Business Ethics- Profit vs. Csr
In today’s globalised world where free market economies are the driving force behind companies constant pursuit of maximisation of profits, there seems to be a clear deficit of social values and commitment to serving society. This essay will turn the light on how business organisations’ ultimate aim is to generate profits and CSR activities are secondary if not often ignored. The essay takes the position that CSR initiatives are recently being acknowledged as not only beneficial to society but equally beneficial to business over the long term. The lure of quick profits has now demonstrably hurt the credibility of big businesses with disastrous consequences for business as well as society. In short, business goals must increasingly view the interest of all stakeholders as equally important if society’s faith in market capitalism is not to be completely forfeited. Hence in this essay I will argue in favour of CSR initiatives and how companies today cannot survive without fulfilling certain obligations they have towards society.
Now, let’s begin by understanding the point of view of renowned American economist Milton Friedman, he believed that maximization of profit is the key drivers or fundamental premises in a free market economy and that corporate executives were employees of the owners of the business and that their social responsibility is towards the shareholders of the company and maximizing shareholders value. In short, he argued that the social responsibility of any business was to generate profits as more profits would lead to higher dividends or capital appreciation.
(Milton Friedman, The New York Times Magazine, 13th September, 1970 )
Let’s take a look at one of the largest cases of bankruptcy that sparked off the worst financial crisis in America and world over. The Lehman Brothers bankruptcy case brought the entire world to a standstill, the company dragged the entire world into a financial crisis with over 26000 employees losing jobs and
Now, let’s begin by understanding the point of view of renowned American economist Milton Friedman, he believed that maximization of profit is the key drivers or fundamental premises in a free market economy and that corporate executives were employees of the owners of the business and that their social responsibility is towards the shareholders of the company and maximizing shareholders value. In short, he argued that the social responsibility of any business was to generate profits as more profits would lead to higher dividends or capital appreciation.
(Milton Friedman, The New York Times Magazine, 13th September, 1970 )
Let’s take a look at one of the largest cases of bankruptcy that sparked off the worst financial crisis in America and world over. The Lehman Brothers bankruptcy case brought the entire world to a standstill, the company dragged the entire world into a financial crisis with over 26000 employees losing jobs and
Bibliography: • http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html • http://www.cbsnews.com/8301-18560_162-57417397/the-case-against-lehman-brothers/ • http://www.forbes.com/sites/csr/2012/02/21/six-reasons-companies-should-embrace-csr/ • http://ebeni.wordpress.com/decisions/theories/consequences/utiliarianism/