Social Responsibility Of Business : Milton Friedman, The Famous Nobel Prize Winning Economist

Describe goals and objectives as they apply to business. pg 181-182; wk 6 lecture, pg 1

Subsequently, Denning may have misinterpreted Friedman’s main argument. The actual title of Friedman's article is "The Social Responsibility of Business is to Increase its Profits". Denning hastily substituted the word "sole" for "social" and misinterpreted Friedman’s argument to be that that the sole purpose of the firm is to make money for shareholders. This is not true. The main issue Friedman was tackling was the social responsibility of business; the responsibility that it has to the society. In fact, the word “sole” was not mentioned even once in the

Market conditions are constantly changing; the market conditions that the firm started with may not be the same market conditions a few months later. This gives business managers the opportunity to keep up with change and continuously improving their skills and assets.

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.

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 profit).

What Friedman implies is that shareholders should only be concerned with maximizing profits and not be obligated to be “socially responsible.” In that case, the manager would only have one priority, to maximize profits. However, what if that manager determined that social endeavors is the best option to maximize profits? This would make the corporation socially responsible while still maintaining maximum profits. The argument presented by Friedman in this case is that while the manager is performing as expected by maximizing profits, this type of “social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.”

Nevertheless, Friedman pointed out that the profits has taken the firms in to the hand of business intellectuals by which Friedman recommend that the financial system by which the organisation run its business is in the restricted responsibility protection which makes the organisations to privatise their profits (Friedman 1970 pp. 177-184). Friedman also suggested that according to him the shareholder theory in terms of socially responsible can only increase the profit. But on the other hand shareholder theory of Edward Freeman completely support the theory of shareholder towards its role to be socially responsible in the society and maximising the profits for the benefits of shareholders within the firms and society as well (Freeman 2008 pp. 162-165).

Question 1: In the 1960s, Milton Friedman said that the purpose of business was to increase shareholder return and that issues of ethics were not the concern of any business – the law should be complied with, morality should be strived for, but ethical consideration had no place in the business environment.

Milton Friedman was an American economist, statistician and writer, who had a massive impact on the research agenda of the economics profession. His famous words “the only responsibility of business is to increase its profits” (Friedman, Milton. 1970) led to many controversial debates on whether businesses should have ethics or if profit should be their main goal. Corporate social responsibility has many definitions, as its interpretation is quite loose, so I have chosen one that relates the most to this essay, given by the World Business Council for Sustainable Development, in 2000: “Corporate social

a. Milton Friedman’s philosophy of corporate responsibility is that “social matters are not the concern of business people and that these problems should be resolved by the unfettered workings of the free market system”. As harsh as it may sound, what he mean course to say was that a business has “to make as much money as possible while conforming to basic rules of society”. Meanwhile, Archie Carroll’s philosophy states that a business has “four kinds of social responsibilities” that a firm must address in their corporate social responsibility, which are economic, legal, ethical and philanthropic duties. Clearly they have two very different views. Friedman sees that a business’s ultimate goal is to generate profits, then comes the legal and ethical responsibilities it must fulfill. To Friedman, there is no need to be philanthropic because the firm’s job is only to make money for the economy, and it is the economy’s obligation to be philanthropic with the profits. Carroll agrees with Friedman that a company must be profitable, then be legal by obeying the law, and be ethical to avoid harm. However, Carroll believes it is also desired and in the best interests of the company to be philanthropic because it will “create a good corporate citizen”. Friedman has an economic view whereas Carroll has a social view. In my opinion, Archie Carroll’s philosophy on corporate social responsibility is more accurate. The social pyramid model he made to go with his views makes

Friedman argues that the only responsibility a business has to society is to act in its own self-interest to create revenue and remain successful in the economic system (158).Created to make a profit by providing a task or service, a business must “use its resources and engage in activities designed to increase its profits” (Friedman 164). A business could use any tactic to gain a profit as long as they remained “within the rules of the game” (Friedman 164). The rules implied that no deception or fraud could take place while the corporation obtained their profit.

Milton Friedman’s shareholder theory of management says that the purpose of a business is to make money for the owner or the stockholders of the business. Friedman says that there is only one social responsibility for the business: to use its resources in order to increase

Milton Friedman wrote in his famous 1970’s article in The New York Times Magazine, that “the one and only social responsibility of business, is to increase profits for shareholders.” Milton Friedman's view on business responsibility accentuates the importance of maximizing firm's value. He pointed that the “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, engaged in open and free completion without deception or fraud’’ and by taking on the burden of social cost, the business becomes less efficient (Milton Friedman, 1962).

For a long time now, there has been much debate over the social responsibility of a business. Friedman is one of the most influential

To begin with, Chapter two covers three important aspects of the business world which are competitiveness, strategy, and also productivity. These particular aspects are very important for any company to succeed in the world of business. With that being stated, any type of firm such as a manufacturer or a service provider, they must employ these three aspects because they play an important role in growing revenues. For an organization to even be considered successful, they must have a competitive advantage which leads to a strategy that will meet the company’s goals, while having the knowledge-ability to help produce the goods and services in a cost effective manner. Also, it is known that most organizations have a single state called the Mission Statement. The mission statement basically summarizes these three aspects of a company. One question that the Mission Statement should address is, “What level of business are we in?” This mission statement is categorized as the absolute basis for the organizational goals.