The paper "Validity of Milton Friedman’ s View on Profit" is a great example of management coursework. No singular idea made by a single person had become so popular in the ancient days like that brought forth by Milton Friedman. The idea; that the sole purpose of any business is to bring in more money for its stockholders became popular especially after it was published in the New York Times on September 13th, 1970. Friedman was a leader in the Chicago School of Economy and won a Nobel Prize in Economics in 1976 and therefore he was a very influential economist.
His article in New York attracted famous people’ s attention like George Will, who regarded Milton as “ the most consequential public intellectual of the 20th century. ” Analysts wondered what the idea behind a Nobel man like Friedman was. People wondered whether the social responsibility of a corporation was just making a profit. What about the safety of the worker, pollution, child labor or quality of products? If these issues were not considered in Friedman’ s idea, then his article would sound uncivil and unpleasant. However, this statement would be varied in some circumstances.
In fact, there is no single business that enters the market world with the aim of making losses (Forbes. com. 2016). The paper that follows discusses the validity of Milton Friedman’ s statement in today’ s society. Social responsibility of the executive Friedman argues that the social responsibility of business is to make a profit for its shareholders. The corporate executive has the responsibility of ensuring that business meets the set goals which is making a profit. Friedman argues if the corporate executive carries all duties following the ethical customs, then the persons will be able to fulfill the desires of the company.
He argues that the needs of the society are supposed to be met by the government, individuals or various groups that should volunteer for this duty. Therefore, the responsibility of earning and spending money is left to the executive (Bfi. uchicago. edu 2016). The executive represents the company and does all activities that are required to benefit the company. They should know what it takes to sell the company and thus increasing the profit of that company.
According to Friedman, if the corporate executive comes up with a social responsibility agenda that is contrary to the agenda of the company making a profit, the executive should be fired immediately. This statement is applicable to the marketers of any business. Salespersons that are employed by any company should convince customers to buy the products of that company thus bringing more money, profit. If they do not achieve this agenda, they have no other responsibility in the company and therefore they need to be fired and someone else who is competent in sales is employed (Colorado. edu, 2016). It should also be noted that an executive is a person as well as an agent of the company.
As a person, he/she has a social responsibility for the family, society and his own needs. As an agent of the business, he is supposed to sell the agenda of the business in order to make more profits for the business. If he doesn’ t sell the company, he will not achieve the agenda of the company. In addition, failure to market the company means that he may lose his job or even make less money that will not meet his needs.
So he is left with the alternative of selling the business to achieve the agenda of the business and thus meet his personal needs (Bfi. uchicago. edu, 2016).
Corporate Social Responsibilty: Friedman's View | Becker Friedman Institute. (2016). Bfi.uchicago.edu. Retrieved 26 April 2016, from https://bfi.uchicago.edu/news/feature-story/corporate-social-responsibilty-friedmans-view
Forbes Welcome. (2016). Forbes.com. Retrieved 26 April 2016, from http://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/#3d9fd81f214c
Profit Maximization. (2016). Economics.illinoisstate.edu. Retrieved 26 April 2016, from http://economics.illinoisstate.edu/ntskaggs/readings/maximization.shtml
Profit Maximization - Merits Of Profit Maximization. (2016). Fareedsiddiqui.expertscolumn.com. Retrieved 26 April 2016, from http://fareedsiddiqui.expertscolumn.com/article/profit-maximization-merits-profit-maximization
The Social Responsibility of Business is to Increase its Profits, by Milton Friedman. (2016). Colorado.edu. Retrieved 26 April 2016, from http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html