Business Social Responsibility

I enjoyed the readings for this week (mostly - Marx was a bit abstruse), but took particular interest in the section on social responsibility. The article by Milton Friedman was particularly meaningful for me. He says in summary that, "there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game...without deception or fraud." I think the key with Friedman's thoughts are the part about staying within the rules and without fraud or deception. He further elaborates on this by saying, "...make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom." To do anything otherwise, would be to ignore your responsibility to the owners of the business whom employ you.

Freeman's essay gives further elaboration on this thought by expounding on those "basic rules and customs". He frames it as creating value for as many stakeholders as possible. Stakeholders include financiers (owners), customers, employees, communities, and suppliers.

Are Friedman and Freeman in conflict? Perhaps somewhat, but I don't think they are diametrically opposed. Friedman's premise is certainly more basic and simple while Freeman's framework is much more elaborate. That said, Friedman recognizes the responsibility to comply with laws and customs. Freeman gives us tools to do this. I do tend to agree with Friedman, though, that its not the responsibility of business to get deeply embedded in systematic social evils. That is better left to the political establishment.

How do I interpret these positions on the case of Resistol products in Honduras? I think Fuller definitely had a responsibility to address the abuse of its product by the children. As I sit here at my desk I see that the dust remover I use (in the form of a compressed can of gas) has a product called Bittergent added to it to deter huffing abuse (makes the substance horribly bitter). This responsibility is clearly a custom, if not a law, in the US. I think it was wrong for Fuller to get themselves bogged down in the social and political debate surrounding the best way to control this substance abuse. Oil of mustard was not perfect, but it was the law, and it was used elsewhere. The proposed alternative, education, seemed unrealistic in a country with such limited resources. Fuller's should have followed the law and used the Oil of Mustard. If in the future a better deterrent was available, it would be Fuller's responsibility to investigate it and make a recommendation to the appropriate authorities.