Should a Business Be Held Socially Responsible?

Topics: Milton Friedman, Externality, Social responsibility Pages: 4 (1305 words) Published: April 29, 2013
Should a business be held socially responsible?
The demand for how businesses do their operations needs to change. As of right now, the business model suggests that we pursue profit by any entrepreneurial means and cut costs at any expense. For the most part businesses over the latter half of the twentieth century have based their idea of how to run a company off of Milton Friedman’s theories and classical neo-liberal economic thinking. I am suggesting however, that we take a different route for the rest of our time operating under capitalism and free market economics and take a look at other alternatives for the way in which we conduct ourselves in the business world. A business can be defined as a profit motivated organization that combines resources for the production and supply of goods and services. (AmosWEB). In more understandable terms, business can be understood as the way we function through a specific economic system. In our case, the United States operates with a mixed-market economy under capitalism, and our society abides. Society can be defined as a group of individuals who share a common belief system. (Shiraev & Levy). Our society as a whole loves capitalism. However, some unintended externalities have occurred because of the way we do business under the Friedman mentality. Friedman’s works tell us that in business, we should focus on the shareholder. In other words, put emphasis on the people who have shares in our business. More specifically, he states that we should simply focus on the economic and legal standpoints of a company to maximize profit margins. In terms of economics he meant does the firm create jobs? Does the firm provide services? Does the firm create products? In legal terms, he meant what does a company legally have to abide by when conducting their operations? I would like to tell you however that this mind frame has been going on for way too long and has got us in a place we should not be. This theory is old and...

Cited: AmosWEB. Copyright 2000-2013 AmosWEB LLC. April 20, 2013.
Carroll, B. Archie. The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders, Business Horizons. July 1991.
Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits”. The New York Times. September 13, 1970.
Shiraev, B. Eric & David, A. Levy. “Cross-Cultural Psychology”. Copyright 2010 Pearson Education Inc.
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