Social Responsibility of Business - Essay Example

The Social Responsibility of Business al affiliation: Issue One of the man s of business entities is to make huge profits within the shortest time possible. This secretive agenda will continue to be hidden from the public. This paper aims at evaluating the argument on the core responsibility of business based on Milton Friedman’s View. Argument, premises and conclusion Milton Friedman’s View on the Accountability and stakeholders is that managers of corporations will always quote that they do not merely dwell on profit making but embark on lifting and promoting the living standards of the general society. The truth is that these corporates, for a long period of time, have undermined the bases of a free society. This is because business as a corporation can never have a responsibility. It is only people who have responsibilities. Friedman intimates that managers in their capacity as corporate executives have a main agenda that is to represent the interests of the business owners, which presumably will be “to make profit.” In cases where the owners of the business came together for a charitable purpose, for example a hospital, the primary obligation of the executive manager will not be to make profits but render services in the best way possible that will satisfy the customer/consumer. Either for making profits or rendering services the best way possible, the executive sole responsibility of a business is to be loyal to the owners of the business. It must be understood that the executive may be running a number of charity works. For example, he/she may be involved in the funding of the local church or club, or refuse to work for certain companies. According to Friedman, the manager in this respect is acting as a principal and therefore these tenets will be his own responsibilities, not those of the corporation. In cases where a business entity increases product/ services prices in a bid to contribute to the social responsibility ascribed to preventing inflation, it would be in the best interests of the business. Even when the corporate make expendi­tures on reducing pollution, to an amount that the corporation finds favorable, or is obligates by law to espouse the social goal of improving environmental conditions. In every one of these cases, the corporate exec­utive would be using up a different entity’s resources to satisfy general interest ascribed to society, starting from reducing the returns of the stockholders, raising the price of products to customers, and when he lowers the wages of some employees. Conclusively, corporations will need to take a different step and think of mechanisms that will be involving more than just the stockholders in the decision making process. Although a stakeholder theory exists, it would be important for the corporation to think in light of a broader perspective that will stop the notion of operating as a corporation. Traditional accounting may need to be reformed through the technology of social and environmental accounting to make corporations more accountable to the community. Environmental accounting can be an important too if at all corporations are to have the capacity satisfy the accountability relationships with stakeholders and if it is to change the consciousness of corporations. Evaluation of the Argument Based the argument ascribed to the above-mentioned instances, the executive is imposing a distinctive responsibility instead of serving as a representative of the stockholders along with the employees and the customers, by not spending the money in a different way than they would have spent it. This clearly shows that the businessman is taking more and very critical roles without minding the employees or the customers. He decides whom to tax by how much and for what purpose, and how to spend the returns and all this guided only by general appeals like to restrain inflation (Larsen, 2004). It would be wise if the corporate imposes taxes and makes expendi­tures to foster "social" objectives by setting up a mechanism that will have the mandate to make the as­sessment of taxes and to determine through a political process the objectives to be served. In addition, in instances where the executive responsibility raises lots of questions or doubts then there should a legal framework enabling the corporate customers and employees to desert the business entity for exercising their so­cial responsibilities (Larsen, 2004). The same case ap­plies to the newer trend of calling upon stakeholders to require corporations to exercise social responsibility. When the stakeholders play foul by trying to get other stockholders to contribute against their will then the same legal process should be exercised on them. This is because when they succeed, they again impose taxes on consumers and spend the proceeds. When the individual proprietor imposes costs on employees and customers, the same law should also apply to him even though he is far less likely than a large corporation or union to have mo­nopolistic power. Summative, it would be apt to intimate that a business ought to concentrate on devoting their resources to services ascribed to small communities or improve its authority. This may reduce effects on the consumer, suppliers or the employee. This task requires the embodiment of communitarian principles in the working of every organization in the economy, both in the private and public sector. People will need plenty of teaching-from family, employers and school or from their daily experiences of life if they are to think more practically and with moral principles. When these individuals learn or decide that some things are good and some are bad, and thereafter see them as bad or good, their disposition to recognize things in that way will become their characters (Besnard & Hunter, 2008). It also emerges that corporations may have more than just the responsibility to increase profits, and must consider the environment and community at large. This may require that executive and partly shareholders witch from being profit-oriented and become more considerate of others. For the community at large (including corporations) to be moral, they may need to be educated by institutions, friends and families around them. Deductive component The argument contains a deductive component and is valid and absolutely factual. This is because the argument does not only highlight instances where by the Consumers have been deprived of their incomes by corporations but also goes ahead to highlight the process by which they are deprived. Inductive Component The argument has an inductive component and is valid. This because in cases where a business entity increases product/ service prices in the hope of contributing to the corporate social responsibility tied to preventing inflation, it would be in the best interests of the business, even when the corporate makes expendi­tures on ameliorating pollution to a level that the cor­poration sees fit or that the law may require the corporation to espouse the social object of improving the condition of environment. In every one of these cases, the corporate exec­utive would be consuming stakeholders’’ resources to oversee a common social interest. Starting from reducing the returns of the stockholders, raising the price of and lowering the wages of some employees. References Besnard, P., & Hunter, A. (2008). Elements of argumentation. Cambridge, Mass.: MIT Press. Budgen, R. (2010). Critical thinking for students: Learn the skills of analysing, evaluating and producing arguments (4th ed.). Oxford: How To Books. Larsen, L. (2004). Responsibility in world business managing harmful side-effects of corporate activity. Tokyo: United Nations University Press. Walton, D., & Reed, C. (2008). Argumentation schemes. Cambridge: Cambridge University Press. Read More