Milton Friedman argued business managers should not focus on corporate social responsibility, because that detracts from the ultimate goal of a business – to maximize profits. Well, with all due respect to the late Mr. Friedman, I’d say his theory no longer applies.

Times have changed.

To maximize profits, products must be engineered towards consumer preferences. These days, consumer preferences are leaning towards transparent and ethical companies. According to an International Business Times article, even big food firms are aiming to become more socially responsible. The article cites an example from NPR, which had reported on Nestle’s new rules concerning treatment of animals. The article also mentioned a  Reuters piece which had covered Kellogg’s Co.’s promises of reducing greenhouse gas emissions.

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Edward Freeman’s stakeholder theory says all internal and external stakeholders must work together to prevent a business from declining. Consequently, consumers (external stakeholders), are now getting a say in company operations. They want companies with good business ethics, and if shareholders don’t listen, even if they are industry leaders (like Nestle and Kellogg’s), they’ll find themselves in decline.

Perhaps the shift these companies have made towards corporate social responsibility is less about morals and more about marketing a brand image. But if this change maximizes profits, helps the environment and community, and leaves consumers happy, then it could be considered a win-win situation.

References:

Article: http://www.ibtimes.com/big-food-must-invest-social-responsibility-thrive-experts-say-16719

Image Source: http://www.naturalfoodfinder.co.uk/sites/default/files/images/kelloggs2.jpg