align their business goals and values with the profitability of those who they serve or work for (stockholders, other agents). The goal of companies in the business sector is still maximizing profit, but questions now arise at to what extent is that the only goal of the company. Furthermore, we see now more than any time period in history, companies taking on more of a social responsibility than before, which effects their decision making and business plan. The argument therefore remains, is increasing profits the only social responsibility of business?

The expectation that businesses behave responsibly and positively contribute to society all while pursuing their economic goals is one that holds firm through all generations. Stakeholders, both market and nonmarket, expect businesses to be socially responsible. Many companies have responded to this by including this growing expectation as part of their overall business operations. There are companies in existence today whose sole purpose is to socially benefit society alongside businesses who simply combine social benefits with their economic goals as their company mission. These changes in societal expectations and thus company purpose we’ve seen in the business community over time often blurs the line of what it means to be socially

Because corporations are established to profit and shareholders invest money with expectations of a greater return, managers cannot be given a directive to be “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.

The benefit to business of good Corporate Social Responsibility is difficult to quantify as it varies depending on the nature of the enterprise. Some scholars believe that there is a business justification for CSR. That is, what is good for the environment and society will be good for company profitability. And studies have shown a slightly positive correlation between CSR and financial gain (Steiner and Steiner, 2006). However, as Freidmanism claims, the first responsibility of business is to make enough profit to cover the costs for the future. If this social responsibility is not met, no other responsibilities can be (Hargreaves, 2006). Therefore it is critical that CSR activities are included in strategy formulation and that the level of resources devoted to CSR is determined like any other strategy – through cost/benefit analysis. Corporations will not throw money away…they need to see it

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

Milton Friedman was a 20th century American economist who advocated free-market capitalism. In 1970 he submitted an editorial article entitled “The Social Responsibility of Business is to Increase its Profits” to the New York Times. In the article, Friedman argues that in free market systems it is nonsensical to make corporate entities adhere to “social responsibilities of business” pushed by activists, as corporations are artificial in nature, and thus do not have any social responsibilities other than to make money for the shareholders of the company. I will argue against this paper and support the claim corporations do in-fact have moral and ethical obligations to more than just their shareholders, and that many individuals have their stakes and livelihoods embedded within the acts of corporations. As well, the idea in the article that corporations are not moral agents has led to unsavory violations of human rights across the world, failing Kant’s second formulation of the Categorical Imperative, as well as not satisfying Act Utilitarianism. Thus, corporations, and individuals within those corporations, possess considerable ability to make ethical decisions that have great impact to many people, culminating in the truth that corporations have moral status.

The topic I choose was “Does business have any social responsibility (over and above turning a profit) and if it does what should such a responsibility amount to?”. I feel as though profits are a huge part of what a business should focus on, it should not be the only thing. I learned in one of my business classes that a corporation acts as a fictitious person. It bears the responsibility of any all decisions, good and bad. The benefit of a corporation versus sole proprietorship is that the business takes on the debt, not the sole proprietor. When the corporation goes belly up, the stockholders aren’t going belly up as well. So therefore, the corporation should be socially responsible, just as a person should be.

There are conflicting expectations of the nature of a company’s responsibilities to society. However, those companies that undertake what may be termed ‘Corporate Social Responsibility’ must decide; what are the actual social responsibilities of these companies? I will present a possible paradigm. Also, I will look at the benefit to the business that employs proper management as compared the business with poor management. This research paper describes my view of corporate social responsibility and compares the social responsibilities of Delta Air Lines and Spirit

Consideration of social responsibility is an important concern for the successful operation of a business. A business can be structured with the sole intention of maximizing profit, or it can be structured in a way in which social obligation beyond profit is considered. The two opposing views are introduced by Ferdinand Tonnies in The Argument, and correspond to his concepts of Gemeinschaft and Gesselschaft (Tonnies, Ferdinand "The Argument” from Community and Civil Society) The opposing nature of

Is the deception of consumers worth making a profit? The Ford Pinto, popular car of the 1970s, made a profit off of a vehicle that endangered the lives of hundreds of people. In his essay “Pinto Madness” Mark Dowie, author and Pulitzer Prize nominee, exposed the unethical decisions made by Ford Motor Company. When it came to their customer’s safety and profit for the company, Ford made a decision that led to consequences their customers had to pay the price for. Should the business be held accountable for these actions? In his essay “The Social Responsibility of Business Is to Increase Its Profit” Milton Friedman, powerful economist, discusses what a business should prioritize in the economic system. Friedman declares what a business is responsible for and the guidelines they must follow. Due to Friedman’s view, he would not have condoned the actions and decisions that the executives at Ford Motor Company took.

Some business leaders are taking good moral decisions and the reason behind that idea is that the core part of their business strategy is to create mutual benefit for both wider society and business as well. The growing desire of top management is to find out ways to create mutual benefit for both the organizations and the stake holders but the public still believes that companies are greedy entities which make decisions only in their self-interest, even at the cost of greater public welfare. It is the utmost obligation of the companies to discern the social issues while making the decisions (Yashiro, Yoshida and Suzuki, no date; Godwin, 2006; Schwab, 1996; Godwin, 2008; Werhane, 1998; Werhane, 2002; Heath, 2008; Mehalik and Gorman, 2006).

Advocates of social welfare argue that firms are obliged to act in a socially responsible manner. Dodd (xxx?) also argued that businesses must engage in social services, even at the expense of profits, in order to serve the best interests of employees, creditors, customers, and other stakeholders, as it appears that there exists a positive relationship between social and financial performance (xxx?), and socially responsible business practices affect all aspects of business operations and contribute significantly to corporate productivity and profitability (Website of Business for Social Responsibility). In other words, a corporation should engage with social interests in order to fulfil its social responsibility and to maximise long-run profits.