Essay by mana266University, Bachelor'sA, May 2005

download word file, 9 pages 4.9 3 reviews

Downloaded 375 times

For decades, a certain level of mistrust has been floating around, between businesses and the society. The society questions whether the economic benefits, provided by those businesses, are not leaving any negative consequences on the local community, the society, or even on the environment. Today that issue is still very dominant, and one of the most controversial: corporate social responsibility.

Opinions about business's social responsibilities lie mainly between two extremes. At one extreme, there is the Classical View that states that business is an economic institution directed towards profit whose only responsibility to society is to provide goods and services and to return maximum profit. The Nobel Prize winning economist Milton Friedman endorsed this classical view. Friedman said "... there is one and only one social responsibility of business-to use it resources and engage in activities designed to increase its profits... ". At the other extreme, there is the Socioeconomic View that states business is a part of the larger society and, therefore, it has responsibilities other than simply maximizing profits.

Some advocates of this view also contend that it is often in a company's financial self-interest to be socially responsible.

The topic of corporate social responsibility has been widely argued and debated about because it is becoming an increasingly important concern to the society in which an organization operates in. Businesses worldwide have become more socially responsible, but they still are pursuing economic interests. Economic interests will always remain the main, if not the only, priority for most businesses all over the world. Also, either position in corporate social responsibility might sway the financial performance of the company either positively or negatively.

The Classical View holds that management's only social responsibility is to maximise profits. In this case, typically, the company merely cares about making profit without putting any...