Milton Friedman's Views On Social Responsibility Of Business

Responsibility is defined as “something that you should do because it is morally right, [and] legally required” (www.merriam-webster.com). In “Of Mice and Men” by John Steinbeck, the theme of social responsibility is frequently used throughout the novel. Various characters in the book are conflicted with whether they should be socially responsible for the greater good of society. On the issue of social responsibility, Johnson C. Montgomery, author of “The Island Of Plenty,” states that: “As compassionate human beings we grieve for the condition of mankind, but our grief must not interfere with our perception of reality and our planning for a better future for those who will come after us……but the truth is often very simple and reality is inhumane”.

•Ethical responsibilities - Companies are also expected to comply with the ethical norms of a society. Because these are normally not written in law and are therefore not a legal requirement it is difficult for companies to behave and follow it. However there is an inherent link between legal and ethical emergence of new laws. It can be expected that current ethics will be used in

In this paper, I am going to discuss and explain my opinions on why company Q is or is not socially responsible. Company Q recently closed a couple of stores in high crime areas. Company Q also started offering very limited health conscious and organic products. The local food bank has contacted Company Q requesting day old food for donations. Company Q has declined the donation request due to possible fraud by its employees and has started throwing the food away.

The selected corporation is the Volkswagen, a German car manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. The Volkswagen’s corporate website is http://www.vw.com/. According to the International Ethical Business Registry,

It is the firm’s obligation to evaluate in its decision-making processes the effects of its decisions on the external social system in a manner that will accomplish social benefits along with the traditional economic gains, which the firm seeks. It means that social responsibility begins where the law ends. A firm is not being socially responsible if it merely complies with the minimum requirements of the law, because this is what any good citizen would do.” A firm will not survive without the support of both the stakeholders and shareholders, thus the CSR proposes the indication which states that a firm can never exist In a vacuum (Khalidah et. al.).

Milton Friedman was an American economist and statistician best known for his strong belief in free-market capitalism. During his time as professor at the University of Chicago, Friedman developed numerous free-market theories that opposed the views of traditional Keynesian economists. A diminutive man known for his strong-willed and combative style, Mr. Friedman provided the intellectual foundations for the anti-inflation, tax-cutting and antigovernment policies of President Ronald Reagan and British Prime Minister Margaret Thatcher and an era of more-disciplined central banking. His ideas helped to end the military draft in the 1970s, gave birth to staple conservative causes such as school vouchers and created the groundwork for new economic views about the Great Depression, unemployment, inflation and exchange rates. Milton Friedman forever changed the ways of our economic concepts and the way economics will be viewed.

The statement social responsibilities can be met in multiple different ways, for different people. Some people believe that social responsibility goes to the people, likewise others believe it leans toward the government. In the essay of Arthur Jarvis’, there is an ability to see what Arthur Jarvis truly sees to whom the social responsibility belongs. In Arthur Jarvis' essay there are multiple ideas that were once permissible and are now longer permissible: this leads us to fully understand what his view on social responsibility

Both Milton Friedman 's essay and Reagan’s political work focus on how to achieve a successful system based on the responsibilities of the individuals. Milton’s essay emphasized the role of creating a successful business is to uses “resources and engage in activities that are designed to increase profit so long as it stays within the rules of the game” (Friedman, pg 6). Reagan’s “Farewell Address” engaged in the idea that it is the responsibilities of the citizens to work together to make the nation stay free and strong for future generations to come. “We must keep up our guard, but we must also continue to work together to lessen and eliminate tension and mistrust” (Reagan, p 411) while enforcing the necessary actions to finish the job of

Corporate social responsibility means that businesses have wider responsibilities than simply to their shareholders – they also have responsibilities towards other stakeholders, as well as the environment. Scholars such as Robert Solomon believe that businesses should take on these responsibilities, as they have a duty to behave ethically. Solomon believed that a person should follow their own personal values and attempt to stay ethical no matter whether they are at home or at work. Others, such as Milton Friedman and former British Prime Minister Margaret Thatcher, argue against the idea of corporate social responsibility, believing that the only responsibility of a business is to increase its profits for its shareholders. Friedman went on to argue that for a business to take money from their profits to fund corporate social responsibility projects is equivalent to stealing money from shareholders and is therefore unethical. From a utilitarian perspective, the ‘greater good’ may be believed to be the greatest amount of profit, potentially leading to a ruthless attempt to maximise income. This could come in the form of using cheap labour to be able to create maximum profit for the shareholders – and, furthermore, could end up blatantly disregarding human rights. This is a major issue of utilitarianism – basing ethical decisions on goodness for the greatest number of people allows for a

What is Paternalism? Paternalism can be defined as interfering with a person 's freedom for his or her own good. The word calls to mind the image of a father who makes decisions for his children rather than letting them make their own decisions, on the grounds that "father knows best." The principle of paternalism underlies a wide range of laws, practices, and actions„ a physician who decides what is best for a patient, a sign prohibiting swimming without a lifeguard on duty, laws against voluntary euthanasia, laws restricting the use of heroin, cocaine, marijuana and other drugs, compulsory retirement savings plans, and mandatory seat belt laws all designed to protect our interests, whether we like it or not. Paternalism involves a conflict

Milton Friedman revolutionized free market thinking. He believed in a free market as the best solution for the stability of an economy. Basing his theories on Adam Smith’s “invisible hand”, Friedman further developed Smith’s theory. In short, Friedman’s Neoliberalism can be described through one of his quotes on the social responsibility of business, “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” (Cooney, 2012). Friedman’s belief of the market’s perfection is based on the assumption that no actor would agree to a transaction if they did not find it fitting for themselves (Friedman, 1975). In other

The primary fiduciary duty is the duty of loyalty. Therefore, the company should not engage in transactions that involve risk or a conflict of interest. In recent years many Corporate directors have jumped on the Corporate Social Responsibility bandwagon as a personal pet project and did not consider whether it is for the good of the stakeholders. A corporate executive is an employee of the owners of the business. He has direct responsibility or duty of care to his employers. The responsibility is to maximize profits for their company 's shareholders. Corporate directors also owe stakeholders a duty of care that is to say, a duty to make informed decisions for the benefit of the stakeholders. During the recent financial crisis, there was so much risk taken by greedy managers that when stakeholders lost money and it was revealed Directors were getting rich by the decisions then in response legislation had to address the need for increased risk assessment in our financial institutions, requiring increased disclosure to ensure that Directors would act morally, ethically and

Corporate directors must pursue the best interests of the “corporate person,” serving as “trustees” of the stockholders. This requires the fulfillment traditional duties

Even though economical and legal responsibilities exemplify about fairness and justice, ethical responsibilities cover those activities and practices that are expected or prohibited by members of society even though they are not codified in law. Ethical responsibilities represent those norms, standards or expectations that reflect a jest of what employees, consumers and shareholders regard as just, fair or in keeping the protection or respect of stakeholders’ moral rights. They are important to perform in a manner consistent with expectations of societal and ethical norms. The firms should recognize and respect the ethical moral norms adopted by society from time to time. In order to achieve corporate goals, these

From Milton Friedman’s view, maximizing profit is the only focus of any business corporation, so long as it does not violate the state’s laws and the fundamental rules of society. Most firms are disposed to agree the above statement, thinking that business as a whole should not perform social responsibility at a cost of shareholders ('Shareholder value or social responsibility?', 2007). However, the case of ‘Brent Spar’ revealed the failure of corporate social responsibilities, showed that complying with the legislative requirements is insufficient from the view of the