The objective of this paper is to discuss the responsibilities as perceived by Milton Friedman (1970) and to counter his views by attributing the different view points of for and against the businesses assuming social responsibilities.
The economic responsibilities of a business organisation covers the expectations of the society that the organisations will manufacture goods and services which are needed by the customers and offer these goods and services to the customers at reasonable and affordable prices. The organisations have the additional responsibility of functioning more efficiently to be more profitable keeping the interests of the shareholders in mind (Carroll A.B, 1979).
The legal responsibilities of the business organisations focuses on the behaviour of the organizations to follow the various laws and regulations framed by the government with respect to the monitoring of the competition among different business entities. These regulations may relate to the rights of the consumers and product quality, environmental laws and employment laws concerning the conduct of the business. In 2003 Schwartz and Carroll further sub-divided the legal domain. They argued that there are three types of legal responsibilities: 1) compliance, 2) avoidance of civil litigation, and 3) anticipation of the law. (Schwarz and Carroll, 2003)
There are certain ethical responsibilities, which stretches the expectations from the organizations beyond those thrust by the legal provisions. This implies that the organizations have to undertake not only the responsibilities entrusted by the legal provisions but also extend the scope of their responsibilities to encompass proactive and positive efforts to meet the general norms of the society even if such norms are not prescribed by any law (Carroll and Buchholtz 2003).
There is yet another responsibility which the organizations have to undertake. These are the discretionary responsibilities which expect that the corporations behave as good citizens of the community by undertaking such activities which support social causes.
Friedman View of Social Responsibility of Businesses
According to Milton Friedman (1983) in a capitalist economy, there is the only responsibility of the business. It is related to engage in activities designed to maximize the revenues of the organisation - within the legal frameworks. This implies that the organisation have to compete in open and free competition without deception of fraud. The directors of a company have a fiduciary responsibility to safeguard the interests of the shareholders. However, because of the reasoning to enhance the economic benefits of the stockholders, the board of directors and the executives of the company can act in an unethical manner.
According to Friedman (1970) the managers has a direct responsibility to his employer to conduct the business of the company to maximize the profits. Thus the managers become the agent of the individual who is the owner of the business and their main responsibility is to execute things in the same order, as the owners want them to be. View of Friedman to managing business can be regarded as having a classical perspective. In this approach along with the purpose of an