Nowadays issues regarding whether businesses have social responsibility are hotly discussed. An article written by Milton Friedman claimed that the sole purpose of businesses is to maximize their profits. First, he argued that business is not a moral agent to assume responsibilities. Also, emphasizing too much on social responsibility makes a company be more centrally controlled which ultimately leads to less profits.
However, business ethics, including social responsibilities, are beneficial for the development of companies. To begin with, when people are discussing businesses’ behaviors, they are studying the decisions made by the employers in companies. Since employers are moral agents and they need to behave ethically under the social contract, it is reasonable to say that businesses or members in the companies have to take on their social responsibilities. Apart from that, contrary to what Friedman said in his article that earning profits is in conflicts with behaving ethically, companies in fact can raise their reputation by assuming some social responsibilities, a way that could increase profits.
Responsible stakeholders now are paying more and more attention to the reputation of the firms they choose to buy product from, or to cooperate with. For example, according to a survey done by Elizabeth H. Creyer, consumers are more willing to pay higher prices when corporate behaves ethically and they punish the unethical act by buying products at lower prices. Same logic applies to the cooperation between companies, which means that an ethical company can get more reliable partners.
Nike, the famous shoe brand, used to be criticized for sweatshops. Though having workers work under relatively bad working conditions is not against the law, Nike still chose to establish an apartment to elevate working conditions to restore the companies’ image. After Nike did that, protests aimed at sweatshops gradually disappeared and sales even jumped higher since the company was acting ethically. Therefore, it is proved that business ethics are positively linked to companies’ brand, an element plays an important role in helping companies earning profits.
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