Milton Friedman's Essay Analysis Of The Social Responsibility To Increase Profit

876 words - 4 pages

In this essay we are taking a look at the famous Milton Friedman's essay "The Social Responsibility of Business is to Increase Profit ". The following paper is an attempt to critically evaluate the article in consideration of Freeman Stakeholder Theory.
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 ...view middle of the document...

He also compared businesses with social responsibilities to governmental institutions. By looking at the structure of large businesses, we can understand the point he was making. So, many of the large businesses are structured as C-corporations which consists of shareholders, the board of directions and corporate officers. Shareholders, the ones who invest their money elect the board of directions which hires corporate officers to manage the daily business operations. So it is the responsibility of the corporate executive to generate the profit while taking into account the laws and regulations.
But, here is my point. If the social responsibility of a business is to increase profit, this does not omit the probability of degrading the surrounding environments (society, economy, ecology...) which by default will be contradicting to the term social responsibility itself which enhances on bringing benefit to society. For me, a business can be at the same time socially engaged and financially maximizing its profit without using someone else's money. For example, a company can be ecological by doing some really simple actions like recycling papers no longer needed, turning off lights and powering off devices not in use, donating equipment and material no longer used in the work offices, and so on. These simple actions are in fact very beneficial for the society. Thus the social responsibility of a business can be maximizing profit while positively improving the surrounding environments.
Now let’s tackle a little bit Freeman Stakeholder Theory which states that a business has a responsibility to maintain the interest of multiple stakeholders while...

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