The Social Responsibility of a Business

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The Social Responsibility of Business:
The role of business in the society became a major aspect across business after Milton Freedman wrote the most provocative article in 1970. As an economist, Freedman stated that the main purpose of businesses is to generate profits for its shareholders. Furthermore, he argued that companies with responsible attitudes were likely to encounter increased binding constraints unlike those that lacked these attitudes, resulting in them becoming less competitive. As a hotly debated topic, Freedman's article has both positive and negative points regarding the societal role of businesses.

Points of Agreement in Freedman's Article: Some of the positive points from the article on the social responsibility of business that I agree with include "¦.

Obligation to Generate Satisfying Returns: One of the main reasons, though not the only reason, for the existence of businesses is to generate satisfying returns to shareholders since these people have provided the risk capital that has enabled the business to exist (Lewis, 2010). While the concept may fail in certain instances, profit maximization is the most appropriate and available rule in the marketplace. As emphasized in the article, Freedman is thinking only on the basis of maximizing profits for the investors. This principle or concept is acceptable as long as the interests of customers are considered in attempts to maximize profits for the investors.
Acting in the Shareholders' Best
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