¶ … social corporate responsibility?
The source of conflict
CSR with profitability
Opposing Friedman: The view of others
In the article "the social responsibility of business is to increase its profits" by Milton Friedman, he takes the position that various corporations can never be socially responsible. He believes that it's only the people in the company who have responsibilities. Friedman (1970) suggests that the concept of social responsibility should be taken by corporate executives of various businesses but not by businesses themselves. This is because it is the corporate executive's responsibility to conduct business and steer the business to profitability. The corporate executive's ethical values and those of the corporation owners should interact in a way that creates value in the corporation. They could be divergent but should be geared towards the profitability of the corporation. This paper is a critique of the article. The paper is based on a divergent view that is disagrees with the one provided by Friedman.
Introduction
What is social corporate responsibility?
The definition of corporate social responsibility (CSR) is not clear cut. McWilliams and Siegel (2001) define CSR as "actions that appear to further some social good, beyond the interest of the firm and that which is required by law."(p.117).However, an important point to note is that CSR is more than just the observation of the law as pointed out by McWilliams & Siegel (2001). A better definition is provided by Frooman (1997) that points out that CSR is "An action by a firm, which the firm chooses to take, that substantially affects an identifiable social stakeholder's welfare." (p.227). It is therefore crucial for a socially responsible firm to initiate steps as well as adopt policies together with business practices that moves past the minimum legal requirements as well as effectively contribute to the key stakeholder's welfare. This therefore implies that CSR is viewed as a very comprehensive policy sets, programs and practices that are integrated seamlessly into the key business operations, decision making apparatus and supply chains in the given corporation. It however usually entails issues related to business ethics, governance, community investment, human rights, environments issues, the general market place and the workplace.
In this paper I am evaluating Milton Friedman's essay which states that The Social Responsibility of Business Is to Increase Its Profits. The essay was written in the year 1970. In all books and articles that I have examined about social responsibility, the Efficiency Perspective of Friedman is centrally placed. When I was conducting my research I realized that Friedman is always criticized because of being very classical. He strongly believes that the major objective of a manager or his moral role to the firm or to the business should be to always maximize profits. However, there is one condition complicating his perspective, not only to me but also to several well-known writers. According to him, the obligations of the manager ought to be carried out when in compliance with the vital societal rules, both the people who are embodied in law and also those who are embodied in moral tradition. This results in the question that the essay seeks to answer. The question is; to what degree is the "Efficiency Perspective" of Friedman giving a basis for moral and responsible international management behavior? And should we have any fear in case it fails to happen? To answer fully these queries, I need to first explain the two separate parts of the first query: responsible global management behavior and also moral global management behavior. In businesses these days they join these two sections, in that order, responsible and moral gets to social responsibility in global management. The other query expects the other models and theories that we ought to consider when the efficiency perspective of Friedman is not giving a basis for social responsibility in international management.
Before I move further to respond to these questions, I would like to elaborate more concerning the concept of social responsibility. Later, I will elaborate Friedman's full theory, and also its relationship with these numerous social responsibility models. After all these, I will give a conclusion.
In his well-known essay,...
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