Do Businesses have an alternative motive for being Socially Responsible?
Oct 1st, 2010 by monicamoran
In one of our Comm 101 classes, we were asked to contemplate Milton Friedman’s belief that the “only social responsibility of a business is to earn profits while following the law and basic ethical principles.” In other words, Friedman believes that business only act socially responsible to build a reputation with the consumers in order to increase demand. This got me thinking, and I finally came to the conclusion – based on business news – that in the majority of cases, Friedman makes a valid point.
In reality, the main purpose of a business is to earn profit, and they do as much as they can to accomplish this goal. Therefore, yes, Friedman, is right to say that businesses only act social responsibility for the sake of it; they don’t do it for the better good but for themselves. Furthermore, most businesses undertake social responsibility to boost their reputation and brand image. Companies need to create a positive image in order to gain a competitive advantage in the business.
For instance, the Body Shop, at one period, created controversy because of their stand on animal rights. Primarily, the Body Shop acted socially responsible by advocating animal rights. Yet in 2006, people were stunned to learn that they had merged with L’Oreal, a company known for animal testing, thus making customers question their true standpoint. Obviously, merging with a large and well-known company such as L’Oreal will be a significant advantage to the Body Shop as it will allow them to become more financially stable and boost its brand loyalty. So was advocating animal rights a way for Body Shop to increase its reputation? If they were indeed sincere about their viewpoint, I believe that the Body Shop should not have merged with L’Oreal, but evidently their main purpose of doing this was to increase their sales, thus supporting Friedman’s statement.