Foreveryone human being and most corporations, the main objective ofstarting a business is to generate more profits for growth andsustenance. The goal of this paper is to discuss the views held byFriedman concerning social responsibility of business over time byproviding a follow-up response or letter to his post.
Accordingto Friedman (1970), the major responsibility of a business is toinvest in resources with a prior motive to derive profits in anon-competitive and corruption-free setting. Considering individualresponsibilities, one has to examine his roles i.e. the companydirectors have a responsibility to act in the best expectation of theshareholders. The leaders constantly work to empower and increase thewealth-base of the shareholders who in turn enhance corporate growth.Friedman (1970) argued that a corporate executive conducts businessin line with the needs of the shareholders, and that gives them asense of ownership to the business. Therefore, it is unlikely that anentrepreneur opens up a business which is not-for-profit in a capitalsociety (Friedman, 1970). Friedman’s perspective to managing abusiness entity is rather classical, challenging every firm to ensurethat the free market services are availed to aid in organizationprosperity
Responseto Friedman’s Post
DearFriedman, your views may have been (or still are) quite valuable asfar as the corporate social responsibility is concerned. However,that was then, not now! A lot has changed over the past four decades,and the social responsibility in the corporate society accompaniedthe shifts. According toMackey et al. (2014),the critics of market entrepreneurship argue that motivations ofliberal societies in making profits must be sided by a terseconsideration of the multiple issues of the market environment suchas the socio-cultural and legal factors. Similarly, Mackey (2014)clarified that there is need for urgent solutions since the currentbusiness setting is rather complex and characterized by more crisesthan during the 1970s. Therefore, a lack of strict controls on thegeneral societal production systems may feature adverse outcomes suchas environmental pollution and customer exploitation.According to Ferrell et al. (2015), providing extra environmentalinformation enables the decision makers of an organization toaccurately inform the way in which businesses are supposed to exploitthe natural resources as well as manipulate the market. In any case,that would enhance and develop good social relationships among theexisting business corporations, and that would facilitate sounddecision making and the formulation of ethical frameworks that favorsustainable development.In fact, there are many changes in the corporate relationships, withthe stakeholders presently concerned about the integrity of theentire market environment rather than the profit-oriented approach(Mackey, 2014). Several other authors argue that in the modern-dayhighly competitive atmosphere, businesses should not only base theiroperations on the interests of the stakeholders but also consider theinterest of the other subjects like the community and the government(Ferrellet al., 2015).The management should not only consider its shareholders’ decisionsbut also acknowledge the contributions of the employees, suppliers,customers, creditors, competitors, government and communities in theincome. Besides, company should not pollute the environment for thesake of making profit since they are exposing the community to healthhazards.
Overthe past, employees were told to engage their mind and body to workand check their hearts and souls at the door. Conversely, the presentchanges in the business and corporate strategy require keen attentionto the needs of the employees and other human resources. According toAburdene(2007),workers always ensure that their jobs are well done in order to earnsalaries, access security, get benefits, and be protected againstdiscriminating practices such as retrenchment. That way, therecruiting firm assures its workforce that their contributions andhigh performances are vital for the success of the firm, and thattheir welfare is the first focus area for the company (Megatrends,2010).Furthermore, the esteemed customers of the organization should betreated with a lot of respect as they are a decisive part of thestakeholder network without whom the business is renderedineffective. That is attributed to the fact that the clients deliverincome (by buying products) that is required by the business tothrive and achieve its main goal i.e. profit generation.
Inconclusion, therefore, corporations must have an additionalresponsibility to accomplish rather than only focusing on profitprofits. They have a mandate to ensure that the communities servedare boosted economically and the environment is not polluted, whichis only attainable if corporations move from a rather greedycapitalism society to the modern-day liberal civilization.
Aburdene,P. (2007). Megatrends2010: The rise of conscious capitalism.Massachusetts,U.S:Hampton Roads Publishing.
Ferrell,O. C., Fraedrich, J., & Ferrell, L. (2015). Businessethics. Boston,U.S: CengageLearning.
Friedman,M. (1970). The social responsibility of business is to increase itsprofits. NewYork, 122-124.
Mackey,J., & Sisodia, R. (2014). Consciouscapitalism, with a new preface by the authors: Liberating the heroicspirit of business.Watertown,Massachusetts: HarvardBusiness Review Press.