Essays on Corporate Responsibility Case Study

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The paper "Corporate Responsibility" is a great example of a Management Case Study. Corporate social responsibility involves the voluntary activities that a company or organization undertakes to operate in an economic social and environmentally sustainable manner (Banerjee, 2007). The idea of corporate social responsibility shows that an organization, other than earning a fair return and ensuring they obey the law, have other responsibilities towards the society. This includes moral, ethical and philanthropic activities. This shows that other than stakeholders, an organization must ensure that its operations meet the expectation of the society in general.

The society expects organizations to be efficient and profitable, abide by the laws set by the government, to conduct their affairs in a fair and just way, and to be involved in philanthropic activities that will benefit the society. Society thus tends to look into the activities of a business or corporation around them to see to it that it does its duties towards the society. This is beneficial to these corporations as they improve their public self-image. Many arguments for and against corporate social responsibility have come up.

Theories, which can be broadly categorized into three, have been formulated to assess the need for social responsibility of organizations (Carey, 2013). These theories include; the classical economic view that mostly has the works of Milton Friedman, the social-economic view and the broad social view. Corporations deal with social issues and problems, including environmental issues, global issues, and technological issues. These issues have to be addressed and thus the need for assessment of corporate social responsibility. The Classical Economic View The classical economic view, Milton Friedman, has argued that the primary responsibility of businesses is to make a profit for the owner while complying with the law and set ethical conduct.

According to this theory, a social problem is the responsibility of the government and businesses should not address such issues. Maximizing profits is seen as a social responsibility as a self-interested pursuit for profits leads to social good in the long run. More jobs are created, shareholders' wealth increases and economic growth is achieved because huge profits lead to more taxes and thus government revenue is maximized. Friedman’ s main arguments against businesses practicing corporate social responsibility that he termed social responsibility in a broader sense include, the tax argument; tax is intolerable and antidemocratic (Banerjee, 2007).

This is imposing costs on businesses, and it is even worse because the tax collectors spend it on what they want. According to him, tax collection should be done democratically and with elected officials and not private individuals who act as the government. He terms taxation as anti-democratic and an act by those who call for corporate social responsibility and have failed to achieve what they want through the political process.

Milton Friedman in the agency argument argues that managers are shareholders employees, and therefore, they have the responsibility of meeting the interests of the shareholders which is mainly increasing the shareholder's wealth. This is done through maximizing profit and not practicing social responsibility, which reduces the company’ s profits. He also addresses free society characterized by free markets. Corporate social responsibility tends to undermine the free society and may lead abolition of capitalism and the introduction of socialism. In this case, ownership is moved from businesses to the public (Karake, 1999).

He argues that if executives allocate resources for social goals instead of working on profit-maximizing goals then they should not be shareholders’ employees but rather elected society representatives, and if they are elected and controlling resources it becomes socialism as they represent the public.


Banerjee, S. B. (2007). Corporate social responsibility: The good, the bad and the ugly. Cheltenham, UK: Edward Elgar.

Carey, L. (2013). Business Ethics Managing Values and Corporate Responsibility. Frenchs Forrest, Sydney: Pearson.

Karake, Z. A. (1999). Organizational downsizing, discrimination, and corporate social responsibility. Westport, Conn.: Quorum Books.

Velasquez, M. (2012). Business Ethics: Concepts & Cases (7th ed.). Upper Saddle River, N.J: Pearson Education Inc.

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