Business Ethics the Social Responsibility to Increase Profit

Topics: Social responsibility, Sociological terms, Corporation Pages: 2 (634 words) Published: February 23, 2011
Milton Friedman takes the position that corporations cannot be socially responsible, only people can have responsibilities. In continuing with this thought, he then suggest that social responsibility is then directed at the corporate executive of a business, not the business as a whole. The corporate executive has primary responsibility to his employers to conduct business as they see fit, and manage the business to create the most profit while following the “basic rules of society”. We must also be aware that the corporate executive, as a person and acting in his own right, may have his own social responsibilities that do not always follow those of the owners of the corporation. If the corporate executive’s ethical values differ from that of the business and he chooses to act in his own right, one that is not in the best interest of the business, he is in turn “spending the customers’ money”. The stockholders, customers, or employees should be able to choose how they wish to spend their money. It is then seen that the corporate executive is acting as a “public employee,” rather than an agent of the corporation. This can lead to a loss of both customers and employees if the corporate executive’s actions reduce corporate profit and the price of its stock. Friedman believes, in a free society, “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, engage in open and free competition without deception or fraud.” In part I disagree with Friedman, I believe that a business can and should be socially responsible, but in doing so they should still be able to meet their objectives of making a profit and keeping stockholders, employees, and customers satisfied. For example, if a company as a whole causes pollution, then the company as a whole is socially responsible to make good for what they have done, even if it is...
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