...Social Responsibility of Business Introduction What is the social responsibility of a business? Is it to increase its profits as Milton Friedman affirms? Before starting any debate about this topic, first let’s see what its definition is. According to the Business Dictionary, social responsibility is an “obligation of an organization's management towards the welfare and interests of the society which provides it the environment and resources to survive and flourish, and which is affected by the organizations actions and policies. 1 ” Furthermore, 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. 2 ”These two definitions are in total opposition to Friedman’s statement. Never the less, I do think that any corporation can be social responsible in terms of these opposing points of view at the same time. In this essay, I will first present a summary of the article of Milton Friedman; then I will express my personal reflection on the topic and tell why a corporation can comply with both positions simultaneously Milton Friedman in his article “The Social Responsibility of Business is to Increase its Profits” states that only people can have responsibilities, and that there is not such a thing like social responsibility of business. A corporation, according to Friedman, is an artificial person and, therefore, may have artificial...
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...Seminar Paper Social Responsibility of Business Social Responsibility of Business Name= Bisweswar Chakraborty BBA, 4th Semester, 2nd year * Introduction :- * Social Responsibility :- Social responsibility is an ethical theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. In our daily life, you perform a number of activities. For example, brushing our teeth, showing respect to elders obeying traffic rules on road etc. Now why do we perform all these activities? It is because we live in a family as well as in a society and the members of our family as well as the society want to do all of them. They do several things for us and expect something from us, which you must do. The expectations of the family or society become our obligations, which you need to fulfill. For example, keeping the road clean by not throwing garbage on it, etc. There are also obligations towards our self, which you need to fulfill. For example, taking food timely, going to sleep early at night, etc. that keep you fit and takes care of your health. Now we fulfill all these obligations by performing certain activities which are called our responsibilities. Any responsibility we have, particularly towards members of the society with whom we interact or towards the...
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... Arts ,Science & Commerce College ,Chopda Social Responsibilities of Management * INTRODUCTION Business enterprises are creatures of society and should respond to the demands of society. If the management does not react to changes in social demands, the society will either force them to do so through laws or will not permit the enterprise to survive. Therefore the long-term interests of business are best served when management assume social responsibilities. The image of business organization liked with the quality of its products and customer service and the extent to which it fulfills the expectations of owners, employees, consumers, government and the community at large. For long-term success it matters a great deal if the firm has a favorable image in the public mind. Every business enterprise is a organ of society and its activities have impact on the social scene. Therefore, it is important for management to consider whether their policies and actions are likely to promote the public good, advances the basic values of society, and constitute to its stability, strength and harmony. Increasing concern for the social responsibility of management, it is now recognized that besides taking care of the financial interest of owners, managers of business firms must also take into account the interest of various other groups such as employees, consumers...
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...Critical Analysis: "The Social Responsibility of Busine Critical Analysis of "The Social Responsibility of Business" from Milton Friedman In this essay I evaluate Milton Friedman’s essay: “The Social Responsibility of Business Is to Increase Its Profits” in 1970, on the Social Responsibility of a business and his theory, which is called the “Efficiency Perspective”. In every article and book that I have read about social responsibility, Friedman’s “Efficiency Perspective is placed centrally. During my research I found that Friedman is often criticised for being too classical. Friedman believes that manager’s foremost objective or even moral obligation to the firm should be to maximise profits always. There is however one condition that makes his perspective more complicated, not only for me, but also for several well-known authors. According to Friedman, the managers obligations should be carried out: “…while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom”. This leads to one of the main questions of my essay: To what extent does Friedman’s “Efficiency Perspective” give foundation for responsible and moral international management behaviour? And need we any concern if it fails to do so? To fully answer the questions, I first need to explain the two different parts of the first question: responsible international management behaviour and moral international management behaviour. In businesses nowadays they...
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...Social Responsibility of Businesses 22 September 2013 Social Responsibility of Businesses Social responsibility of businesses is the obligation of businesses to help improve the economy, the quality of life of its employees, and the surrounding communities. It is “an organization’s initiatives to assess and take responsibility for its effects on the environment as well as its impact on social welfare.” (Grantham, 2013) A company that continually gets involve with social events and support the communities often gains the trust of consumers. An organization’s reputation can be boosted by demonstrating good social responsibility and good will toward the community. This paper will discuss how being socially responsible can help businesses retain employees, attract customer, and cut business cost. Social responsible companies often increase employee loyalty and job performance. “Employees are the heart and soul of your organization. They produce the products and services that your organization offers. If you take good care of them, employee turnover will be lower, productivity will be higher, and fraud/theft will decline.” (Ventureneer, 2013) Companies that appreciate and value their employees by providing them competitive wages, benefits, and awards then they are a social responsible organization. When companies invest into their staff with quality training, and growth opportunities then employees are more likely to stay with the company. As other people...
