According to Friedman, CSR is a process which involves the use of business resources for profit generation provided a business stays within the rules of the game, which is to engage in a free and open competition without involvement in deception and fraud (Sun, William, Jim and David 25). He also stated that in a free society, there is only one social responsibility for any business-using its resources and engaging in activities desgned to increase profits while ensuring it stays within the rule of the game, which involves engaging in an open and free competition and not engaging in deception or fraud.
The following are some of the ways in which businesses can apply the recommendations of Friedman in conducting their business activities. 2.1. Application of Freidman’s recommendations in CSR A company can ensure it is involved in a free society principle suggested by Friedman by ensuring profits are generated within the legal requirements of profit generation. In addition compliance to government regulation is also a process of ensuring a business stays within the rule of the law (Crowther, David and Güler 62).
This is because most government regulations prohibit corrupt activities such as taking bribes, dealing in goods that are not recommended for the company or failing to comply with contractual obligations with its partners. An example of a form of corruption that a business might be involved in is lying. This is a process where a person makes a statement that he or she knows that is not true according to what he or she knows that is true. Another form of corruption that a corporate social responsible business must observe is not involving in bribery (Baron 36).
This is the process where a person gives reward to another person so that the other person can provide a particular service or meet a particular objective. The recommendation of Friedman can be applied as a guide to businesses by ensuring the executives of the businesses do not receive a bribe so that they can execute a service to clients. Another practice that can be prevented by applying the principles suggested by Friedman is stealing from the company in which one works (Cody55). This is a practice that has been common among company executives such as company managers.
According to Friedman’s view, managers are agents of the owners of the corporation and they have the responsibility to act in accordance with the desires of the owners of the companies they work for. He also emphasizes that corporate stakeholders must work towards ensuring a high return on investment and managers who engage in stealing from stakeholders are not required by law (D'Amato 64). The act of imposing taxes is explained as an instance of imposing costs on stakeholders and is contrary to democracy.
Friedman’s principle can also be applied in a situation where there is the need to observe employee rights. The management must provide the employees with the right considerations such as working conditions, adequate compensation and benefits in a similar manner that other stakeholders of the company are rewarded (D'Amato 65). The main freedoms that businesses must accord their employees include: freedom to access information, participate in discussions, participate in meaningful work within the organization and engage in management of their tasks.
Employees’ rights can also be observed by not interfering with their moral development. In order to comply with employees’ rights and welfare, it is suggested that company procedures should ensure rules of justice are used to determine the manner in which stakeholders relate to one another (Jonker and Marinus 29). It is also suggested that the interests of all affected stakeholders should be considered during decision making process and the interests of one stakeholder should not automatically take precedence over the interests of other stakeholders without a particular reason.
Another area where a business can be involved in an activity in compliance with law is by ensuring the goods and services provided are those that are beneficial to the consumers and not mainly for the benefit of the company.
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