Friedman M 1970 September 13 The Social Responsibility Of Bu

Friedman M 1970 September 13 The Social Responsibility Of Busine

Analyze the concept of corporate social responsibility (CSR) in the context of Milton Friedman's 1970 assertion that "the social responsibility of business is to increase its profits." Discuss how this view has been challenged or supported by subsequent academic and practical perspectives, including modern trends in CSR, ethical considerations, and the role of corporate reputation. Include references to scholarly sources and real-world examples to substantiate your analysis and evaluate the implications for business conduct and societal expectations.

Paper For Above instruction

The debate surrounding corporate social responsibility (CSR) remains a central theme in the discourse on ethical business practices and sustainable corporate growth. Milton Friedman's influential 1970 assertion that the primary responsibility of business is to increase profits has shaped much of the economic and ethical debate over the past decades. This perspective, rooted in classical economic theory, emphasizes shareholder value maximization as the ultimate goal of corporate activity, positing that fulfilling societal needs falls outside the domain of business, or can be adequately addressed through government intervention and societal institutions (Friedman, 1970).

Friedman's doctrine has been both challenged and supported by diverse academic viewpoints and evolving business practices. Critics argue that an exclusive focus on profit undermines ethical considerations, environmental sustainability, and social well-being. For instance, Micewski and Troy (2007) revisit business ethics from a deontological perspective, emphasizing that ethical duties are inherent and must be upheld regardless of profit outcomes. Likewise, Schaefer (2008) critiques the traditional shareholder model, advocating for a broader stakeholder approach that recognizes the interests of employees, communities, and the environment as integral to business responsibility.

Modern trends in CSR highlight a shift toward integrating ethical considerations into core business strategies. Companies increasingly recognize that responsible practices can enhance reputation, mitigate risks, and foster long-term profitability. Spence (2011) illustrates this in the oil and gas industry, where reputational risk associated with environmental incidents compels firms to adopt more sustainable and transparent practices. Similarly, Verschoor (2010) discusses how BP's ethical missteps, particularly following the Deepwater Horizon disaster, can significantly damage shareholder value and corporate reputation—highlighting the importance of ethical lessons in maintaining stakeholder trust.

The evolution of CSR reflects a broader societal expectation that businesses should contribute positively to social and environmental issues. Universities and research institutions have contributed to this understanding by defining CSR as a comprehensive, stakeholder-inclusive approach that balances economic, social, and environmental objectives (What is corporate social responsibility?, 2019). This perspective aligns with the principles of sustainable development, emphasizing that responsible enterprises must operate ethically and consider the long-term impact of their actions.

Case studies exemplify how businesses are adapting to these contemporary expectations. Danzig (2012) examines corporate ethics through the lens of trust, emphasizing that societal trust is foundational for sustainable business success. Gebler’s blogs (2010) analyze ethical dilemmas faced by corporations such as Toyota and Goldman Sachs, shedding light on corporate culture and societal expectations in times of crisis. Kaye (2015) explores BP’s efforts to repair its damaged reputation post-Deepwater Horizon, illustrating how ethical lapses can have profound financial and societal consequences.

Despite these developments, opponents of expansive CSR initiatives argue that overemphasis on stakeholder interests can lead to diluted corporate focus, increased costs, and potential managerial overreach. Friedman (1970) warns that businesses diverting resources toward social goals threaten economic efficiency and may foster superficial corporate social responsibility initiatives lacking genuine commitment. Nonetheless, the contemporary consensus suggests that responsible business conduct entails a strategic integration of social and environmental considerations to create shared value for companies and society alike.

In conclusion, Friedman's view remains influential, but today’s business environment requires a more nuanced understanding of corporate social responsibility. Ethical considerations, reputational risks, and societal expectations demonstrate that responsible business practices can be aligned with profitability and long-term success. As stakeholders become more conscious of corporate impacts, companies must navigate a complex landscape where social accountability and economic performance are intertwined. Developing effective CSR strategies that incorporate ethical principles and stakeholder interests is essential for sustainable corporate evolution and societal well-being.

References

• Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. New York Times Magazine.
• Barlas, R. (2016). Friedman's theory of social responsibility for business in the 21st century. J. of Integrated Stud., 8(1).
• Lange, D., & Washburn, N. T. (2012). Understanding attributions of corporate social irresponsibility. Academy Of Management Review, 37(2).
• What is corporate social responsibility? (2019). University of Edinburgh.
• Micewski, E. R., & Troy, C. (2007). Business ethics - deontologically revisited. Journal of Business Ethics, 72(1), 17-25.
• Schaefer, B. P. (2008). Shareholders and social responsibility. Journal of Business Ethics, 81(2).
• Spence, D. (2011). Corporate social responsibility in the oil and gas industry: The importance of reputational risk. Chicago-Kent Law Review, 86, 59-85.
• Verschoor, C. C. (2010). BP still hasn't learned ethical lessons. Strategic Finance, 92(2), 13-15.
• Halbert, T., & Ingulli, E. (2008). Law & ethics in the business environment (6th ed.). Mason, OH: South-Western Pub.
• Gebler, D. (2010, April 14). Banana logic. Blog: Business Ethics, Culture and Performance.
• Gebler, D. (2010, April 19). Toyota ethics: Questions to get answers. Blog: Business Ethics, Culture and Performance.
• Gebler, D. (2010, April 28). Goldman Sachs – Trust, corporate culture and societal expectations. Blog: Business Ethics, Culture and Performance.
• Danzig, J. (2012, August 6). Jon Danzig asks about business ethics. YouTube video.
• Kaye, L. (2015, February 19). Five years after Deepwater Horizon, can BP repair its reputation? Sustainable Brands.