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...The Social Responsibility of Business: A Review. Maz Demosthenous School of Commerce The Flinders University of South Australia GPO Box 2100 Adelaide South Australia 5001 Telephone: +61 8 82013896 Facsimile: +61 8 82012644 Email: Maz.Demosthenous@flinders.edu.au SCHOOL OF COMMERCE RESEARCH PAPER SERIES: 00-8 ISSN: 1441-3906 For many, the view that the main goal or purpose of business is to make as much money as possible is accepted as a matter of fact and is beyond debate. To go further and say that the social responsibility of a business is also just to make a profit is open to debate. The aim of this paper is to discuss the various views of the responsibility of business, and to consider where accounting fits in. In addition, to explore the ethical responsibilities that a corporation may have beyond making profits for its stockholders. The Friedman view Milton Friedman’s view is that in a capitalist economy, there is one and only one 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 (Friedman, 1983). When one is looking at the responsibilities of an individual or an organisation they must first examine their roles. The directors of companies have a fiduciary responsibility to act in the best interest of the shareholders. The managers are agents of the shareholders...
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...Forum 1 Unethical and Unlawful Behavior Unethical behavior is business conduct that employers encourage employees to refrain from in order to promote honest business dealings in the workplace. Unethical behavior however, does not always mean a violation of the law. Unlike unlawful behavior which is the violation of a constitutional law that is punishable by the legal system, unethical behavior is associated more with a set of values or a “source of guidance beyond enforceable laws” (Salvatore, 2015 p. 20). Corporate Social Responsibility Consumers find it difficult to trust corporate America after the exposure of countless fraudulent business transactions over the last two decades. The expectation for corporations to be ethical, forthright, and socially responsible seems to be an unrealistic expectation. The suggestion that making a profit should be the only social responsibility for business owners a lack of concern for the society and individuals from which those profits are made. It is because of statements like this one made by Milton Friedman that the concept of corporate social responsibility evolved. The “term is a generous one that encompasses various overlapping areas, such as corporate citizenship, stakeholder theory, business ethics, and corporate sustainability” (Popa & Salanta, 2014 p.138). I agree that corporations should make a profit; however that should not be their only responsibility. When one becomes consumed with self, judgment becomes cloudy. Scripture...
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...Business Ethics and Social Responsibility Apparently, the concept of social responsibility refers to the means of achieving full sustainability through the adoption of the Triple-Bottom-Line (TBL) concept. Any viable organisation will enhance and facilitate long-term viability and success through the critical adoption of fundamental social responsibility principles such as transparency and accountability (Benn & Bolton, 2011). For instance, in the year 2010, the international organisation for standardisation gave out an international standard, which could help other organisations in addressing and accessing their social responsibility. Further, it is through critical and careful attention to impacts on the environment and the entire society that various organisations are able to achieve their sustainability. Through such scenario frequencies, any organisation can spur growth and development within the shortest time possible. Embracing the culture of transparency and positive ethics enhances and facilitates an approach that helps in the protection of the long-term success of both the environment and organisational success (Benn & Bolton, 2011). Social responsibility Social responsibility on a personal or corporate level means having a passionate commitment to act in an ethical and sensitive manner to alleviate poverty from society without destroying the cultural values and environmental settings of the community, and ensuring economic benefits to the organisation that...
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...Rethinking the Social Responsibility of Business From Reason (October 2005) Making Philanthropy Out of Obscenity -Milton Friedman By pursuing his own interest [an individual] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. -Adam Smith, The Wealth of Nations The differences between John Mackey and me regarding the social responsibility of business are for the most part rhetorical. Strip off the camouflage, and it turns out we are in essential agreement. Moreover, his company, Whole Foods Market, behaves in accordance with the principles I spelled out in my 1970 New York Times Magazine article. With respect to his company, it could hardly be otherwise. It has done well in a highly competitive industry. Had it devoted any significant fraction of its resources to exercising a social responsibility unrelated to the bottom line, it would be out of business by now or would have been taken over. Here is how Mackey himself describes his firm's activities: 1. "The most successful businesses put the customer first, instead of the investors" (which clearly means that this is the way to put the investors first). 2. "There can be little doubt that a certain amount of corporate philanthropy is simply good business and works for the long-term benefit of the investors." Compare this to what I wrote in 1970: "Of course, in practice the doctrine of social responsibility...
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...The Social Responsibility of Business is to Increase Profit What is the social responsibility of a business? Is it to increase profits as American economist Milton Friedman argues? Is it to make decisions that benefit and protect 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 maximise profits”. In my view the statement ‘the social responsibility of business is to increase profit’ is true to an extent, however, I believe a corporation’s responsibilities extend beyond just maximising profits. The ‘Narrow View’ argues that profit maximisation is the only objective for a business. Theodore Levitt 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” Levitt’s opinion could be perceived as realistic to an extent, however, I believe he doesn’t take into account the negative side-effects that business activities can have on society. Friedman strongly rejects any concept of corporate social responsibility that would deter a business’s primary goal of profit maximisation. Furthermore, he argues that only people can have responsibilities, not an artificial being such as a corporation. If an artificial being such as a business was to have responsibilities, however, than I would find it appropriate that it would be inclined to...
