Outline

The following items are covered in the paper;

Topic: Explain Milton Friedman’s arguments supporting that a company’s only obligation

is to make money

Introduction

 Many people believe that companies have social responsibilities.

 Friedman, a Nobel Prize-winning economist, argued against this, citing that
businesses main focus is maximizing returns to the shareholders with no
emphasis on social responsibility.
 The weakness in his idea is that he does not consider the factors that contribute
to the business’ profits.

Summary of Friedman’s Position

 Friedman’s idea that led to nearly universal acceptance is that the highest
responsibility of a company is maximizing profits and shareholder value.
 His theory suggests that employees are the executives of a corporation while the
shareholders are the boss.
 He argued that in the world of business, a company should, by all means, make
as much money as possible and conform to the basic societal rules
 According to the economist, employees must always work according to the
desires of their superiors.
 Friedman analyzes the highest good as returning as much money as possible to
the shareholders.

Summary of Contrary Positions

 Friedman’s position has raised controversies from the business roundtable.

 Marianne Bertrand noted that what is good for shareholders is good for society.
 She argues that Friedman’s idea only works when a business is working
perfectly.
 Other members commented that businesses have implicitly ignored social
problems

Demonstrate How Each Position Would Affect the Outcome of an Ethical Dilemma

 One ethical dilemma is taking credit for others’ work.

 Many organizations overwork their employees with low wages while the company
makes huge profits from them.
  Regarding Friedman’s idea, the company is obligated to maximize profits
regardless of social ethics

Most Compelling Position

 Friedman’ position is more compelling than the roundtable members’ discussion.

 A business’ main aim is to achieve returns.
 He does not consider these factors while tabling his idea.
 I would advise the manager to apply the roundtable statement to ensure that the
factors contributing to maximum returns are considered.

Conclusion

 Friedman’s and the roundtable statement of purpose have interests in

businesses underpinnings.
 Business roundtable statement of purpose considers employees, stakeholders,
suppliers, and its customers as the main focus in addition to making profits.
 References

Business Roundtable. (2021). Statement on the Purpose of a Corporation. Retrieved from

https://system.businessroundtable.org/app/uploads/sites/5/2021/02/BRT-Statement-on-

the-Purpose-of-a-Corporation-Feburary-2021-compressed.pdf

Schechter, A. (2017). It’s time to rethink Milton Friedman’s ‘shareholder value’ argument.

Retrieved from https://review.chicagobooth.edu/economics/2017/article/it-s-time-

rethink-milton-friedman-s-shareholder-value-argument

Tepper, T. (2021, June 22). Milton Friedman on the social responsibility of business, 50 years

later. Retrieved from https://www.forbes.com/advisor/investing/milton-friedman-social-

responsibility-of-business/