Introduction
Indeed, the CSR area has long discussed what the purpose of business should be. In this best case, the key controversy is that Milton Friedman and his followers advocated for profit maximization as the number one priority, unlike other people arguing that businesses can be successful by doing good because making a profit has always been a social responsibility according to the 1970s proposal made by Friedman. This theory states that business leaders should not be driven by ethical thoughts and the common good while making their decisions. In opposition to Friedman’s concept, it is argued that a successful business simultaneously can do good things and benefit society. It is justifiable to presume that the companies will play their part in society in a manner above and beyond making profit maximization. This reasonable expectation is explored in this paper as part of the conversation on corporate social responsibility. Hence, the research analyzes the concept of CSR based on two scholars’ views – Wettstein and Bakan, in order to reveal core nuances for connecting it with financial goals.
Milton Friedman’s concept of business and social responsibility
Milton Friedman is an economist and a Nobel laureate who argues strongly for the business ethic that seeks profit maximization. According to Milton Friedman’s 1970 article, companies have no social responsibilities other than increasing profits for their shareholders. According to this school of thought, CEOs should not let themselves be swayed by thoughts of advancing larger social objectives or ethical standards, as the point of enterprises is to produce money for their owners (Wettstein, 2018). According to Friedman, business leaders should not even attempt to address social and ethical issues but instead focus solely on increasing profits for their shareholders.
According to Friedman, anything that takes away from the sole purpose of any business – profit maximization – is a goal in itself. Putting the public interest first or obeying ethical values makes businesses appear inefficient and less competitive. This insatiable hunger for profit has truly changed the decisions and activities of businesses. An undeniable characteristic of Friedman’s influence is the dominance of profit-driven initiatives that sometimes ignore broader social and ethical implications (Wettstein, 2018). Such a view influences general business behavior, not only corporate one, as it supports a paradigm that considers financial success to be more significant than social issues.
Besides Friedman’s arguments, it is also important to consider how profit maximization affects enterprises and society in general for a full understanding of his position. For many institutions, this profit-centred approach has been carried out almost blindly. However, ethical and sustainability critics of corporations’ social roles have emerged, demanding a change to their position in society.
Alternative Views on Corporate Social Responsibility
With respect to CSR, a continuous controversy concerns whether the purpose of an organization reaches beyond mere shareholder value maximization and necessitates ‘doing good.’ This alternative approach, which is contrasted with Friedman’s profit-oriented idea, suggests that organizations can serve as drivers for societal development rather than gaining profits (Wettstein, 2018). Proponents of these perspectives argue that social responsibility does not need to conflict with material wealth but rather can be supported by it. The discourse subverts the dominant narrative, proposing that businesses can profit and yet contribute positively to society; such a development benefits both business and the community.
However, critics of CSR claim that business owners might be doing good things if they adopt such practices. This requires efforts not only to obey all relevant laws and regulations but also to make society as a whole better along with the environment. Corporations contribute to society in various ways, including charitable giving, community development project support, and the implementation of environmentally friendly policies. This positive public perception of a company and potentially even more loyal consumers are not the only benefits that companies who do this reap—they also get to have done the right thing. Instead, companies should not treat CSR as something that undermines their profitability but value it for the mutual rewards they will accrue. It is possible that businesses would be more resistant and durable in the future if they included ethical factors in their decision-making processes.
Whenever companies fight for what is just, they usually build relationships that are more intimate with their stakeholders – customers, workforce, and shareholders alike. To meet customers’ requirements for environmentally conscious and morally produced goods, companies might innovate by investigating socially responsible practices (Wettstein, 2018). Key to this second view is the assumption that ethical values are inherent in corporate decision-making. Ethical concerns assist organizations in going through challenging cases and selecting variants that correspond to society’s standards and values. Through C SR initiatives, companies can positively impact people and the earth while keeping their profit margins.
The View on Corporate Social Responsibility by Wettstein
Through a sophisticated business ethics perspective, including CSR, Wettstein challenges the profit-centered paradigm promoted by Milton Friedman et al. As Wettstein contends, businesses should be guided by a broader ethical code than only making money. Wettstein advocates for a business culture that reflects the interdependence of companies and society, calling upon ethical behavior and social engagement (Wettstein, 2023). On the contrary, he maintains that businesses should create better societies through output and not just go into business to make profits. This is not only removing harm but actively seeking out ways to improve social and environmental factors. Wettstein takes this position in an effort to stimulate a broader view of corporate accountability, one that is beyond the mere focus on profit.
Wettstein’s approach is focused on corporate social responsibility and the protection of the environment. He believes corporations can do social good by solving societal issues using their expertise, finance, and influence. This point of view aligns with the increasing number of people concerned about global warming, economic disparity, and social injustice. Wettstein contends that corporations must internalize the social responsibility aspects of business and not treat it as an add-on. Wettstein’s model for integrating economic gain and social conscience makes the win-win relationship apparent. Besides having a positive impact on society, businesses should be run ethically and pursue maximal financial results (Wettstein, 2023). Acknowledging that profit and social responsibility are not inconsistent appears to be beneficial for business entities and society. Wettstein argues that CSR and profitability are not necessarily mutually exclusive goals but can, in fact, be concurrent ideals.