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...The concept of social responsibility of business organizations. It is common knowledge, that behavior of an organization has important economic, social and political consequences. In today’s capitalist society, any business organization has primary responsibility for organizing the economy of the country. The USA is a country that has formed a solid capitalistic society over the centuries and gaining profit is the main goal of most of the organizations. Every businessman is eager to get a profit from what he does and any volunteer activities are very often viewed as a good means of marketing. Time is money, this is the main credo of American society. These facts will help us analyze the definition of social responsibility of organizations in today’s society. Social responsibility can be described in different ways. Most of the business organizations perform only social obligations, which means that a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities. Basically, the organization does what it’s obliged to do and nothing more. This is a classic view of social responsibility. The most outspoken advocate of this approach is Milton Friedman, a great economist and Nobel laureate. He believes that the primary responsibility of an organization is to operate in the best interests of stockholders, whose primary concern is financial. The other two concepts- social responsiveness and social responsibility reflect the socioeconomic...
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...|BUSINESS ETHICAL BEHAVIOR & CORPORATE SOCIAL RESPONSIBILITY | | | |Student’s Name:Renee Giordani | | | |Course Title:Sales Management | | | |Professor:Gene Dichiara | | | |SUNY EMPIRE STATE COLLEGE | | | |Date: December 09, 2014 | Business Ethical Behavior & Corporate Social Responsibility: Why Organizations Must Have IT Corporate Social Responsibility has gradually developed into one of the greatest ethical aspects that have to be adhered...
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...Business Ethics and Corporate Social Responsibility Business Ethics and Corporate Social Responsibility The Business Ethics and Corporate Social Responsibility (CSR) article focuses on the dilemma between business ethics and social responsibility in business organizations. Issues related to social responsibility and sustainability are becoming more important in today’s economic and social environments, especially in the business sector. The article makes the case that ethics and the corporate responsibilities are inter-related. “Business goals are inseparable from the societies and environments with in which they operate.” The author states three reasons why social responsibility and business ethics are important: 1) People want to buy from ethical businesses. Companies have to satisfy their customers and achieve their main goal of earning a profit. 2) People want to work for ethical businesses. Employees in ethical businesses are more likely to work harder for the same or sometimes less pay than their “cut-throat counterparts. 3) People want to partner with ethical businesses. Businesses partner with socially responsible and ethical businesses more frequently than other less socially responsible organizations. The article concludes that many organizations are aware of the critical need for ethics in their business culture; however, there is still room for improvement. “Progress is limited by the reality that CSR remains a purely voluntary, self-regulated...
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...Ethics and Social Responsibility in Business Strategic Planning MGT/498 June 20, 2014 Company stakeholders may not only be investors in a company they may also have voting power that can influence the social and financial impact of a company. With this voting power comes a social responsibility to the employees, customers and anyone associated with the company. The company's bottom line is not the only thing that must be considered when using their influence to shape company goals. Ethics, social responsibility and planning Strategic planning is the process of creating a mission statement, vision statement, policies, and functional decisions to ensure a company’s success. Since, the company’s success is the vital interest of the stakeholder, certain considerations must be taken into account in the planning process. Ethics are usually seen as “doing the right thing”. In business it can be much more than that. Companies could do all the write things but the outcome could be on that does not benefit everyone; it only benefits a certain group within the organization. For example, stakeholders may have the opportunity to increase their own wealth if they push to merge the company's subsidiaries into the parent company. This merger, however, could limit the company's ability to serve multiple markets, hinder its product diversification or create other problems. This clearly shows that the interest was not in...
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...unequally. Fairness focus on individuals, and giving them what they deserve based on merit that can be distributive, procedural, compensatory, and retributive. Business ethics is the moral principles and standards that guide behavior in the world of business (Jennings, 2010). Corporate social responsibility is the obligation toward society assumed by business. The business maximizes it positive effects on society and minimizes it negative effects. An illustration of an ethical and social responsibility issue related to the textile manufacturing business. In today’s global business, where large multinational corporations like the textile industry face charges of violating human rights in third world countries. Using child labor questions the human rights, ethics, and social responsibility of the textile manufacturing industry. An analysis of how the textile manufacturing illustration applies to decision-making and operations in an ethical and social responsible business. The economic responsibilities of the business would produce products and services that society wants at a price that perpetuates the textile business. The textile manufacturing business decides on legal responsibilities where they obey local, state, federal, and global laws. The textile manufacturing business makes decisions based on their ethical responsibilities of meeting other societal...
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