Corporate social responsibilityIntroduction Corporate social responsibility refers to methods used by companies in managing their business activities so as to make an overall impact to the society it operates in. Most companies are focusing their activities on the quality of their management in terms of people and their internal processes, and also on the nature and quality of their impact to the society. This is because the stakeholders are keen on the business activities both internal and external. The stake holders want to know how the business is doing in terms of employees, its products and its impact on the external environment.
Social responsibility therefore refers to the responsibility of the organization to maximise its positive impact to its stakeholders and minimise its negative impacts (Mullerat, 2009). However, there are several debates concerning corporate social responsibility as analysed in this essay. Debates on Corporate social responsibilityDebates on social responsibilities for corporations have been there for several decades. This started in 1950s with ideas that businesses should focus on more than just maximising their profits. The debates widened in 1960s and 70s due to issues such as poverty, unemployment, pollution and may other social issues.
Since then several corporations have realised the need for taking this responsibility over their society which must also be balanced with the demands of the global business economy. However, there are other critics who argue that businesses should only focus on their main mission which is maximization of profits and returns to the shareholders (Crowther, & Rayman-Bacchus, 2004). Critics of Corporate social responsibilityOne strong critic of corporate social responsibility is an American writer Milton Friedman.
Friedman says that responsibilities can only be taken up by people. He says that a corporation is an imitation of a person and therefore it should bear artificial responsibilities. He explains that it is the businessmen who should bear responsibilities or the proprietors. He believes that businesses are trying to defend free enterprise when they claim that businesses have social responsibility on top of maximising their profits. But according to Friedman, in a free enterprise, the corporate executive has responsibility over his employer who is the owner of the business.
His responsibility is just to manage the business following his own desires and make as mush profits as possible. This is as long as he conforms to the rules of the society which are contained in the ethical customs (Friedman, 2000). Accordingly, if the corporate executive decides to take responsibility over the social issues, he may therefore be spending his employer’s money for the interest of the society. Such actions will therefore reduce the profits of the business and the returns to the shareholders. This might even result to increased prices to the customers and low wages for the employees.
Such actions should therefore be done using the executives own money. The argument of Friedman can be called a classical view of a business and its functions which is described as follows: economic activities should be distinguished from other activities and they should be geared towards economic goals of the business, the performance of the business should be primarily be measured according to its growth in production of goods and services. The main goal of the business should be to make profits and that other social issues should be done by non business organizations (Banerjee, 2007).