Social Responsibility And Impact

Running head: SOCIAL RESPONSIBILITY AND IMPACT
Social responsibility and impact
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SOCIAL RESPONSIBILITY AND IMPACT
Introduction
The essay by Milton Friedman's, named- 'The social responsibility of business is to
increase its profits', is consider to be an important text in the literature of corporate social
responsibility. The main cause of the essay being famous is it’s out of the box approach to the
idea of corporate social responsibility. This essay speaks of the CSR in respect of the
weakness of shareholder model of capitalism. The text of Friedman’s work speaks of the
importance of profits in business over any other social responsibilities that is imposed on the
business enterprises. According to the title of the essay, the sole responsibility of a business is
to gain profits by fair means. Therefore, spending resources for the “social responsibilities” is
not the right thing to do in the business decisions. The author of the essay tries to prove that
the use CSR in the business if unfair and a socialist practice. The responsible person for
decision making in the business are the one who must only concentrate on increasing the
profits for the company and nothing else.
Discussion
The argument of the essay by Friedman starts with the statement that most of the
businessman wants to show their business endeavour to be more about the “social
conscience” and less about the profit making. According to Friedman, “The businessmen
believe that they are defending free enterprise when they declaim that business is not
concerned "merely" with profit but also with promoting desirable "social" ends; that business
has a "social conscience" and takes seriously its responsibilities for providing employment,
eliminating discrimination, avoiding pollution and whatever else may be the catchwords of
the contemporary crop of reformers.” He states that CSR or social responsibility is a
completely wrong approach, as the main purpose of any business is to gain profits. The
businessmen who claim such things are actually depending the free enterprise to declaim that

SOCIAL RESPONSIBILITY AND IMPACT
the business is not “merely” to gain profits. The essay further talks about how the intellectual
forces make businessmen to think about such propositions. The aim of socialistic approach is
to prove that the social conscience and social responsibilities are higher than any other thing
in this world. The next argument of the author is quite vague. Friedman says that business
cannot have responsibilities as it is not a person. When it comes to the question of
responsibilities, only the people can be responsible. The “business” cannot be said to have a
responsibility for the same reason.
The author than states his main arguments by saying that the individual properties are
out of the context here as these are operated by an individual. Here the question is of
corporations that have the responsibilities to the customer and all other stockholders. The
corporate executive is the employee that has been appointed by the employers. Therefore, the
min responsibility of the executive is not for the society but for the company itself. In such
cases, if the company executive choses to make decision in favour of the social
responsibilities over the business factors, this will be the wrong thing to do at any
circumstances. The essay says that the corporate executive is the responsible person to spend
the money at the right place. If they are spending the money of the business in filling some
social responsibilities than it is the waste of resources. The investments in doing something
good to the society is plausible if one is doing it from his or her own money.
The essay can be evaluated from multiple point of view. One of them is the
sustainability issue. The companies that operates in the modern market are concerned of their
CSR policies to give their business a sustainable growth (Font, Guix and Bonilla-Priego
2016). The idea of sustainability is associated with the overall growth of the company and
environment. The sustainable business is one that executes its operations not only to gain
profits but to have a long term growth. This part of CSR has been neglected by the author. He
only talks about the profit making aspects. The primary purpose of business in no doubt

SOCIAL RESPONSIBILITY AND IMPACT
financial profit making. But this does not imply that considering the social and environmental
issue will decrease the credibility of the business (Quarshie, Salmi and Leuschner 2016). The
concept of long term development is essential in context. The business that is sustainable
have the greater scope to stand the challenges of the market and gain competitive advantage.
This is the part of the CSR that is no less than the financial profit gaining.
The fulfilling of the CSR means, the person needs to execute some work that is nor
solely for the interest of his business or employers. The executives are employed by the
employers. Therefore, the sole responsibility of the executive is towards the employer. Each
if the cases the executive would be spending the money of someone else. As opined by
Petrenko et al. (2016), this will reduce the returns to the stockholders as the executive is
spending their money. The socialists have designed the framework for the businessmen this
way so that they would spend their money in social causes. The writer also condemns the
government and their lack of responsible behaviour in this respect. This statement of
Friedman is critically opposed by many experts. The TBL or Triple Bottom-line theory of
CSR is one of the part where this statement is countered.
Triple Bottle-line Theory
According to the TBL theory, the companies has the commitments towards the society and
environment other than mere profit making. This theory states that the company need to
invest in its people, environment and profit at the same time. This is for the further profits
only. If the company invested in the betterment of its people, the social cause would be
served. According to Clegg and de Matos (2017), the community causes are as important as
profit making. Again, the environment and its protection is another important aspect for a
business. The companies that concerns of these triple bottom-line rather than mere one