Corporate Social Responsibility
Tutorial 6 -- “The only role of business is the increase of profits”. Discuss.
Supporters of narrow view agree that the only role of business is the increase of profits. They believe that caring about the environmental, social and other problems should be the responsibility of government and non-profit making organizations sponsored by governments. (Pontinen J 2013 )
A bright supporter of the narrow view is Milton Friedman who claims that the only social responsibility a business has is to maximize the profits of its owner or shareholders. Friedman feels that as long as the corporate executive carries out these desires in a way that follows the laws and ethical customs of society, this person has fulfilled his or her duty for the society. Corporate executives are charged with earning and spending corporate money. If an executive chooses an agenda of social responsibility that is in direct conflict with the company’s agenda of profitability. They lack the nessary expertise to assign them non-economic responsibilities would be to place social welfare in the hands of inept custodians. Therefore, he only role of business is the increase of profits. (Pontinen J 2013 )
Another defender of narrow view in corporate social responsibility is famous economist Adam Smith, whose “invisible hand” argument states that if every member of society in a free market economy strives to promote his own economic interests they are led to promote the general good. Thus, corporations should not be held morally responsible for non-economic matters, to do so would distort the economic mission of business.( Dudovskiy 2012)
Conversely, the supporters of board view disagree that the only role of business is the increase of profits. The supporters of the broader view believe that profit is important but not means that the company does not has the duties or responsibility to the other. Businesses cannot make decisions which are made solely with economic point of view, because they
Supporters of narrow view agree that the only role of business is the increase of profits. They believe that caring about the environmental, social and other problems should be the responsibility of government and non-profit making organizations sponsored by governments. (Pontinen J 2013 )
A bright supporter of the narrow view is Milton Friedman who claims that the only social responsibility a business has is to maximize the profits of its owner or shareholders. Friedman feels that as long as the corporate executive carries out these desires in a way that follows the laws and ethical customs of society, this person has fulfilled his or her duty for the society. Corporate executives are charged with earning and spending corporate money. If an executive chooses an agenda of social responsibility that is in direct conflict with the company’s agenda of profitability. They lack the nessary expertise to assign them non-economic responsibilities would be to place social welfare in the hands of inept custodians. Therefore, he only role of business is the increase of profits. (Pontinen J 2013 )
Another defender of narrow view in corporate social responsibility is famous economist Adam Smith, whose “invisible hand” argument states that if every member of society in a free market economy strives to promote his own economic interests they are led to promote the general good. Thus, corporations should not be held morally responsible for non-economic matters, to do so would distort the economic mission of business.( Dudovskiy 2012)
Conversely, the supporters of board view disagree that the only role of business is the increase of profits. The supporters of the broader view believe that profit is important but not means that the company does not has the duties or responsibility to the other. Businesses cannot make decisions which are made solely with economic point of view, because they