Bakan’s Perspective on Corporate Social Responsibility
In turn, from Bakan’s point of view, we can understand how CSR influences society and the necessity for accountability beyond financial gains. According to Bakan, however, some practices are unethical, and they influence morality and society. As argued by Bakan, companies have the moral duty to maximize profits regardless of how it affects society. He argues that companies have a moral and feel bound legal obligation to give their shareholders pre-eminence (Wettstein, 2018). A healthy obsession with profit, Bakan argues, can result in the complete disregard of a social and ethical issue, let alone normalizing exploitative practices that harm our ecosystem. On that basis, his role raises the question of the assumption that unrestricted business will benefit society.
Bakan argues that businesses have legal and ethical responsibilities for which current regulatory frameworks should be reevaluated. However, he asserts that the current legislative framework does not consider corporate actions on a wide enough scale. This requires companies to be made accountable on issues of morality and legality (Nardella & Brammer, 2021). Bakan claims that new legislation should be introduced to force firms to develop their business so as to reflect the interests of society, which will help fill the gap between social responsibility and profit.
Self-regulation and voluntary measures are not enough to provide organizational accountability within society, according to Bakan’s focus of concern. He supports a beefed-up model where companies are mandated to take responsibility for their social, environmental, and moral influences, as portrayed by Wettstein in 2018. This view undermines the assumption that voluntary activities are sufficient to ensure corporate accountability. This discourse thus recommends a proactive position, emphasizing the need for increased responsibility and accountability in corporate citizenship. This approach is consistent with the recognition that corporate entities, which play important roles in society, also need to go beyond compliance but should contribute positively towards societal fate (Luyckx et al., 2022). This movement towards an accountable corporate ethos can thus be considered as a paradigm shift that demands businesses to do more than merely abide by the regulatory process; they must actively participate in ethical considerations together with environmental and social concerns for the overall benefit of society.
Balancing Profit and Social Responsibility
Keeping in mind the very complex CSR environment, striving for an equilibrium between making money and being a responsible citizen is not easy to achieve. This study, therefore, explores how firms apply several ways of integrating social responsibility into their operations so as to achieve healthy balance between the profitability and contributions towards society (Bilchitz, 2021). One way to move towards corporate social responsibility is by making ethical issues a major element of an organization’s mission and values. This is because,when companies internalize social and environmental responsibility as a core value to them it can act as the guide for employees on ethical behaviour. Using the connection between organizational goals and social utility, this approach focuses on a dynamic model that goes beyond profit maximizing.
Considering various cases of successful companies that have shown the ability to combine profits with social relevance could contribute positively to understanding how CSR can be incorporated into corporate activities. On the other hand, social responsibility is not a deterrent to success but can be and indeed has become an opportunity for competitive advantage, as these cases illustrate (Schrempf et al., 2022). The best companies are those who not only find this balance but also deliver new ideas to the communities they serve. Possible choices include sustainable corporate practices, community involvement, and philanthropy.
However, striving to be a proper corporate citizen comes with obstacles and limitations. The assessment of risks that might arise must also encompass concerns with respect to sustainability-related costs, the possibility of challenging shareholders’ interests, and difficulties in measuring the success of CSR initiatives. Recognizing them is essential for establishing appropriate expectations, as well as realistic plans that take into account the nuances of combining business goals with a broader commitment to societal objectives.VII.
Conclusion
It is a contentious issue of CSR that Friedman, Wettstein, Bakan, and others have strong views on. In this paper, we have addressed how the opportunity for corporate growth still being to society’s benefit is at odds with Friedman’s profit-driven agenda. Could companies, following Wettstein and Bakan’s study of the ethical integration of legal frameworks, be able to make systematic choices for their social responsibility? An assessment of the most critical issues reveals that such businesses should be more socially conscious and diverse. It is possible to show that doing the right thing and making a profit is not the opposite because the business segment with a strong emphasis on social responsibility operates better. Integration issues need expertise. Corporate social responsibility calls for the balancing of profit and society’s impact; innovative problem-solving, coupled with careful planning, is required in this regard. A more recent trend in discussions is about the impossibility of universal application standards to business ethics. And while any company aims to become profitable, a more sophisticated approach considers that some sectors have specific demands and aspirations.
References
Bilchitz, D. (2021). Fundamental rights and the legal obligations of business. Cambridge University Press.
Luyckx, J., Schneider, A., & Kourula, A. (2022). Learning from alternatives: Analyzing alternative ways of organizing as starting points for improving the corporation. In The corporation: Rethinking the iconic form of business organization (Vol. 78, pp. 209-231). Emerald Publishing Limited.
Nardella, G., & Brammer, S. (2021). CORPORATE SOCIAL RESPONSIBILITY. The Oxford handbook of international business strategy, 401.
Schrempf-Stirling, J., Van Buren III, H. J., & Wettstein, F. (2022). Human rights: A promising perspective for Business & Society. Business & Society, 61(5), 1282-1321.
Wettstein, F. (2023). Corporate responsibility. In Teaching Business and Human Rights (pp. 13-25). Edward Elgar Publishing.
Wettstein, F. (2018). Social responsibility. In The Routledge Companion to Business Ethics (pp. 167-183). Routledge.
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