1 hour away till my last uni exam for the semester, I leave you with this wonderful quote. Wish me luck 
“There is one and only one responsibility of business: to use its resources and energy in activities designed to increase its profits so long as it stays within the rules of the game … engages in open and free competition, without deception and fraud … few trends could so thoroughly undermine the very foundations of our society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”
Friedman (1968)
Hi! I'm an 19 year old aussie guy in NSW, Australia currently studying a Bach. Commerce. On this site I blog about stuff, How cool is that! No seriously though, you should read this stuff, its pretty good.
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“few trends could so thoroughly undermine the very foundations of our society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”
If this is true, which I doubt (surely that is precisely what is undermining our society – look at oil companies, fast food companies, chocolate companies…)
If it’s true, then I say there are more important things than the foundations of our society. Such as justice, protecting the oppressed, ending poverty, sustainable living… the list goes on…
VK,
First of all, good luck with that final exam. No doubt you are looking forward to a well earned break.
Friedman’s famous statement above comes from a true capitalist.
Some commentators believe that social responsibility is the responsibility of government, and that business should just get on with the business of managing their business operations.
I do not have much empathy for this view. Business, especially larger business, controls a large portion of the productive resources of society. This control gives business a great deal of power and influence.
With power and influence comes responsibility. Business, especially large businesses, have great potential to use the resources they control to have a positive impact upon society. They also have a responsibility to do so.
There are, however, a few qualifications, and these relate to corporate philanthropy and corporate participation in social projects.
Firstly, management is firs and foremost responsible to shareholders. Management has no mandate to spend company funds or resources (which are owned by the shareholders) on social projects unless the benefits of such projects to the company exceed the cost of the contribution from the company.
Second, companies must ensure that participation in social projects does not in any way distract management attention from the core operations of the business – the operations which produce products for customers as well as income for shareholders, employees, suppliers and the government.
Cheers
Andrew
Hey andrew, thanks for stopping by.
I’d have to agree with you there except for the part where you say “Firstly, management is first and foremost responsible to shareholders.”
That is true is a way, but it depends on the type of managerial styles being used in the organization. For example, Richard Branson’s Virgin group have Employees as first, customers second, and due to these the shareholders are blessed anyway.
I’m a big fan of Branson’s democratic style, his personal biography is defiantly worth a read.
Hope to catch you around,
cheers
VK,
I was given Branson’s biography years ago as a Christmas present. I had the best intentions to read it, but in reality I did not get past the first chapter.
I have a great deal of respect for Branson and I love his style. He really knows how to inspire his staff to put their best foot forward.
Cheers
Andrew
Any reason you didnt get past the first chapter? It was one i couldn’t put down, found it very interesting.
The worlds of Politics, Business, Education and Ethics are difficult to blend. Organizations have negative results because the people on board cannot tell the difference between right and wrong. Due to scope, these consequences usually take longer to materialize, but is the result the same? You can find a ton of articles and books about business ethics about businesses “losing their way,” e.g., WorldCom, Tyco, Enron. You can also sign up for seminars where they preach to “do the right thing.” They paint the world in stark black and white. These resources ask one-dimensional ethical questions, such as, “Should you take kickbacks from suppliers?” For me, ethics in the workplace including schools are varying shades of gray. You have to rely on moral law, that is, does it ‘feel’ wrong? It’s easy to say, “There is right, and there is wrong.” In my management book, Wingtips with Spurs (http://www.amazon.com/Wingtips-Spurs-Michael-L-Gooch/dp/1897326882/) I address these issues in detail. All major corporations have their written code of conduct. Each one is pretty much just a copy of the others and is a major dust bunny. The next time you walk into someone’s office, ask to see the company code of conduct. Good luck on finding someone who will produce it within five minutes. The moral law is much easier to find and digest. It resides in each of us. Michael L. Gooch, SPHR Author of Wingtips with Spurs: Cowboy Wisdom for Today’s Business Leaders http://www.michaellgooch.com
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