The Social Responsibility Of Business Essay example

869 Words Nov 4th, 2016 4 Pages
We have been brought up with the misconception that the primary purpose of corporations is to increase profit for their shareholders even in cases of eleemosynary organizations. Milton Friedman in his 1970 article The Social Responsibility of Business is to Increase Profit, illustrates that the central responsibility of a business is “to use its resources and engage in activities designed to increase its profits” (pg 6). His reason being those corporate executives and managers are agents who are morally and legally obligated to act in the best interest of their principle. Friedman’s’ neoliberal economics, is being contested by stakeholders theory which takes socially responsible into consideration. Dana Brakman Reiser in the article The Next big Idea: Flexible Purpose Corporations introduces the idea that social enterprises have multiple objectives, which are to earn profits for owners and promote social good.
Friedman’s’ ideology is fundamentally incongruent with green business because he claims only the principles can engage in charity with his or her personal income. Corporate executives, on the other hand, are lawfully prohibited from engaging in social responsibility with shareholders money. He states that the structure of corporations inherently deprives the entity of social responsibility or duty to anyone besides their shareholders. Brakman Reiser business theory is almost synonyms with stakeholder’s theory and Green Business. Reiser encourages the concept of…

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