The Only Rule of Business Is the Increase of Profits

Tutorial 3 1.) “The only rule of business is the increase of profits.” Discuss. We are now discuss about the rule of business, is it just maximize profit without any moral responsibility? Or we need to make decisions that protect and benefit society? According to the Dictionary of Finance and Investment Terms, social responsibility is the “principle that businesses should actively contribute to the welfare of society and not only maximize profits”. We don’t have “absolutely” in the world, but we still can argue that which one better or which view we would like to use in the society.
The rival views of corporate responsibility have narrow view and broad view. . These views consider issues based on mere “profit maximization” and "community service". I am more inclined to endorse Broad view. In my view the statement ‘the social responsibility of business is to increase profit’ is true to an extent (broad view), however, I believe a corporation’s responsibilities extend beyond just maximizing profits (narrow view). Milton Friedman is one of the economists who strongly support ‘narrow view’. He wrote, “In the end business has only two responsibilities- to obey the elementary canons of face-to-face civility (honesty, good faith and so on) and to seek material gain” here we see the freedom defined in contractual relationships that exist within the “rules of the game”. His opinion might be can look upon as realistic to an extent, however, I believe he doesn’t take into consider the negative side-effects that business activities can have on society. Hence, I would find it appropriate that it would be inclined to act in a way of the interest of the corporation by increasing profits for workers and shareholders. However, a corporate executive with said “social responsibility” would be acting in some way that is not in the interest of employers, for example, refraining from increasing the price of products to prevent inflation, even though an increase in