Friedman And Freeman Study Guide

Improved Essays
Show More
This assignment will address learning unit one and two from the module guide. It will cover the stakeholder and the stakeholder theory or approach, and an application of investor relations in organisations. The essay will be structured in a logical way and the topics of discussions will be placed under relevant headings. It will compare and discuss the opposing argument offered by Friedman and Freeman and will discuss the implication that the views of Friedman and Freeman hold for corporate social investment. Additionally, it will refer to the King III Report and argue whether social responsibility actually benefits society, or is it, as Friedman claims, merely a whitewashing exercise conducted by organisations to divert attention from their …show more content…
These projects have a strong developmental approach and make use of company resources to benefit and improve communities and are not above all focussed as marketing strategies. These projects include health care, education and training, environmental education, etc.
Freeman and Friedman have two opposing views on Corporate Social Investment. As written above, Friedman has cautioned organisations against unprofitable Corporate Social Investment and believes that the only social investment an organisation has is to maximise profits and provide a return to its shareholders, yet so many organisations lean towards Freeman’s theory and participate in Corporate Social Investment. Freeman’s theory applies more to organisations today. Corporate Social Investment has become popular throughout the world and many organisations have included Corporate Social Investment in their business plan. Corporate Social Investment makes organisations more striking to existing and potential stakeholders. Nowadays, society hold organisations responsible for their actions and expect them to do more than just maximise their profit by participating in social investment. For organisations to exist in the long run, they need to show interest in their current and potential stakeholders and invest in matters which concern their interests. This type of participation in society gives the organisation a good

Related Documents

  • Improved Essays

    Advantages And Disadvantages Of Shareholder Theory
    • 705 Words
    • 3 Pages

    Advantages And Disadvantages Of Shareholder Theory

    a) The stakeholder theory is a strategy that takes stakeholders into consideration when making decisions to achieve higher business performance. Stakeholders are people who affect and are affected by a business’ performance. Other than shareholders or owners, customers, government, employees, and suppliers are some examples of stakeholders. The theory provides an alternative to the shareholder theory, which states that companies must focus only on maximizing the market value of the equity of its existing shareholders. Edward Freeman, who was the first to completely express the theory in 1984, developed the theory to address that era’s business issues, most of which are related to external pressures (e.g. activism, foreign competition, government…

    • 705 Words
    • 3 Pages
    Improved Essays
    Read More
  • Improved Essays

    Social Network Analysis Essay
    • 1118 Words
    • 5 Pages

    Social Network Analysis Essay

    USAGE OF SOCIAL NETWORK ANALYSIS IN SOCIAL ENTREPRENEURSHIP The emergence of impact investors who invest in firms and organizations that seek to create social impact over years is starting to create a sea change in several countries around the world. While it might be interesting to see these organizations as nothing more than investors investing in specific organizations, this fails to address the network created between the in-vestor and investees. Often what might start as a professional partnership and sharing of ideas can evolve into a stronger source of emotional support that allows investees to persevere in the face of overwhelming odds. A key factor contributing to this would be the fact that Social Entrepreneurs might value the experiences and advice of someone who has faced a similar problem in the development space over the advice of someone who has faced the problem in the corporate space - especially given the marked difference in cultural dynamics between the two spaces.…

    • 1118 Words
    • 5 Pages
    Improved Essays
    Read More
  • Improved Essays

    Milton Friedman's The Social Responsibility Of Business Is To Increase Profit?
    • 869 Words
    • 4 Pages

    Milton Friedman's The Social Responsibility Of Business Is To Increase Profit?

    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.…

    • 869 Words
    • 4 Pages
    Improved Essays
    Read More
  • Great Essays

    Lion Air Case Study
    • 1768 Words
    • 8 Pages

    Lion Air Case Study

    IDENTIFY SECTION a. Identify Issue Reputation is takes years to build and maintain, but it can be damaged by crisis or issue that an organization or brand is involved in. In some cases, the crisis of competing brand can bring an entire sector under not good spotlight of media focus by association. However, a PR crisis is not dramatic accident because it can be solved by crisis management. Issues tend to develop all time and typically are focused on one situation. An issue is most likely to arise from a mismatch or understanding between an organisation and its stakeholders .…

