Milton Friedman and Christopher Stone have very disparate views on the role and function of business. Milton Friedman states that the main objective of business (if not all of it) should be based on getting profit while Stone argues that profit should not be the only or even the major concern of a business. The proper perspective is, of course, in the middle but closer to Friedman than Stone.
Stakeholders
The topic at hand is whether businesses can rely on the premise that profit alone is the end-all be-all of what drives a business and what its endgame should be or whether it should focus at least somewhat on social and corporate responsibility even if it's at the expense of some or many dollars of profit. The author will compare these two disparate viewpoints and offer an overall viewpoint that actually blends the two.
Compare and Contrast
Friedman offers the point that businesses must have a profit to even survive and exist. As such, this drives what the business does, why it does it and how it should do it. The Stone treatise is a counterpoint and it argues that businesses have an obligation and a moral imperative to be stewards of the public good even at the expense of profit. Stone presupposes that firms are mandated and urged to be directed solely by profit and shoots down the presumptions that lead to this while Friedman makes the point that profit should indeed be the main goal.
Taking A Stand
The author of this report would state that, as with most things, the proper place to stand on this spectrum is somewhere in the middle. In this case, that "somewhere" is much closer to Friedman's viewpoint than it is to Stone's. However, Stone is correct in saying that profit should not be the only motive but he is perhaps a bit cynical to insist that it is indeed the "only" motive to some or many firms because that it is simply not the case. Even if it's just a hedge related to public relations and other legal issues, any firm that has its mental faculties in order at least consider the social responsibility/PR implications when considering one choice over another. Sometimes this consideration occurs after the fact when it should have been before the fact (or at least deeper into the minutia before the fact) but all firms with any sense do this as a matter default.
Stone's promissory argument makes reference to the fact that shares of a corporation only end up in a given person's hands after a "circuitous" path but Stone's argument itself is circuitous and nonsensical. Any normal investor that invests in a corporation in any way, shape or form at least expects their money to remain flat. Even if the shares do not go up, they might be getting a match of some sort or they may rely on dividends. However, if a stock is about to nosedive, no sane person would hold onto it. Conjoined with that overall goal is the idea that a shareholder expects the firm to do what it takes to glean a profit. That all being said, many investors do take social responsibility and corporate actions that lead to the profit but may hurt or take advantage of others into account. However, others still just want profit which may explain why no other than Michael Moore used to be invested in Halliburton stock…which is quite asinine if one thinks about it (WND, 2005).
Similarly, Stone shoots down Friedman by arguing that corporations and their executives should not just consider stockholders as stakeholders but also creditors, the state, their neighbors and so forth stakeholders as well. That argument is also silly because it is more than a slippery slope. Corporations have two major concerns and that is complying with the law and making a profit. Anything beyond that is proverbial gravy and is basically in the discretion of the firm itself even if some groups or people do not like it.
The last sentence of the prior paragraph segues nicely into another point and that it is impossible to satisfy everyone that has an axe to grind as it relates to corporate and social responsibility. On top of that, the viewpoints and demands of some groups including union activists, environmental groups and so forth are quite ridiculous and extremely anti-capitalist/anti-business in nature and corporations would be extremely obtuse to take such opinions and advice into any serious consideration. For example, anyone who things that Apple iPod's and iPhone's cost much more than half to make than the retail cost that is rendered is fooling themselves but Apple is NOT foolish for charging what they can get. Obviously, their high price points make the devices out of reach for some people but that is a decision Apple is made…for better or worse…and they are doing quite well despite this being the case (HuffPoTech, 2013).
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