Should Businesses Operating Today in New Zealand Go “Beyond Profits”?
In 1970, it was argued by Nobel Prize-winning economist, Milton Friedman, that the only social responsibility of business is to increase its profits (Friedman, 1970). Since Friedman expounded his widely acclaimed philosophy on the social responsibility of business, many experts in the area of business and social responsibility have retaliated with their own views on corporate social responsibility (CSR). One of these views is the idea that businesses should go beyond the classic economic paradigm, a-la Friedman, to carry out certain responsibilities to society such as ethical and philanthropic responsibilities (Carroll, 1991). In order to have a better understanding of one’s position on the CSR debate, this essay will specifically target the corporate social responsibilities of businesses within a general New Zealand context so that one might precisely answer the question “Should Businesses Today Operate beyond Profits”?
“Responsible governance” in New Zealand (NZ) management is equivalent to the organization’s “environmental, social and risk management practices and the interests of its shareholders and increasingly wide stakeholders (Birchfield, 2011). The definition of responsible governance seems to be in favor of the CSR position as businesses in NZ are clearly obliged to more responsibilities other than Friedman’s ultimate profit-maximizing goal. However, a resent consensus in the business consulting and corporate analysis marketplace shows that less than half of NZ listed companies have supplied reasonable evidence of accountability for any environmental, social and governance (ESG) risk rating (Birchfield, 2011). Does this mean that over 50% of companies in NZ are socially irresponsible? Before jumping into conclusions, one must first define and classify the ESG practices under the