Business Ethics and Corporate Governance, Second Edition

WHY SOCIAL RESPONSIBILITY OF BUSINESS?

‘The business of business is business’ was the motto of businesspersons in early times. Narrowly interpreted, it would mean that corporations have only one responsibility, the single-minded pursuit of profit. To economists like Adam Smith and Milton Friedman, in a capitalist society profit maximization by the continued increase of efficiency is the most socially responsible way of conducting business. This implies making quick money, with utter disregard for the responsibility of business towards society. This limited view of business would prove to be counter productive in the long run. But on the other hand, the long range view of business, which would imply an aim at the long term gains rather than at ...