Corporate Social Responsibility
Corporate social responsibility – Milton Friedman versus Charles Handy
Corporate social responsibility has been a controversy topic for many economists. Some think that a corporate does not have any social responsibility while others believe a corporate does have some social responsibility as it exists in the society and is using the resources of the society. Milton Friedman and Charles Handy are the two typical representatives for these two contrast ideas which are reflected through the two famous articles “The social responsibility of business is to increase its profit” by Milton Friedman and “What’s a business for” by Charles Handy.
In his article named “The social responsibility of business is to increase its profit”, Milton argues that an enterprise has one and only one responsibility, which is to increase the profit. He believes that the enterprise’s executive is not allowed to use other’s resources to do the social responsibility and also, he may make wrong decisions on spending money on different social responsibilities. The executive is the one that the shareholders trust and empower him to “conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society”.
On the contrary, Charles Handy, in his article named “What’s a business for”, strongly believes that a corporate have responsibilities to its shareholders, employees, and other social issues. He also convinces that doing the social responsibility can benefit the enterprise somehow.
First of all, we need to understand to context and point of views of the two author in order to evaluate and compare them. Friedman’s article was based on his book “Capitalism and Freedom” in 1962, which was designed to counter the arguments for government intervention in business it is in the book that he makes the case for economic freedom as a pre-condition for political freedom. That’s why his point of view is from an
Corporate social responsibility has been a controversy topic for many economists. Some think that a corporate does not have any social responsibility while others believe a corporate does have some social responsibility as it exists in the society and is using the resources of the society. Milton Friedman and Charles Handy are the two typical representatives for these two contrast ideas which are reflected through the two famous articles “The social responsibility of business is to increase its profit” by Milton Friedman and “What’s a business for” by Charles Handy.
In his article named “The social responsibility of business is to increase its profit”, Milton argues that an enterprise has one and only one responsibility, which is to increase the profit. He believes that the enterprise’s executive is not allowed to use other’s resources to do the social responsibility and also, he may make wrong decisions on spending money on different social responsibilities. The executive is the one that the shareholders trust and empower him to “conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society”.
On the contrary, Charles Handy, in his article named “What’s a business for”, strongly believes that a corporate have responsibilities to its shareholders, employees, and other social issues. He also convinces that doing the social responsibility can benefit the enterprise somehow.
First of all, we need to understand to context and point of views of the two author in order to evaluate and compare them. Friedman’s article was based on his book “Capitalism and Freedom” in 1962, which was designed to counter the arguments for government intervention in business it is in the book that he makes the case for economic freedom as a pre-condition for political freedom. That’s why his point of view is from an