Why Do Companies Create Products In Society?
Do companies creating products and solutions have a responsibility to consider the effects of these products on society? The popular answer would be yes. Every day, we see brand development benefits that arise out of an organizations CSR initiatives, we cannot argue against their contribution to a company’s profits.
Milton Freidman states that the only social responsibility a business has is to increase its profits. It sounds crude and carries an unpopular view in today’s world. But the simplicity of the argument cannot be denied. He argues that businesses are not individuals and as such cannot possibly serve any social good. Serving the society is the responsibility of individuals, who can choose to make decisions howsoever they please. He suggests that shareholders are the economic engine of the organization and the only group to which the firm must be socially responsible. The goal of the firm is to maximize profits and return a portion of those profits to shareholders as a reward for the risk they took in investing in the …show more content…
We can argue that providing goods to society in a time of need build further allegiance and serve the best interests of the shareholders in the long run. It is easy to see that delivering value to environmental and societal stakeholders yields return to shareholders as well. That is the argument made by Lubin and Esty. They state that sustainability issues are fundamentally the same as other organizational challenges. They frame the sustainability issue as a “megatrend” not unlike other game-changing developments in business and society — and suggest that these similarities provide predictable patterns and lessons for successfully coping with changes. Do Lubin and Esty contradict with Friedman or are they just talking the language of changed times, isn’t putting shareholder benefits in the forefront a good sign of corporate
Milton Freidman states that the only social responsibility a business has is to increase its profits. It sounds crude and carries an unpopular view in today’s world. But the simplicity of the argument cannot be denied. He argues that businesses are not individuals and as such cannot possibly serve any social good. Serving the society is the responsibility of individuals, who can choose to make decisions howsoever they please. He suggests that shareholders are the economic engine of the organization and the only group to which the firm must be socially responsible. The goal of the firm is to maximize profits and return a portion of those profits to shareholders as a reward for the risk they took in investing in the …show more content…
We can argue that providing goods to society in a time of need build further allegiance and serve the best interests of the shareholders in the long run. It is easy to see that delivering value to environmental and societal stakeholders yields return to shareholders as well. That is the argument made by Lubin and Esty. They state that sustainability issues are fundamentally the same as other organizational challenges. They frame the sustainability issue as a “megatrend” not unlike other game-changing developments in business and society — and suggest that these similarities provide predictable patterns and lessons for successfully coping with changes. Do Lubin and Esty contradict with Friedman or are they just talking the language of changed times, isn’t putting shareholder benefits in the forefront a good sign of corporate