HOW FAR DO YOU AGREE WITH THIS STATEMENT?
What is business?
Referring to Stephenson, defines business as, "The regular production or purchase and sale of goods undertaken with an objective of earning profit and acquiring wealth through the satisfaction of human wants."
According to Dicksee, "Business refers to a form of activity conducted with an objective of earning profits for the benefit of those on whose behalf the activity is conducted."
Lewis Henry defines business as, "Human activity directed towards producing or acquiring wealth through buying and selling of goods."
Generally, business is the exchange of goods or services that involve money or money’s worth as a return. The main objective of a business is the intention of earning profits as a return of a business for a person who do a business.
What is profit?
Through the InvestorWords.com, profit is “The positive gain from an investment or business operation after subtracting for all expenses which is the opposite of loss.”
For example, if you are selling goods that cost you $15 and you are selling it for $20, the difference of the cost and goods sold ($5) is the pure profit.
From our point of view, profit is not only a matter of a dollar and cents but above all, profit is also classified as the non money gain by the business activities which is also the social profit depends on the organization that runs the business.
Even though profit is the main concern of a business, other business objectives is the activity of satisfying human needs and wants which is also the social obligation at the same time.
2.0FACTS & ISSUES
An example of one country, America is based around pursing one’s own self-interests. This is how America became great. Many of the greatest inventions and companies have been developed because of self-interest. No society runs on anything else; Communists, Socialist, Democratic, they all run on different forms of self-interest.
In essence the world runs on greed. Milton Friedman put it best, “The world runs on individuals pursing their separate interest. The great achievements of civilizations have not come from the government; Einstein did not construct his theory from an order from bureaucrat, Henry Ford didn’t revolutionize the automobile industry that way (Friedman, Greed, 1979).” We believe Friedman’s view is too narrow a description of his and many other businesses’ activities. As important, he argues that Friedman’s take woefully undersells the humanitarian dimension of capitalism. In the debate that follows, we lay out his personal vision of the social responsibility of business.
The Friedman Approach
Milton Friedman is an American Economist that believed in the free market system. One of Friedman’s most influential and controversial theory’s states that business sole responsibility is to maximize profits for the stockholders, known as stockholder theory. Critiques believe that Friedman’s approach leaves out the social responsibility of businesses, due to the focus only on stockholders and profit. There is evidence to support such claim.
Friedman believes that only people have responsibilities and though “Corporations are artificial persons that may have artificial responsibilities, business as a whole cannot be said to have responsibilities even in this vague sense (Friedman, 1970).” This thought process focuses on an owner/stockholder relationship maximizing profit, and minimizing corporate social responsibility.
Thirty-five years ago, Friedman wrote a famous article for The New York Times Magazine whose title aptly summed up its main point: “The Social Responsibility of Business Is to Increase Its Profits.” The future Nobel laureate in economics had no patience for capitalists who claimed that “business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends; that business has a ‘social conscience’ and takes...