Dueto his contribution in the field of economics, Milton Friedmanreceived the “Nobel Memorial Prize in Economic Sciences” in 1976.He had a huge contribution in the filed of economics and some of hisneo-liberal economic views have been adopted in different parts ofthe world, mainly the United States and United Kingdom. MiltonFriedman argued in favor of social responsibility through theshareholder approach rather than the corporate social responsibility. He stated that “there is one and only one social responsibility ofbusiness – to use its resources and engage in activities designedto increase its profits so long as it stays within the rules of thegame, which is to say, engages in open and free competition withoutdeception or fraud”. He argued that business organization shouldnot strive to be socially responsible because this is theresponsibility of the shareholders (Theaker, 2013).
However,I would not agree Milton Friedman mainly because in the modernbusiness environment, corporate social responsibility, especially inrelation to the immediate society and the environment has become amoral and ethical responsibility of corporate organizations. There isan increased demand from the society and interest groups forcompanies to incorporate social responsibilities in their corporatedecisions. Due to this demand, corporate organizations have found itinevitable to spend resources in corporate social responsibility.Business organization is separate entities from their shareholders.They do not operate in isolation. Corporate social responsibilitiesin the modern business have several impacts on the organizationperformance and reputation. Corporate actions in relation to thesociety and the environment affects the choice of organizations firmis likely to do business with. When making decisions on investmentand business ventures, business organizations and investors in themodern world consider the social responsibility actions of apotential target. Due to increased expectations of corporateactions, corporate social responsibility has evolved into animportant branding and marketing tool in the modern world. Therefore,it a business organization is more active in its socialresponsibilities, there is an increased shareholders’ value(Salvatore, 2015).
Basically,an illegal act is an act that is against the law, while an unethicalact goes against the moral values of the society. Laws can bedefined as rules and regulations that are enforced by the governmentwith an aim of establishing a disciplined society. On the other hand,moral values are based of the culture of the society and aims atpromoting harmonious living. Unethical act is what is considered tobe wrong, according to the immediate society. While illegal actionsare also unethical, unethical actions are not necessarily illegal(Froeb et al, 2015). For example, racial or gender discrimination inrecruitment and selection or biasness and prejudice in the workplaceis both illegal and unethical. This is because it is against the lawand morality in the society. Other examples of illegal and unethicalactivities include exploitation of workers, tax evasion andirresponsible dumping of toxic waste. However, some unethical orillegal behaviors are universally acceptable. For example, it wouldbe unethical for a mining company to ignore the inconveniences causedby its activities to the people living close to the mines. This maynot be illegal because there is no law that requires the company tobe concern about the inconveniences but the “don’t care”attitude of the company is unethical. Another example of unethicalactivity which is not illegal is taking advantage of less informedsegment of the population in marketing activity since persuasion isnot considered an economic crime.
Froeb,L. M., McCann, B. T., Ward, M. R., & Shor, M. (2015).Managerialeconomics: A problem solving approach (4thed.). Boston, MA: Cengage Learning.
Salvatore,D. (2015). Managerialeconomics in a global economy,(8th ed.). New York, NY: Oxford University Press.
Theaker,A. (2013). ThePublic Relations Handbook,New York, NY. Routledge.