friedman vs carroll
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
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
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.)