In the modern world, economic resources are the most significant assets. Numerous businesses and corporations emerge to provide customers with products or services and obtain some profits in exchange for them. That is why some people, including Friedman, stipulate that the primary social responsibility of a business is to increase its profits. It is because “the expansion of wealth and well-being go hand-in-hand” is one of the leading goals in the modern world (Peacock and Hossein 26). However, this idea has a few opponents, and Glasbeek is among them. Individuals from this group insist on the fact that corporations should draw specific attention to their activity because they have a possibility to impact society. Thus, the main task of the given paper is to explain whether the corporation should have legal and ethical obligations to society and compare Friedman’s critique of the topic with Glasbeek’s one.
To begin with, one should explain what corporate social responsibility (CSR) is. This term “refers more to the need for corporations to consider their impacts on society in relation to their fiduciary obligation to their shareholders” (Peacock 72). This definition means that a business should focus on profits and follow social rules simultaneously. Even though there is a claim that corporations are not socially responsible because they are inanimate objects, this idea is not valid for the modern world. It is so because businesses can enter into formal relationships with individuals and other companies. Consequently, they work within a community and cooperate with its members, which establishes legal and ethical obligations.
On the one hand, no one can deny that every business should follow laws. If this obligation is not preserved, such a company or corporation faces criticism and legal issues that can even endanger its existence. Furthermore, corporations should sometimes prove that their activity is fair to avoid problems. On the other hand, corporations should also draw attention to an ethical part of their operation. Here, it is necessary to emphasize that ethics stands for “the principles and rules people use to determine (and govern) how people should act in society” (Peacock and Wellen 211). In some communities, euthanasia is a useful option under some conditions, while other societies consider it unethical. Another example of ethical behavior is when both parties to a transaction benefit from it (Friedman, Capitalism and Freedom 13). Thus, a corporation should not be allowed to violate any of the obligations mentioned above.
Glasbeek supports the ideas above and explains possible adverse outcomes that can emerge when corporations only focus on increasing their profits. Firstly, he explains that individuals who own corporations often defy the civilizing bonds and values to obtain more financial benefits (Glasbeek 73). It means that the desire to earn more makes these businesses ignore their obligations. Glasbeek emphasizes that it is a typical case when a company violates the law without any hesitation (175). Secondly, there is an opinion that corporations “work to change the laws that reflect and protect important values” (Glasbeek 73).
As a result, when businesses are not legally obliged, they are free to take any action that they want. Finally, the scholar concludes that the release of the corporations from obligations that are imposed by society creates a criminal environment. He proves it by mentioning that 60% of American corporations have violated the “laws to which penal sanctions are attached” at least once (Glasbeek 77). The information above demonstrates that businesses should have some responsibility to eliminate their illegal conduct.
At the same time, Friedman presents the opposite point of view concerning the issue under consideration. In his essay, this American economist states that the ideas that a business has social responsibility “are notable for their analytical looseness and lack of rigor” (Friedman, “The Social Responsibility” 1). Friedman also explains that shareholders own corporations, which provides these individuals with the sole right to determine how to spend their money. Thus, if any ethical or legal issue arises, people are responsible for it. At the same time, the scholar does not state that it is necessary to neglect the external environment. Thus, he mentions that the primary responsibility is “to make as much money as possible while conforming to the basic rules of the society” (Friedman, “The Social Responsibility” 1). Thus, it is possible to mention that Friedman’s argument is that shareholder interests are predominant in comparison with other obligations. Consequently, a corporation is only considered successful when it generates some profits.
According to the information above, Friedman and Glasbeek have proposed the opposite opinions concerning the social responsibility of the corporation. It is a challenging task to define which thought is more valid. On the one hand, Glasbeek has managed to offer solid reasoning that the absence of any obligations allows corporations to violate numerous rules and laws, which creates a deteriorated society. On the other hand, Friedman explains that the corporation, an inanimate object, cannot have any responsibility, and its task only is to increase profits.
However, it seems that society will prosper if the two approaches are combined. Firstly, a business should generate some financial benefits to provide its shareholders, employees, customers, and the whole society with economic advantages. Secondly, every corporation is an active member of the modern world. That is why it should abide by social and ethical obligations to make sure that its desire to earn more does not harm the community and its members. Thus, one can conclude that corporate social responsibility is a challenging issue, and its significant task is to ascertain that businesses do not generate adverse impacts on society.
Works Cited
Friedman, Milton. Capitalism and Freedom: Fortieth Anniversary Edition. University of Chicago Press, 2002.
—. “The Social Responsibility of Business Is to Increase its Profits.” The New York Times Magazine, 1970. Web.
Glasbeek, Harry. Class Privilege: How Law Shelters Shareholders and Coddles Capitalism. Between the Lines, 2018.
Peacock, Mark. “Corporate Responsibility.” Business and Society: A Critical Introduction, edited by Kean Birch et al., Zeb Books Ltd., 2017, pp. 71-86.
Peacock, Mark and Caroline S. Hossein. “The Spread of Capitalism.” Business and Society: A Critical Introduction, edited by Kean Birch et al., Zeb Books Ltd., 2017, pp. 26-41.
Peacock, Mark and Richard Wellen. “Ethics and Business.” Business and Society: A Critical Introduction, edited by Kean Birch et al., Zeb Books Ltd., 2017, pp. 211-224.