Assignment #
For the most part, I do agree with the statement of Milton Friedman. As he pointed out, social responsibility in business is a term that is often misused, and people generally do not have a clear idea about who should bear this responsibility and what actions should be connected with it. A corporate executive, generally holding a position of a CEO, is a person responsible for the majority of business functions performed by a corporation. He acts in the interests of the shareholders that own the company he works for. As a result, his main goals as a CEO are centered on increasing profits of the shareholders. Actions connected to social responsibility are usually not profitable for the shareholders or for the company, because they require lowering prices of the company’s products, or improving the society by using money that could be spent to improve the company. Individual business owners do not have to report to shareholders, they can bear the costs associated with social responsibility by themselves. However, their employees and their company would still suffer. Still, I don’t think that there is no place for morality in corporations. It is true that companies exist to make profit by selling products and services. But it is also true that only companies that have strong values, mission and goals become really successful and operate for a long time. I think that corporations must improve the society with the help of their products, by promoting progress through innovation and research, by operating according to the market rules and governmental policies, by being aware of the results that their operations have on the environment and the people, and by taking responsibility for their actions. However, corporations are not charities, and they are not supposed to direct all their actions at saving lives or rescuing the planet.
I found some points that support my argument in the case of AIDS in Africa. It is true that pharmaceutical companies could have done much more to battle the disease, and their position was very self-centered. For example, they could have allowed poor countries to produce generic versions of their drugs during epidemics or massive outbreaks of serious illnesses. Instead, these companies were too afraid to endanger the patent system that was the main support of their success and growth. However, pharmaceutical companies had strong reasons for their actions as well. Without this system, they would not be motivated to invest tens of billions of dollars into researching and developing new drugs, testing them, and waiting for years to get the FDA approval to sell the drug on the market. As a result, developing a cure for major illnesses would take a lot more time, and it would be even less available, most likely. Additionally, lowering prices on drugs and treatment would not solve the problem. Poverty, corruption, horrible living conditions and environmental problems in Africa were contributing to development of AIDS and made it very hard to treat the patients even if the medicine and treatment were more available.
The case of Shell in Nigeria reflects my point of view even better. In that situation, the company followed its business principles and values. They helped the Niger Delta region by investing tens of millions of dollars each year in schools, hospitals, and infrastructure. However, the management faced the same problem as was discussed at the beginning of this paper. They did not know how exactly they should help the people of that region, how much help should Shell provide, and in what form. Shell was also accused of polluting the region through their production of gas and oil. However, the company also spent a lot of money and offered options of solving this problem. Actually, the majority of problems were caused by the Nigerian government, corruption, and unstable political situation. In my opinion, corporations should not interfere in politics, so Shell did not do anything horrible by staying out of that situation.
Works Cited
Friedman, Milton. “The Social Responsibility of Business is to Increase its Profits”. The New York Times Magazine. (13 Sep. 1970). Web. 5 Dec. 2014
Pain, Lynn, and Mihnea Moldoveanu. “Royal Dutch/Shell in Nigeria”. Harvard Business Review 9-399-126 (Rev. 20 Apr. 2000. Web. 5 Dec. 2014
Spar, Debora, and Nicholas Bartlett. “Life, Death and Property Rights: The Pharmaceutical Industry Faces AIDS in Africa”. Harvard Business Review 9-702-049 (Rev. 30 Nov. 2005). Web. 5 Dec. 2014
