Profit plays a significant role in a free enterprise economy.
Management (or managing) is the administration of an organization, whether it is a business, a not-for-profit organization, or government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. This list of management research paper topics provides 100 key issues and topics that managers are confronting in the modern world. New technologies, globalization, and associated ethical implications frame many of these issues like the management of nonprofit, arts, healthcare, sports, and philanthropic organizations.
The Social Responsibility of Business: In Defense of Profits
Yes, there may be many of these cases, but that still does not counter the premise of my article: “The social responsibility of business is to increase profits by meeting the wants and needs of individuals in society, without the initiation of force.” The initiation of force includes poisoning, malming, and killing. These actions goes against the non-aggression principle.
The famous phrase, “The Social Responsibility of Business is to Increase its Profits” comes from the title of Milton Friedman’s article in The New York Times Magazine. It has been echoed countless times from folks in business, free market, libertarian, conservative, and/or republican circles. It has been ridiculed numerous times from folks in progressive, statist, socialist, liberal, and/or democratic circles. However, the phrase is accompanied by an all too often neglected (by supporters and detractors) caveat, that increasing profit must be sought without the initiation of force.
Essay; The Role of Business in Society
Maximizing profit is a different thing altogether. The article talks about “providing value.” However the goal with businesses who are truly focused on maximizing value is to convince you to spend as much as possible on something that costs as little as possible to make. The bulk of our society is awash in goods whose actual value is very little in comparison to what consumers are willing to pay, typically based on lots of false value created by psychologically sophisticated ads. Think of Nike’s Air Jordan hightops which were so valued teenagers would kill for a shoe that cost about $8 to manufacture. The other side of the coin is that employees need to be paid as little as possible for their labor. This is so entrenched in our psyche that when Google paid bonuses to its employees, the hardworking shareholders went into a tizzy.
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My issue with these kind of articles is they seem to deliberately confuse the goal of profit and maximizing profit. It has been a very long time since I have heard sustainability advocates argue that businesses should not turn a profit.
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While one can make the argument that it is the responsibility of managers in businesses to maximize profit, there is nothing socially responsible about doing so, as there is not a benefit that affects society at large. The only benefit is to the “owners,” 98% of whom bought the stock a week ago and will sell after the end of the quarter because the money manager needed to dress up his quarterly numbers.
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The initiation of force also extends to pollution. Say a company is dumping harsh chemicals onto your private property – that is considered an initiation of force and needs to be dealt with accordingly. A company using your backyard as a dumping zone without your permission is essentially increasing its profits through the use of force.
To say it fully and simply, the social responsibility of business is to increase profits by meeting the wants and needs of individuals in society, without the initiation of force. The latter part, “without the initiation of force” is often missed. And although implicitly understood, it needs to be made explicit to avoid confusion of profit at any and all costs. Only moving towards and open and free market, will we be able to better achieve profit without the initiation of force.