The assertion by Milton Friedman that the only social responsibility of a business is to increase profits, provided it is operating within stipulated laws (Friedman, 1970), is wrong. This is because, contrary to Friedman’s argument that a corporation cannot have responsibility as human beings which excludes them from social responsibility, corporations actually have legal as well as moral responsibilities ( Carroll & Shabana, 2010) . This is because corporations engage in business contracts with individuals and other businesses which make them to have a legal and moral responsibility to observe the contracts.
Friedman also argues that businesses only need to ensure that they stay within the set rules (Friedman, 1970). However, it has to be noted that there are rules which are not coded in law that corporations must follow for them to survive in the market. This includes the unwritten rules on demand and supply, and consumer satisfaction ( Carroll & Shabana, 2010) . Conforming to acceptable legal requirements may help a corporation to avoid legal problems. However, for it to survive and maintain a good relationship with customers, shareholders, employees, regulators, communities, and shareholders, it has to hold itself accountable to higher standards. One of this standards involves being socially responsible.
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One of the companies which have received backlash from consumers and activists for failure to be socially responsible is Nestle. In 2010, Nestle faced a protest by consumers and environment activists due to engaging with suppliers who were not environmentally friendly ( Carroll & Shabana, 2010) . As such, while Nestle observed all the set laws, its profitability was in jeopardy for failure to be socially responsible.
As such if corporations are can have responsibilities and if they must follow rules which are beyond those put in law, then the premises behind Friedman’s argument are invalid. This them implies that the social responsibility of corporations is not only about increasing profits.
References
Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews , 12 (1), 85-105.
Friedman, M. (1970, September 13). The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine
