Ethical Viewpoint
Introduction:
Corporate Social Responsibility (CSR) is always an on-going issue that companies have to cope with. What are the responsibilities that companies should take other than the maximization of return to shareholders and by taking such responsibilities, how it may affect the operation of the firms as well as how effectively such actions could have on the society. There have been two main positions on the CSR issue. The first is the Friedmanian one stating that “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 games” (published in the book “Capitalism and Freedom”). The other view is that companies can and should deviate from the goal of maximizing profit to take others responsibilities that help to promote the total welfare of the whole society. I will first discuss these two viewpoints and give my opinions on such reasons then, finally, draw up my conclusion on CSR.
Discussion of the Friedman point of view:
From the Friedman viewpoint, businessmen who seriously take the CRS such as fighting poverty, avoiding pollution… are “unwitting puppets of the intellectual forces that have been undermining the basis of a free society”. He stated that the responsibilities of a company rest mostly in hand of the sole proprietors or the corporate executives. However, while sole proprietors are individuals i.e. they can act on their own behave, for corporate executives, there are several reasons that restrict them from exercise any other responsibilities than maximizing the return to shareholders – owners of the company i.e. usually maximizing the profit.
The first reason is that in a private-property system, the executive is an employee of the shareholders, which means that he voluntarily and personally agrees to work under the direction and supervision of the shareholders in return for salary or other remunerations. Therefore, the
Corporate Social Responsibility (CSR) is always an on-going issue that companies have to cope with. What are the responsibilities that companies should take other than the maximization of return to shareholders and by taking such responsibilities, how it may affect the operation of the firms as well as how effectively such actions could have on the society. There have been two main positions on the CSR issue. The first is the Friedmanian one stating that “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 games” (published in the book “Capitalism and Freedom”). The other view is that companies can and should deviate from the goal of maximizing profit to take others responsibilities that help to promote the total welfare of the whole society. I will first discuss these two viewpoints and give my opinions on such reasons then, finally, draw up my conclusion on CSR.
Discussion of the Friedman point of view:
From the Friedman viewpoint, businessmen who seriously take the CRS such as fighting poverty, avoiding pollution… are “unwitting puppets of the intellectual forces that have been undermining the basis of a free society”. He stated that the responsibilities of a company rest mostly in hand of the sole proprietors or the corporate executives. However, while sole proprietors are individuals i.e. they can act on their own behave, for corporate executives, there are several reasons that restrict them from exercise any other responsibilities than maximizing the return to shareholders – owners of the company i.e. usually maximizing the profit.
The first reason is that in a private-property system, the executive is an employee of the shareholders, which means that he voluntarily and personally agrees to work under the direction and supervision of the shareholders in return for salary or other remunerations. Therefore, the