Milton Friedman’s Goal of the Firm
This paper is written in order to discuss Milton Friedman’s Goal of the Firm. It will discuss it’s relevancy as it applies to understanding the purpose of a business in society. It will also converse whether or not government and society has a place in expanding the Friedman Discussion.
Milton Friedman Goal of the Firm
Milton Friedman argued that a business’s only goal is to generate shareholder profit. This is stated in the very title of a New York Times article written by Milton Friedman, “The Social Responsibility of Business is to Increase its Profits”. This statement would no doubt start a myriad of discussions with in the business world. Why would Friedman take this type of right wing stand? Shouldn’t a company consider social issues in their everyday business as well?
A company does have a large responsibility to generating revenue for its shareholders. However, this does not mean that company does not have other responsibilities to consider. Companies have the responsibility of taking care of its employees. Without its employees companies can’t make money. Dr. Jan Stringer (2012) wrote that “An employee that is complacent and does not really enjoy their work, but is simply there for a paycheck usually does not produce at a high level, develops a bad attitude and generally drags a team down.” In part, they employees happy buy providing them the wages needed to be a productive part of society as well as a productive employee. Although linked to generating revenue, a company also has the responsibility of paying taxes. This is turn contributes to a societies of need of governmental funds. Without these funds a society cannot provide public services.
Friedman’s goal of the firm can be construed as selfish or greedy. Shareholder profits are important, but that is not the only social responsibility a company has. A company needs to...