Introduction
Business is always aimed at making profit. Profit is the gain after subtracting the cost of production, labor and other expenses that a business has incurred. The business people should do everything possible to maximize their profits.
This is done by making sure that the costs are cut down, as much as possible. According to Milton Friedman, the social responsibility of a business is to make as much profits as possible. He emphasize that the sole purpose of a business is to make profit and the government is the one to be concerned with social responsibilities.
On the other hand, Robert Almeder recognizes that the purpose of business is to make profit but morality should be considered. The business people should always do what is morally right when purchasing their goods (Bonello and Lobo 2-6).
Profits should not always be the only motivation of business people; they should also work as a way of contributing to the society. They should always value their customers. Some people do not value their customers and all they do is work only for the purpose of profit thus not treating customers properly.
At the end they loss customers and the business collapse. In this case when starting a business one should also have the interest of people at heart. Friedman Milton also stated that businessmen do not believe that their businesses are merely for profits but they also promote desirable social ends (Bonello and Lobo 7-8).
There are two types of businesses. There are those businesses that are set up for making profits this includes private companies or private businesses. There are other businesses whose aim is not primarily making profit. This includes the nongovernmental organizations.
Their aim has always been to help the less fortunate and vulnerable people in the society. Organizations also can set up a business with the aim of helping their workers.
Businesses should also consider the environment where they are set and so they give back by providing money to care for the environment like tree planting projects or cleaning the environment. This paper will look at the profit not always being the business of businesses.
Friedman Milton view
According to Friedman Milton the greatest social responsibility of a business is to make profit. Business should do the best to maximize its profit. In capitalism profit is the motivator for starting up a business. He argues that when a business makes profit, it will be able to take part in other social responsibilities like providing employment and giving back to the community.
The businesses providing employment reduces discrimination and also contributes by avoiding environment pollution. With the global problem of unemployment, people are being encouraged to start up businesses as a form of employment. These businesses grow and at the end many people get employed.
With this, it’s clear that businesses are not always for the purposes of making profit to the owner but also for employing people in the society. Friedman Almeder refers to this as the social responsibility of a business (Bonello and Lobo 9-11). He gave example with Corporations.
They are mostly set up by a group of people in order to render services to its members. They might set up institutions like hospitals or schools. The executives in a corporation is employed by the members of the corporation and expected to conduct the business in a way to make profit. These corporations do not make profits but target on assisting their members and stakeholders.
Friedman stated that a corporation is an artificial person and it has responsibilities. The executive is expected to make much money and abide to the business rules. The corporations experience problems as the executives try to gain money and contribute to social responsibilities. The executive has responsibilities of not raising prices to customers to avoid increasing inflation.
He might take the risk of contributing the corporation money for environment maintenance. The executive might also prefer to employ the unemployed people leaving out the skilled ones with the aim of contributing to social responsibility. Friedman states that this should be the responsibilities of the executive and not responsibilities of the corporation.
He maintains that the government should take up the social responsibilities and not the corporation (Bonello and Lobo 12-13). The executive should not take the role of imposing taxes on employees or deciding how the taxes should be used in social responsibilities. Friedman insists that this is the role of government.
The government is the one to use political principle in imposition of tax and decide on how it would be used for social responsibility. Executives should not take the roles of legislator to decide who to be taxed and by how much. This may lead to corporations not making profits as desired by the owners.
This may also lead to exploitation of employees thus not respecting their human rights. Friedman stated that trade unions that restrain employees’ wages in order to contribute to social responsibility may lead to strikes and business failure. Friedman insists that corporations should only use its resources to increase its profits (Bonello and Lobo15).
Robert Almeder view
According to Robert Almeder, if businesses solely focus on maximization of profits they may end up causing inflation and this causes more harm to the society. This causes uneven distribution of wealth because of the tricks business people use to extract extra money from people. This distorts the economy in a country and for this reason business should not only consider making profit as the only business.
The economy should satisfy the needs of all people in the society but not a few. For this reason business people should not think of their own interest but also the impact in the society. Robert insists on principle of morality. He states that the businessmen should do what is morally right and they should not go against human rights in order to make profits (Bonello and Lobo 17).
According to Robert, some business people may not consider making profit as their only business but they might consider getting a market by lowering their prices to compete with the other businesses. Other ventures may consider using working capital that is normally used for marketing by lowering their prices.
With this they attract customers who might end up being retained even after they raise their prices. A company may also consider lowering its prices in order to get back its shares from public or the private investors. With this, the remaining investors get more profit for their shares.
This lowers the profit of the company and pushes the company’s stock. Other companies may consider not making profit at the moment but increase their cash flow. This is essential for it ensures long term profits but it does not exploit the customers (Bonello and Lobo15-17).
This helps the company to expand. For long survival of a company it must satisfy the customers, employees, shareholders, and the society at large. For long term survival of the business, profit is not always their only business.
Profit maximization might lead to greed. This leads to exploitation of the workers and customers. The workers might stop cooperating and this may lead to organization failure. The organizations should consider gaining sufficient profit for long term survival and avoid losses rather than maximizing profit (Bonello and Lobo 19).
A business should not only be for profit purposes but also for benefiting people. For its sustainability, a business should aim at contributing to people, environment and to the society. Profit is an essential part of business for its sustainability to continue helping people and the environment. Thus, a business should work towards making profit but not making it as the only business.
The principle of social responsibility investing has been put in place to encourage investors in the society. It attracts investors with their interest to contributing to the society. This ensures sustainability of a business through its financial marketing.
This principal has led to many changes in the societies. Changes like women empowerment, increased employment among young people, and this has also contributed to globalization. Lowered prices benefit the people in a society. This creates equality among the people in a community.
This is important for it acts in reducing discrimination among people (Bonello & Lobo 18). Business people should work towards lowering the prices. This benefits them for they get many customers thus not holding goods till they expire.
Some business people are too mean and they pretend to be considerate to the society by giving offers to goods that have expired. With this they only think of making profits and not incurring losses. This people do not consider the rights of the consumers.
The government should charge heavy fines to such business people (Bonello and Lobo 5). Robert insists that the government should be minimally involved in the businessmen decisions of social responsibilities.
He emphasizes that government should be involved in protecting human rights of the customers and employees to avoid being exploited by businessmen in their effort to maximize profit (Bonello & Lobo 19).
Conclusion
Friedman Milton insists that the purpose of a business is to make profits. He also recognizes that businesses have social responsibilities of providing employment, reducing discrimination, and caring for environment. He emphasizes on capitalism of the business. The business should use its resources to increase profits.
Robert Almeder on the other hand insists on application of morality in businesses. The businessmen should do what is morally right. They should not exploit their employees and customers.
Robert insists that the government should ban import of goods from the countries that exploit their employees and customers in order to maximize profits. The main goal of starting a business is usually for making profits and this is important for its survival. If a business set up for making profit fails to do so, it might collapse.
This calls for careful organization in order to make profit; but the owner should not consider making profit as his only business. We should always put into consideration other benefits of a business. With this even when a business fails to make profit for some reason, the owner should not give up for there are other motivations.
Work Cited
Bonello Frank and Lobo, Isobel. Taking Sides Clashing Views on Economic Issues, 13th edition. New York: McGraw hill, 2007