Friedman talks about this, actually, in the article. Basically, things like that (and charitable donations, etc) are done in self-interest, and cloaked under the guise of "Social Responsibility." However, the real motivating factor is increased profits, and the "Corporate Goodwill" is merely a positive by-product.
Sammy's got it right. When corporate executives/managers make decisions in the name of "Social Responsibility," what they are, in effect, doing is imposing taxes, and then deciding how to spend them. Then, in turn, they become not agents of the principals (company's owners), but public servants, although they remain under the employ of the company's owners. This, Friedman notes, is intolerable as public servants are elected to their positions in a democratic society, with certain "political machinery" put in place to oversee the taxation process.
If you haven't read it, you should. It's quite a bit more in-depth and complicated than the name suggests at first glance.
Quote:
Originally Posted by onewhippedpuppy
Fiduciary duty pretty much sums it up. However, in recent years it's been shown that social responsibility can be used to boost profits. The stupidity of a $7 cup of coffee at Starbucks can be rationalized with the knowledge that Starbucks works to insure the working conditions of their Central American coffee farmers are up to par, and that they are paid well. So while I don't think it's a specific duty of businesses to contribute to charities/etc, the good PR can often spin into increased profits. |