“In [a free economy] there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” (Friedman, Capitalism and Freedom, 1962.) Discuss.
Proponents of this perspective argue that businesses exist to create value for their shareholders, and that by focusing on profits, they are serving the best interests of their stakeholders. They argue that if businesses are fre
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However, critics of Friedman’s view argue that it is too narrow and simplistic. They argue that businesses have a broader social responsibility beyond just generating profits, including responsibilities to their employees, customers, and the communities in which they operate. They argue that businesses have a duty to act ethically, to minimize harm to the environment, and to promote social and economic justice.
Moreover, they argue that businesses are not isolated entities operating in a vacuum, but rather are embedded in a broader social context. Businesses depend on the infrastructure, institutions, and legal frameworks created by society, and in turn, they have a responsibility to contribute to the well-being of society.
Therefore, the debate over the social responsibility of business is complex, and there are no easy answers. While the pursuit of profits is essential for the long-term survival of businesses, they should also recognize their broader responsibilities to society and strive to balance their economic objectives with their social obligations. Ultimately, businesses must find a way to navigate this complex landscape while remaining competitive and profitable.