Friedman and Heilbroners - Free Essay Sample

Introduction

In comparing Friedman and Heilbroner’s opinions about the purpose of a business, there are convergences of opinion, and still, there are some departures in their argument. First, the two business philosophers agree that businesses have the primary purpose of making a profit. Secondly, a business acts in the best interest of the stakeholders. However, they contrast majorly on the role of business in advancing social wellness and welfare through corporate social responsibility. While Friedman holds that corporate entities have no business in practicing social responsibility as it reduces the business profit (Friedman, 1970), and Heilbroner’s considered corporate social responsibility as a long-term strategy for the business to expands its consumer base, and long-term profit generation (Heilbroner, R.L. (1919-2005). Friedman further holds that corporate social responsibility offers the business corporate managers unilateral, non- vetted, and unqualified political responsibility to tax the stakeholders or the customer toward financing corporate social responsibility, which is not right.

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Arguments

Having weighed on their argument, Heilbroner’s argument makes more sense, but it is not mainly a matter of right or wrong, but a matter of principality. This is because the reality of the matter is that business exists to make a profit, but then the profit-making should not be at the expense of social welfare or through exorbitant strategies.

The issuing of a statement by the business roundtable members expanding the purpose of companies beyond advancing the interests of shareholders was following the realization that the success of a company takes much more than just appeasing the shareholders. In as much as the stakeholders take the center stage in determining the direction of a business, the continuity of the business in terms of sustainability and prosperity is also influenced by other factors outside shareholders' control. The purpose must therefore, expand to consider stakeholders (such as customers, suppliers, and employees) rather than shareholders’ interests only.

Corporate social justice is a much more goal-oriented corporate social responsibility (CSR) by ensuring that a company is actively involved in addressing the interest of community members disadvantaged by society. Corporate social justice is an improvement from corporate social responsibility through converting the secondary or even vanity programs of CSR into a framework developed by the company and its stakeholders to actually addressing specific concerns in the society (Zheng, 2020).

Conclusion

According to Lily Zheng, corporate social justice is a concept hos time has come. Companies should introduce corporate social justice in their organization by undertaking five main steps. First, the company should search for an issue that addresses a more just society and develop a goal/vision that intersects with the company’s mission. Secondly, the company should position itself in a broader perspective related to the issue of interest. Thirdly, establish strong connections between the company and representatives of the identified social issue. Fourthly, the company should take a stance following a thorough evaluation of the issue and understanding the best possible strategy to address the concern. Lastly, solidify the position through regularly evaluating the progress, and instituting accountability measure (Zheng, 2020).

References

Friedman, M. (1970). The social responsibility of business is to increase its profits. The New York Times Magazine

Heilbroner, R.L. (1919-2005). Controlling the corporation.

Zheng, L. (2020). We’re entering the age of corporate social justice. Harvard Business Review. https://hbr.org/2020/06/were-entering-the-age-of-corporate-social-justice