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Social responsibility of business - Essay Example

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Therefore, it is legitimate for businesses to maximize their profits, as not doing so will question the foundation of their existence. Profit maximization enables…
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Social responsibility of business
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Social Responsibility of Business Social Responsibility of Business Friedman was correct because making profit is the primary traditional motivation for people to engage in business. Therefore, it is legitimate for businesses to maximize their profits, as not doing so will question the foundation of their existence. Profit maximization enables businesses to claim the due costs of the goods and services they offer to the society. Most social responsibility activities are unpaid for, and literally eat into a business’ hard-earned gains. In addition, businesses pay taxes and duties to the government and the government should therefore be responsible for intervening in social issues. Requiring businesses to intervene in social issues is equivalent to asking for more than what businesses owe both government and the society (Sarkar 2005, p.25).
Increasing profits is the right thing for businesses to do because engaging in social activities would give them unfairly excessive powers. These powers would cause businesses to control the lives of people through political action, influence on the government and domination using business values. Businesses know how to make profits well but are incompetent pertaining social issues. This incompetence unfolds threefold starting with businesses’ lack of the technical skills requisite to handle social issues. Businesses lack knowledge that is as good as that of the government about what is good for the society and incompetent investments into social issues only wastes stakeholders’ funds (Sarkar 2005, p.26). Overall, the nature and character of free economy requires the function of business to be economic and not social and going against this is tantamount to causing confusion.
On the other hand, Friedman could as well have been wrong in light of a number of things. His statement ignored that social activities could have profitable gains in the end. As such, Friedman’s statement focused on the short-term costs and downplayed the long-term benefits that could accrue from businesses engaging social responsibility. Concentrating on making profit only denies businesses a chance to build favorable public image. Businesses need a favorable public image in order to get employees, customers and access to money markets. Businesses should have a conscience even when concentrating on making profit because ethical actions are necessary if a business is to keep its customers and not have them boycotting its good and services (Sarkar 2005, p.27). The possible risks that a socially responsible business dares will make the stock market to raise its stock price ratio hence favoring the interests of its stockholders.
I believe business and society are inextricable and should exist as such. There is a need to consider the interests of each party when considering the extent of their roles. Businesses will exist for as long as they are making profit but they should also give back to the society. Social responsibility for businesses should not imply that businesses give to the society solely and without expecting anything in return. It should involve a tradeoff where the society helps businesses make profit and in return, businesses should set a portion of their profits for the benefit of the society. The government should execute its duties to the society without forfeiture or shifting the impact on to businesses.

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Sarkar, C 2005, Social responsibility of business enterprises, New Century Publications, New Delhi,. Read More
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