On September 13, 1970, Milton Friedman wrote and article, Social Responsibility of Business is to Increase its Profits. One of Milton’s theories suggested that the only legitimate incentive for a corporation to exist is to maximize its profits with its shareholders. As companies progress over time, so does the reason for the company existence. “What makes a stake holder?” Isabel Hilton (GE Stakeholders 2009)
“What makes a stake holder? If you take a broad view of business then almost anyone who is affect by the operation of the business is a stakeholder. There’s a narrow view, which is about shareholding, profit, and profit line. But there’s a much wider view, which is all the other activities, all the other impacts that business can have. So if as a business you go and do something in a particular community, you know there’s a financial calculation, but there’s all sorts of other social calculation, there are social impacts, there are benefits, there are downsides. And the view of an enlighten company are that all these things are important.” Isabel Hilton (CEO, China Dialogues & Journalist) (GE Stakeholders 2009)
A stakeholder comes from wide variety of people and activities that impacts the company; from shareholders and investors to consumers to the distribution of the products, as well as everything in between. This can affect the company growth as a whole. When groups of people come together to form a small study group or a company, they are all able to accomplish something. They can achieve something small such as passing a test to something larger like, contributing to society.
Investors use corporate performance evaluation to assess how well the company is doing over a period of time. In order to satisfy its investors, a company needs to be able to generate some profit. In order generate more profit; it is necessary for companies to please its consumers. Many consumers are now looking into companies who promote organization that are socially and environmentally responsible. “It may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees…” (Friedman, Milton 1970)
Corporate social responsibility is an ideology where a company and/or organization(s) have to act upon an obligation that will help to benefit communities, society, and environment around them. Numerous of corporation created a section or division to help the relationship between businesses and society. To demonstrate how corporate social responsibilities are divided based on strength and concerns from the past to the future, consider General Electrics (GE). General Electrics, “GE (NYSE: GE) is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. From aircraft engines and power generation to financial services, medical imaging, and television...