The responsibility for companies to remain profitable has cultivated a norm to ignore business ethics. However, companies such as Coca-Cola, are striving to change this growing dilemma. Coca-Cola’s chairman, William E.Robinson, stated that a corporate executive did not just serve the stockholders, but also the workers, customers, and the community. This ideology directly links to Freeman’s Stakeholder Theory as he believes that by focusing on all of the groups involved that it will extend the life of a company as well as make capitalism tick. On the contrary, Milton Friedman disagrees with these ideologies as he believes a businesses’ priority should only be the stakeholder. He believes it is the business’s social responsibility to increase profit; devoting any other resource would be aiding charities with other people’s money. However, Friedman’s theory came during the time of hostile takeover and leveraged buyouts. Despite Friedman’s ideologies, other corporate executives have joined the charitable movement. In 2000, forty four businesses signed up to the United Nations’ global standards on human rights and environmental stewardship. Most companies believe this social system will benefit them in the long haul. Additionally, by aiding others in the public eye, it could subsequently increase the worth of the company as this intangible asset of the company’s reputation will increase. It is imperative for businesses to no longer only focus on shareholders; in order to succeed in this era it is necessary to aid the quality of life within the community.
Works sited
Porter, Eduardo. “Motivating Corporations to Do Good.” The New York Times. The New York Times, 15 July 2014. Web. 10 Sept. 2014. <http://www.nytimes.com/2014/07/16/business/the-do-good-corporation.html?_r=1>.