friedman vs carroll

Topics: Business ethics, Ethics, Management Pages: 11 (965 words) Published: February 10, 2015
Unit III Assignment
Friedman Vs. Carroll
Responsibilities of Business Firms to Society
MBA 5101 - Strategic Management and Business
Policy
February 1st, 2015

Friedman’s View of Business Responsibility
Milton Friedman’s theory on business responsibility is grounded on his belief that the only social responsibility of a business is to use their resources and engage in activities that legally generate profit for shareholders. Friedman believes that: • Businesses should engage in “traditional” functions of business. • Businesses should not feel an obligation to engage in causes that promote social responsibility.

• Businesses should engage in legal activities that produce profit for shareholders and promote business growth.
• Businesses should not use resources to benefit social causes. • Business resources used for social interest will lead to increased business costs, and a reduction of resources needed for investment and research.

Friedman’s View of Business Responsibility (cont.)



Businesses should solely focus on profits, as long as it is done in a legal and free market.



Businesses should focus on making profits, but their activities should remain within the bounds of the legal system.



Businesses should also follow the informal rules and ethics of business behavior.

Milton Friedman was quoted saying: "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 open and free competition without deception or fraud.“

Archie Carroll’s view on Business
Responsibility
Carroll believed that although an organization’s initial responsibility is to make profits to satisfy their economic responsibilities, business managers should also fulfill legal, ethical and discretionary responsibilities to remain in existence. • Economic responsibilities should focus of an organization should be focused on producing goods and services that benefit society and profits shareholders and creditors.

• Legal responsibility defined by the legal systems should be followed. • Ethical responsibility should be followed to ensure proper behavior in the society.
• Discretional responsibilities although voluntary, should be followed by organizations.

Archie Carroll’s view on Business
Responsibility
• In fulfilling ethical responsibilities, Carroll
explained that organizations should work with
communities and the employees with planning
layoff although not required by law.
• Carroll further asserted that although most of society
does not believe that businesses would follow
discretionary responsibilities such as philanthropic
contributions, unemployment training, or providing
daycare centers, it could create a positive image of
the company.

Preferred Viewpoint
If I were to choice a viewpoint that I would want to see
implemented in my place of work, it would be the Carroll point of view. I work with the United States Army and I do believe that we are guided by our mission goals, as well as legal, ethical and discretionary principles. We can only do what is permitted by the laws of our country and the commander in chief. Even though it may not be quite obvious, we are guided by some ethical and discretionary principle, but never to the extreme that it interferes with our mission and goals.

Example of Friedman Viewpoint
Friedman maintain a traditional view on business
responsibility to social causes. General Mills is a
company that is used as an example of Friedman’s claims.
General mills used millions of dollars of company money
to invest in social causes, instead of using the money to
make investment that could generate profits for
shareholders.

Example of Friedman Viewpoint
 Although we can safely say that a majority of companies following the Friedman viewpoint of making money for their shareholders and limiting...


References: Angelidis, J. P., Massetti, B. L., & Magee-Egan, P. (2008). Does corporate social
responsibility orientation vary by position in the organizational hierarchy?
Congdon, T. (2011). Milton Friedman on the ineffectiveness of fiscal policy. Economic
Affairs, 31(1), 62-65
L. Gard, “We ‘re Good Guys, Buy from Us, “ Business Week (November 22, 2004), pp.
Melo, T., & Galan, J. (2011). Effects of corporate social responsibility on brand value.
Journal Of Brand Management, 18(6), 423-437. doi:10.1057/bm.2010.54
Milton Friedman- US economist (1912-2006)
Stanwick, P. A., & Stanwick, S. D. (2009). Understanding business ethics. Upper
Saddle River, NJ: Prentice Hall.
Wheelen, T. L., & Hunger, J. D. (2010). Concepts in strategic management and
business policy: Achieving sustainability (12th ed.)
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Friedman vs. Drucker Essay
  • Friedman vs Freeman Essay
  • Essay on Friedman vs Freeman
  • Friedman vs Drucker Essay
  • Friedman
  • Friedman vs Keynes Essay
  • Friedman vs. Duiker Essay
  • Friedman Vs Head On The Effectiveness Essay

Become a StudyMode Member

Sign Up - It's Free