Professor Tichenor

JSEM: Social Justice and the Bottom Line

July 5, 2017

Perspectives on the Friedman and Handy Articles

Is it morally wrong for a business to put profit before philanthropy? Friedman and

Handy’s perspectives measure the significance of CSR (Corporate Social Responsibility) while

answering this question through opposing beliefs. Friedman puts profit first while Handy

prioritizes CSR. Although both authors provide interesting perspectives with points I both agree

and disagree with, I find Handy’s stance more favorable.

Friedman’s view on CSR is a utilitarian view that focuses on efficiently allocating

resources without cheating, but by playing by the rules of free competition. He makes it clear

that he believes business should have a higher priority than CSR. By seeing CSR through his

lense, he is diverting from the social aspects of business and explaining that a company's main

responsibility should be to make as much money as possible. He even says that “there are no

‘social’ responsibilities.” He views social responsibility as nothing more than values shared by a

society. In other words, CSR is simply shared responsibility among the individuals. The keyword

here is individuals. He doesn’t say a corporation as a whole has social responsibilities, but rather

that the individuals who make up the corporation do. Friedman asks “What does it mean to say

that ‘business’ has responsibilities? Only people can have responsibilities. A corporation is an

artificial person…” I admire this quote because I do agree that a corporation can be personified
by how it behaves; the outcomes ensued give corporations an artificial face to the company. I

also believe that maximizing profit is a priority. However, I don’t agree with his entire

perspective on CSR.

Friedman's approach to remove the social aspect of CSR is atypical. What about

pollution? What about climate change? Are these economic issues things to be ignored in spite of

a company's goal to make as much money as they can? From an economist’s view, certainly not.

I also don’t believe that a company needs to completely ignore the environment to make money.

Although Friedman’s views might seem like the logical textbook answers, I don’t believe it is

ethically correct. Handy on the other hand (pun intended) views CSR from a moral perspective.

Handy believes CSR is significant and that the capitalistic approach, such as Friedman’s,

only seeks to serve its users and not society. He wonderfully puts that “Corporate governance

will now surely be taken more seriously by all concerned, with responsibilities more clearly

defined, penalties spelled out, and watch dogs appointed. But these will be plasters on an open

sore. They will not cure the disease that lies at the core of the business culture.” I love this quote

because Handy bluntly explains that regardless of the fact that there are legal consequences to

the negative externalities that companies create, they will continue to commit the same crimes.

He compares this corporate crime to a bandaid on an open sore; although the scar is covered up

through CSR, the wound is still there. Companies such as Target take ethical and discretionary

responsibilities to give back to the community. Since 2010, Target has given five percent of

profits to local communities. Google also has a CSR initiative called Google Green, which

invests in real-world efforts supporting renewable energy and affects the bottom line. These

examples are proof that companies that implement CSR create good reputations, which supports
Handy’s standpoint. Handy also believes that the purposes of a business has distorted due to

capitalistic shareholders who take ownership just for the money. The problem here is that

shareholders are not part of the daily operations. I agree that the greedy culture of business has

distorted its purpose and meaning. However, we still benefit from this greedy culture. It has also

created more competitive markets that help businesses thrive through competition. Both

Friedman and Handy share reasonable perspectives on CSR, however I sympathize more with

Handy’s perspectives.

Is it morally wrong for a business to put profit before philanthropy? Personally, I believe

there should be justice for immoral corporate crimes against society. CSR and Philanthropy is an

important factor that I look for in a good business. Maximizing profit should be a priority,

however ignoring CSR puts a bad reputation on a company’s artificial face. CSR doesn’t need to

be ignored to make profit. Although I agree with the competitive nature of Friedman’s points, I

believe Handy’s approach through social ethics are more important.

 Works Cited

The Social Responsibility of Business is to Increase its Profits, by Milton Friedman. N.p., n.d.
Web. 04 July 2017.

Handy, Charles. "What's a Business For?" Harvard Business Review. N.p., 31 July 2014. Web.
04 July 2017.

Moreno, Curt. "3 Excellent Examples of Corporate Social Responsibility." Redshift. Redshift, 03
Mar. 2017. Web. 04 July 2017.