    • 1768 Words
    • 8 Pages
    Great Essays
    Read More
  • Improved Essays

    What Is Tesla's Corporate Social Responsibility
    • 1140 Words
    • 5 Pages

    What Is Tesla's Corporate Social Responsibility

    This is the case with both private and public companies, as stakeholder influence has grown because companies now find themselves competing on a global stage. Current business trends such as the massive growth in technology, an expanding worldwide competitive landscape, and a greater spotlight on social concerns in the public eye, has created an international business environment where companies now understand that if they do not acknowledge and show more concern with social issues, they simply will not be able to compete. The stakes are too high and the competition is too fierce for both talent and for customers for companies to not listen to key stakeholders when they craft their business models, and we certainly have seen Tesla, Patagonia, and General Mills do this. Tesla, Patagonia, and General Mills have shown with their actions and efforts that not only are they enacting corporate social responsibility to help improve their economic, social, and environmental surroundings, but also understand that their financial bottom line depends on it. This direct correlation between image, action, and economic prosperity can be witnessed in how these companies manage their supply chain, as they all understand that one damaging story can tarnish their reputation…

    • 1140 Words
    • 5 Pages
    Improved Essays
    Read More
  • Great Essays

    Ratan Nano Case Study
    • 2540 Words
    • 11 Pages

    Ratan Nano Case Study

    Background to Projects A project may be defined as all the tasks and processes required to build or bring a particular thing – product or service into existence. By its nature, projects have a beginning and an end and this is usually defined in the project charter. The project comes to an end when the defined product or service is available for use. The end of a project shows that it is not about routine operations but projects can lead to the development of an operational set that will ensure the meeting of the same pre-defined goal over and over again.…

    • 2540 Words
    • 11 Pages
    Great Essays
    Read More
  • Great Essays

    The Pros And Cons Of Sustainable Investing
    • 1460 Words
    • 6 Pages

    The Pros And Cons Of Sustainable Investing

    Sustainable Investing (SI), and its corporate counterpart, Corporate Social Responsibility (CSR) have been widely discussed over the past decades. As an ethically oriented investment strategy when it was founded in1960s, SI (or originally Socially Responsible Investing) gradually shifted to a broader approach including environmental, social, corporate and financial factors in late 1990s. Like its counterpart, early-CSR referred to corporate philanthropy and social relations in 1950s. The concept was regarded as a trade-off between corporate financial and social performance then, which violate the maximum shareholder value business objective posed by Friedman. However, some scholars view CSR strategy in other perspectives.…

    • 1460 Words
    • 6 Pages
    Great Essays
    Read More
  • Improved Essays

    ASSET4 Database Analysis
    • 1040 Words
    • 5 Pages

    ASSET4 Database Analysis

    Following the events of the latest financial crisis, the interest of media, public and investors towards the behavior and management of companies has seen a steady increase. Nowadays, companies are not judged solely on their financial performance but also on activities affecting a wider range of stakeholders. The set of activities under scrutiny by this research revolves around Environmental, Social and Governance practices and their effect on returns. Theoretically speaking, such activities are expected to have positive effects on performance of companies as their products and services would be favored by costumers and stockholders compared to those of other companies. Moreover, investors’ interest towards such practices has increased drastically…

    • 1040 Words
    • 5 Pages
    Improved Essays
    Read More
  • Improved Essays

    What Are The Internal And External Barriers Of Peripheral CSR
    • 704 Words
    • 3 Pages

    What Are The Internal And External Barriers Of Peripheral CSR

    Corporate social responsibility (CSR) is a concept that almost all firms state that they incorporate and embed into the core of their business activities and strategies. However, it can be argued that often times CSR is not properly embedded into a firm if their CSR strategy does not affect the firm’s strategy, routines and operations. This is known as peripheral CSR (Aguinis and Glavas, 2013). This essay explores what the defining internal and external barriers are to effectively embedding CSR policies into multi-national corporations. CSR is a relatively new concept, which can be said to have gained prominence during the 1950’s after the publication of Howard Bowen’s book the Social Responsibilities of the Businessman (1953).…

    • 704 Words
    • 3 Pages
    Improved Essays
    Read More
  • Great Essays

    The Importance Of Ethical Investment
    • 3806 Words
    • 16 Pages

    The Importance Of Ethical Investment

    A Portfolio manager’s role in the mutual fund is to maximize the wealth of the investors, through investment of assets in stocks of corporations. Every citizen/corporation has a social responsibility towards the society in which he lives in. Similarly mutual funds have a responsibility towards the society in which it operates. By investing on companies, investors seek to promote the growth and development of the company in anticipation of good results. They thus play a role in promoting the activities of the corporation towards making profits.…

