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There Is One and Only One Social Responsibility of Business - To Increase Its Profits.

The Friedman Model states that a business's only social responsibility is to increase profits for shareholders as long as it follows legal rules. The Ackerman Model outlines a 4-stage process for CSR involving identifying social problems, studying solutions, implementing projects, and evaluating outcomes. Carroll's pyramid model depicts a business's responsibilities as economic, legal, ethical, and discretionary/philanthropic, with economic responsibilities as the foundation. The Stockholders & Stakeholders Model identifies four perspectives on CSR: productivists see profit maximization as the sole mission; philanthropists prioritize moral obligations over self-interest; progressivists see self-interest driving social good; and ethical idealists advocate sharing profits for humanitarian causes.

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JOMARIE BARON
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106 views

There Is One and Only One Social Responsibility of Business - To Increase Its Profits.

The Friedman Model states that a business's only social responsibility is to increase profits for shareholders as long as it follows legal rules. The Ackerman Model outlines a 4-stage process for CSR involving identifying social problems, studying solutions, implementing projects, and evaluating outcomes. Carroll's pyramid model depicts a business's responsibilities as economic, legal, ethical, and discretionary/philanthropic, with economic responsibilities as the foundation. The Stockholders & Stakeholders Model identifies four perspectives on CSR: productivists see profit maximization as the sole mission; philanthropists prioritize moral obligations over self-interest; progressivists see self-interest driving social good; and ethical idealists advocate sharing profits for humanitarian causes.

Uploaded by

JOMARIE BARON
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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Friedman Model

“There is one and only one social responsibility of business — to increase


its profits.”
“There is one and only one social responsibility of business — to use it
resources and engage in activities designed to increase its profits so
long as it stays within the rules of the game, which is to say, engages in
open and free competition without deception or fraud.” -Milton
Friedman, New York Times Magazine, September 1970
, is the idea that a company's aim is to accumulate profit so it can then be redistributed amongst the shareholders.

 A businessmen should perform his duty well, he is performing a social as well as


a moral duty.
 A businessmen has no other social responsibility to perform except to serve his
shareholders & stockholders.

Ackerman Model (1976)


 The model has emphasized on the internal policy goals & their relation to the
CSR.
 Four stages involved in CSR.
 Managers of the company get to know the most common social problem
& then express a willingness to take a particular project which will solve
some social problems.
 Intensive study of the problem by hiring experts & getting their
suggestions to make it operational.
 Managers take up the project actively & work hard.
 Evaluating of the project by addressing the issues.

Carroll suggests that the social responsibility of an organization can be deconstructed


into four components: economic, legal, ethical, and discretionary responsibilities. The
four components could be depicted as a pyramid.
The pyramid starts with economic responsibility as a foundation; the component
Economic Responsibilities are the first and foremost responsibility of business. As the
basic economic unit in society, a business is responsible to provide goods or services
and make profit to create wealth. At the same time, rules and regulations are set for the
business to operate within certain limits. Meeting these rules constitutes the legal
responsibilities of the business. Besides the ethical norms embodied in the first two
categories, there are additional ethical actions which are not included in the law but
expected by society. The importance of ethical responsibilities has been well noticed,
although it is always an issue to judge what is and is not ethical. It is reasonable to say
that the ethical responsibilities are the expectations above legal requirements that
society has of business. Discretionary/philanthropic responsibilities are even vaguer
than ethical responsibilities. Society leaves these to the judgment and choice of
business. To fulfill these responsibilities, the social role of business is voluntary. The
decision to assume them is not required by law and is also above and beyond the sense
of ethics. It is only led by the business ‘s desire to be involved in this role and contribute
to society.

Carroll Model(1991)
 Philanthropic requirements: Donation, helping the poor. It ensure goodwill &
social welfare.
Ethical responsibility: Follow moral & ethical values to deal with all the stakeholders.
Economic responsibility: Maximize the shareholders value by paying good return.
Legal responsibility: Abiding the laws of the land.

Stockholders & Stakeholders Model


 Productvists believe that the only mission of a firm is to maximize the profit.
 Philanthropists who entertain the stockholders. CSR is dominated by moral
obligations & not self-interest.
 Progressivists believes the corporate behaviour basically motivated by self
interest & should have ability to transform the society for good.
 Ethical Idealism concern with sharing of corporate profits for humanitarian
activities.

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