the only role of business is to maximize profits. Discuss
I believe that almost all of the corporation’s goal is to maximize their profit. Companies may take different approaches to maximize profit or minimize loss based on their own organizational strengths in order to achieve their goal. Indeed, everyone can understand how important does making profits meant to a company. Making profits not only benefit the business owners and also indicate to shareholders how well performed the company is. According to Lord Holme and Richard Watts, corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
There are two schools of thought in corporate social responsibility which is ‘narrow’ view and ‘broad’ view. Narrow view says that a corporation should only concentrate on maximizing profits. Milton Friedman (1970) argues that ‘There is one and only one social responsibility of business is to use its resources and engage in activities designed to increase its profit so long as it stays will the rules of the game, which is to say, engages in open and free competition, without deception or fraud.’ In simple terms, the purpose of businesses is to make profits for its shareholders while management’s only duty is to shield shareholders’ interests. In my point of view, I don’t agree with narrow view as I don’t think a business should only focus on making profits and neglect other responsibilities. I believed that a company can still earn profits when they concentrate on responsibilities.
On the flip side, broad view stated that a corporation have other responsibilities to focus on too in addition to earning profits. Corporations have social obligations as all existing participants of market, persons and entities are tied together and are mutually dependent. So corporations cannot ignore some serious events or problems, which take
There are two schools of thought in corporate social responsibility which is ‘narrow’ view and ‘broad’ view. Narrow view says that a corporation should only concentrate on maximizing profits. Milton Friedman (1970) argues that ‘There is one and only one social responsibility of business is to use its resources and engage in activities designed to increase its profit so long as it stays will the rules of the game, which is to say, engages in open and free competition, without deception or fraud.’ In simple terms, the purpose of businesses is to make profits for its shareholders while management’s only duty is to shield shareholders’ interests. In my point of view, I don’t agree with narrow view as I don’t think a business should only focus on making profits and neglect other responsibilities. I believed that a company can still earn profits when they concentrate on responsibilities.
On the flip side, broad view stated that a corporation have other responsibilities to focus on too in addition to earning profits. Corporations have social obligations as all existing participants of market, persons and entities are tied together and are mutually dependent. So corporations cannot ignore some serious events or problems, which take