Social Responsibility of Business: Critically Discussing Friedman's Statement

Social Responsibility
of Business (AS 1)

Table of Contents
ESSAY TOPIC................................................................................................................................1
“The social responsibility of business is to increase its profits” (Friedman, 1970). Critically
discuss this statement using contrasting theories and an extended example that illustrates Socially
Responsible behaviour”...................................................................................................................1
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Critical discussion of statement as per theories..........................................................................1
Critique of statement with examples illustrating socially responsible behaviour.......................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

ESSAY TOPIC
“The social responsibility of business is to increase its profits” (Friedman,
1970). Critically discuss this statement using contrasting theories and an
extended example that illustrates Socially Responsible behaviour”.
INTRODUCTION
Social responsibility can be seen in terms of both the activity and theory which is carried out by
an entity for the sole purpose of ensuring welfare of society via its operations. In accordance
with the thought process of Friedman, the most crucial social responsibility of an entity is
increment of its profits (Advantage, 2020). This statement consists of a number of layers which
can be comprehensively understood to gain knowledge of its actual meaning. To accomplish this
purpose, the following essay consists of contrasting theories of social responsibility. Along with
this, the essay also consists of examples of socially responsible behaviour. Lastly, it also includes
the ethical as well as sustainability standing of a wide array of organisations.
MAIN BODY
Critical discussion of statement as per theories
Social responsibility can be referred to as the responsibility as well as duty of an entity that
they are supposed to meet for stipulation of welfare for society (Barnett, 2019). In this relation, it
has been identified that there are many several which are related to the concept of social
responsibility. The arguments presented within theories are thus discussed in a comprehensive
manner as follows.
Friedman’s perspective v/s Freeman’s perspective
Friedman’s shareholder theory
Milton Friedman, a renowned economist, held the belief that it is significant for any
country to hold a free market system along with no governmental intervention in the
organisational operations. In accordance with this, Friedman created a doctrine as per which the
sole social responsibility of a company is to enhance its profits for the wide array of shareholders
pertaining to the company (Carroll, 2018). This theory effectively shaped the corporate culture
within the twentieth century, a time when capitalism along with freedom were regarded to be the
main purposes of a company assisting them in earning huge profits. In accordance with this
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