Reference no: EM131174226

Reply given discussion post in 100 to 150 words.

Milton Friedman starts off the criticizing the businessmen who say that, business is not only concerned with making profits and also says that they take the subject of social responsibilities of a corporation seriously. He explains that corporate executives are servants of the business owners, therefore in most cases; their primary responsibility is to generate as much profit as possible for the owners. In order to become a successful corporate executive, one must produce desirable outcomes for the stockholders of the corporation.

Friedman says, "The executive is exercising a distinct "social responsibility," rather than serving as an agent of the stockholders or the customers or the employees, only if he spends the money in a different way than they would have spent it." He insists that a majority of people, given the responsibility of a corporate executive, would also make decisions that would continue to make money rather than act socially responsible, as it would otherwise raise questions on principles and consequences.

Friedman also says, "Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions." He claims that when a corporation acts socially responsible, it is because it will generally produce results that are in the best interest for the corporation.

So, Friedman argues that "social responsibility" requires the acceptance of socialist views which political principals conforms society in to believing that all individuals must serve a more general social interest.

A dilemmas I see when discussing the topic of social responsibilities of a business is that most large corporations are owned by multiple shareholders. Therefore even if 49% of the the shareholders possess goodwill and want to make decisions that are considered socially responsible, the majority 51% of the other shareholders who do not will over rule them. Capitalism allows individuals to accumulate as much wealth as possible so long as it is in accordance with the law. If majority of corporate shareholders interests lie solely to making profit, what is there to stop them? Therefore I believe that until a society has principals that emerge from the rationale of being socially responsible, there will be no change.

Discussion questions:
•Do you believe that the collective actions of individuals acting "socially responsible" can make a greater impact than a corporation?

•Do you think it is possible for there to be a political principal that can conform society to act socially responsible without having any consequences?

•Do you know any corporations that truly act "socially responsible" and make business decisions that sacrifice some of their profits? Is it possible that it may just be a cloak and is actually an act that will be of the corporation's interest in the long run?

•If you were a business owner, would you make decisions that is in the best interest of society at a loss of profits?

•If applicable, does Friedman's philosophy on social responsibility of a business make you reconsider working for a corporation?