    • 3806 Words
    • 16 Pages
    Great Essays
    Read More
  • Improved Essays

    Importance Of Coca Cola Social Responsibility
    • 717 Words
    • 3 Pages

    Importance Of Coca Cola Social Responsibility

    Corporate responsibility is a term that is supplanting the term corporate social responsibility. The ‘social’ is increasingly being omitted in order to emphasize the (claimed) broader responsibilities of business corporations, particularly their responsibilities with regard to the environment. Corporate Social Responsibility has helped several companies to develop and work upon several new core competencies, which enables the corporate to build a special relation with its customers, society, its shareholders and government by the sustainability acts done by them. The corporate social responsibility activities help in building a positive image of the company, it also helps in building goodwill which in long run helps in generating profits. The CSR activities…

    • 717 Words
    • 3 Pages
    Improved Essays
    Read More
  • Improved Essays

    Arguments Against Corporate Social Responsibility
    • 1398 Words
    • 6 Pages

    Arguments Against Corporate Social Responsibility

    Moreover, companies that involve in anything other than profit maximization are distorting the resource allocation and sabotaging the mechanisms of the market. This makes it contrary to the fundamental functions of a business to involve itself in social matters since a business is an economic entity rather than a social one and its responsibility is to adhere to the law. Therefore, a company would be engaging in an irresponsible venture if it does not seek to maximize profits. Moreover, it is argued that companies are responsible to shareholders and should not engage in social issues since that would raise a question of legitimacy.…

    • 1398 Words
    • 6 Pages
    Improved Essays
    Read More
  • Decent Essays

    White Dog Cafe Case Study
    • 422 Words
    • 2 Pages

    White Dog Cafe Case Study

    It would be considerably prejudicial to claim shareholder value is the only purpose of a corporation, albeit, that is the most important single aspect for long-term survival of any organization. However, one can have a solid purpose and scope and still conduct strategic outreach for the sole purpose of genuinely benefiting those less fortunate. The basic premise for any firm is to make money, and with positive cash flow in hand, we expect them to conduct themselves in a manner that brings about positive change in the global community. The only issue here with this myopic view of organizations is the expectation that they “must” or “should” conduct a corporate social welfare program.…

    • 422 Words
    • 2 Pages
    Decent Essays
    Read More
  • Improved Essays

    Project Success Essay
    • 1029 Words
    • 5 Pages

    Project Success Essay

    Many projects are managed in various areas of our life such as construction, healthcare, technology, education etc. Projects are significant in our life because of producing a definite outcome, within a planned schedule and limited budget. There are many different ways in the literature, on the definition of the concept of the project. The various definitions of the project has been carried out according to the work area.…

    • 1029 Words
    • 5 Pages
    Improved Essays
    Read More
  • Improved Essays

    Social Entrepreneurship: The Social Impact Of Social Entrepreneurship
    • 1360 Words
    • 5 Pages

    Social Entrepreneurship: The Social Impact Of Social Entrepreneurship

    One of the other aspects that we learned in this course is regarding the social impact that results from the social entrepreneurship. We learned about many B-corp companies that committed to change the world, such as One World Play Project, which makes, sells and distribute indestructible ball in the third world countries, focusing on bringing the power of play to the children who live in a harsh environment. Australian Ethical, an investment company, which only invest people’s funds in industries that give positive impacts to the world, such as medicine, healthcare, energy saving and efficient transportation, or Alter Eco, a chocolate producer who provides better benefits for the cacao and rice farmers worldwide. Having a better understanding on what the sustainable companies and B-corp companies do is really inspiring and it challenge me to contribute more towards the society. Most of the social entrepreneurship companies do not gain big in terms of financial profits, but more significant is the societal impact of the organization, and evaluation of the success of…

    • 1360 Words
    • 5 Pages
    Improved Essays
    Read More

Related Topics

Ready To Get Started?
Discover
Company
Follow
©2024 Cram.com
Privacy Policy |  About Ads |  Site Map |  Advertise  | 
  • Cookie Settings