Milton Friedman Goal

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Abstract This paper is discusses the Milton Friedman Theory and how it applies corporations and the government. It will also discuss the responsibilities of firms and the government and whether or not they play a role in the expansion the Friedman Discussion. Milton Friedman Goal of the Firm Milton Friedman is a noble prize winning economist whose philosophy on corporate social responsibility (CSR) has shaped the business world today. Friedman believed that businesses only social responsibility is to utilize resources and engage in activities that would maximize profits without the use of deception or fraud while conforming to the basic rules of society (Friedman, 1970) . Executives are hired to act as fiduciary agents of their stockholders for the purpose of increasing wealth (Smith, 2003). He argued that CSR amounted to spending the stakeholder’s money that clouded decision making by reducing the firm’s focus on maximizing profits, thereby placing the firm at a competitive disadvantage (Smith, 2003). Friedman’s approach is practical and takes into account the interests of both firms and society. However, it is not realistic to think that a firm can separate business and social responsibilities. According to Mintzberg "the strategic decisions of large organizations inevitably involve social as well as economic consequences, inextricably intertwined...there is no such thing as a purely economic strategic decision." Corporate competitiveness, corporate governance, and corporate citizenship are the three key pressures that shape the agenda of business leaders today along with the growing pressure on their companies to deliver broader societal value (Smith, 2003). This pressure has been brought on by public reaction to globalization, and distrust of big businesses. In today’s social and political climate by consumers

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