Corporate Social Responsibility (CSR) And Global Citizenship

Corporate Social Responsibility Csr And Global Citizenship Please

"Corporate Social Responsibility (CSR) and Global Citizenship" Please respond to the following: For this week’s post discuss the pros and cons of CSR, but with a twist. Students whose last name ends in M - Z will post their initial response to this question from a Con perspective - who believe, as Milton Friedman does, the 'business of business is business '. Make your case whether business should focus on maximizing their investors' returns ( Con ) or balance their responsibility to their investors with their responsibilities to their other stakeholders ( Pro ). List at least two examples that support your position . Be sure to use terms and resources from Chapter 3, to demonstrate your understanding of corporate social responsibility.

Chapter 3 has been attached. Please respond to this discussion from a Con perspective.

Paper For Above instruction

Introduction

The debate over Corporate Social Responsibility (CSR) and the role of businesses in society has been ongoing for decades. While many advocate for a balanced approach that considers multiple stakeholders, a significant perspective, historically championed by Milton Friedman, asserts that the primary obligation of a corporation is to maximize shareholder value. This paper adopts a con perspective, emphasizing that businesses should prioritize the interests of their investors above other concerns, aligning with Friedman’s classical view that "the business of business is business." The discussion will explore the rationale behind this stance, supported by pertinent examples and concepts from Chapter 3.

Friedman’s Perspective on Business and Society

Milton Friedman argued that the primary responsibility of a corporation is to its shareholders, whose investments fund the company’s operations and growth. He contended that engaging in CSR initiatives or efforts to address social issues divert management’s focus from their fundamental goal: maximizing profits. Friedman believed that corporate executives, when investing company resources into social causes, are spending shareholders’ money without explicit consent, which infringes upon shareholder rights and distorts market mechanisms. This perspective emphasizes the importance of economic efficiency, free markets, and minimal government intervention, asserting that these are the most effective means to create wealth and improve societal well-being indirectly.

The Case for Prioritizing Shareholder Returns

From a con viewpoint rooted in Friedman’s philosophy, businesses should focus primarily on maximizing returns for their investors. This approach aligns with the principles of free-market economics, asserting that wealth creation through profit maximization ultimately benefits society as a whole. As Friedman (1970) argued, corporations that prioritize social goals at the expense of profitability risk inefficiency and reduced competitiveness, which can lead to job losses and diminished economic growth. Two examples illustrate this viewpoint:

1. Enterprise's Focus on Profitability Over Social Initiatives: Consider a manufacturing company contemplating investing in costly environmental sustainability programs. While environmentally friendly practices are commendable, such initiatives may divert funds from core business activities, potentially increasing costs and reducing competitiveness. Friedman’s argument suggests that such investments should be driven by profit potential rather than social concerns, ensuring the company's survival and the investors' returns.

2. Stock Market as a Signal of Business Health: Public companies are subject to stock market evaluations that reward firms demonstrating efficient management and profitability. Excessive focus on CSR might distract management from operational efficiency, risking lowered share prices. For instance, a company that diverts resources into social projects at the expense of innovation may see its competitive edge erode, leading shareholders to experience losses—supporting the idea that investor interests should take precedence.

The Limitations of CSR from a Con Perspective

Critics from this perspective argue that CSR can lead to managerial overreach, where business leaders pursue social goals that may conflict with shareholder interests. Furthermore, CSR may introduce inefficiencies and reduce a company's agility in adapting to market conditions. These concerns are reinforced by resource-based view theories discussed in Chapter 3, which emphasize core competencies that generate competitive advantage—resources that could be compromised by diverting attention toward socially driven projects.

Counterarguments and Rebuttal

Advocates for CSR contend that businesses have a moral obligation to contribute positively to society, arguing that corporate actions significantly impact environmental sustainability, social equality, and community development. Nonetheless, from a con perspective, these initiatives risk diluting the primary purpose of business—profit maximization. While socially responsible actions may yield long-term benefits, such benefits are often uncertain and difficult to quantify, thereby justifying a focus on immediate financial performance.

Conclusion

In conclusion, from a con perspective aligned with Milton Friedman’s view, businesses should prioritize maximizing shareholder value over broader social responsibility initiatives. This approach ensures market efficiency, stimulates economic growth, and ultimately benefits society indirectly by creating jobs, wealth, and innovation. While CSR can offer intangible benefits, the potential costs and risks—such as diverting resources from productive activities and compromising competitiveness—underscore why the primary purpose of business remains profit generation for its investors.

References

• Friedman, M. (1970). The Social Responsibility of Business Is to Increase Its Profits. The New York Times Magazine.
• Crane, A., Matten, D., & Spence, L. J. (2014). Corporate Social Responsibility: Readings and Cases in a Global Context. Routledge.
• Carroll, A. B. (1999). Corporate social responsibility: Evolution of a definitional construct. Business & Society, 38(3), 268-295.
• McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), 117-127.
• Baron, D. P. (2001). Private politics, corporate social responsibility, and integrated strategy. Journal of Economics & Management Strategy, 10(1), 7-45.
• Porter, M. E., & Kramer, M. R. (2006). Strategy & society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78-92.
• Schreck, P. (2011). The business case for corporate social responsibility: A review of concepts, research and practice. European Management Journal, 29(1), 1-15.
• Freeman, R. (1984). Strategic Management: A Stakeholder Approach. Pitman.
• Vogel, D. (2005). The market for virtue: The potential and limits of corporate social responsibility. Brookings Institution Press.
• Waddock, S. (2004). Creating corporate accountability: Foundational concepts for corporate social performance. Business and Society, 43(1), 47-66.