Social responsibility is a heavily disputed topic in the world of business and economics. John Mackey, co-founder of Whole Foods Market, claims that a business has multiple social responsibilities to each of its shareholders. He includes customers, employers, investors, and the community as part of the business’ stakeholders and claims that in fulfilling the needs of each group, the company must be mindful of the values of the other groups. On the other hand, Milton Friedman claims that there is no social responsibility of business, and that social responsibility falls on the government instead. Lastly, there is T.J. Rodgers who leans towards the arguments made by Friedman and objects against Mackey’s philosophy of altruism ahead of individual
…show more content…
This is because, as Friedman says, an executive should be selected based on his ability to run a business, and not based on his knowledge on how to battle social issues like inflation (Friedman, 4). An executive who attempts to solve a problem they are not knowledgeable of, is running the risk of making matters worse. Additionally, there is no way for an executive to know how much of the company’s resources can be justifiably allocated towards general social interest. Should an executive stop at 5% revenue like Mackey, or should they be putting aside more or less of their resources? Again, there is no way for an average executive to know this. If someone ignores these warnings and attempts to give back to the community to gain some goodwill for their company, they would only be acting short sighted. Friedman says that this kind of behavior only reinforces the idea that the pursuit of profit is wrong and immoral, even when fair pursuit of profit is what a business is meant for (Friedman, …show more content…
A business that acts on social responsibility rather than shareholder interest is undermining the system of a free society. It simply is not proper or fair for a business executive to act as the judicial, legislative, and executive function all at once. The only responsibility of a business is to use its resources to engage in activities that increase profits, both for the business and its shareholders. To most, corporate social responsibility seems appealing on the surface, but the road to corporate fraud and wrongdoings can be paved with good
This is because, as Friedman says, an executive should be selected based on his ability to run a business, and not based on his knowledge on how to battle social issues like inflation (Friedman, 4). An executive who attempts to solve a problem they are not knowledgeable of, is running the risk of making matters worse. Additionally, there is no way for an executive to know how much of the company’s resources can be justifiably allocated towards general social interest. Should an executive stop at 5% revenue like Mackey, or should they be putting aside more or less of their resources? Again, there is no way for an average executive to know this. If someone ignores these warnings and attempts to give back to the community to gain some goodwill for their company, they would only be acting short sighted. Friedman says that this kind of behavior only reinforces the idea that the pursuit of profit is wrong and immoral, even when fair pursuit of profit is what a business is meant for (Friedman, …show more content…
A business that acts on social responsibility rather than shareholder interest is undermining the system of a free society. It simply is not proper or fair for a business executive to act as the judicial, legislative, and executive function all at once. The only responsibility of a business is to use its resources to engage in activities that increase profits, both for the business and its shareholders. To most, corporate social responsibility seems appealing on the surface, but the road to corporate fraud and wrongdoings can be paved with good