Milton Friedman - Corporate Social Responsibility (CSR)

I am disagree with the work of Milton Friedman (1970) disparaging Corporate Social Responsibility (CSR) which saying that "Businessmen are unwitting puppets of intellectual forces that have been undermining the basis of a free society". It is understood that profit margin or revenue is always the main concern in a company strategy planning. However, I firmly believe that an effective CSR policy, coupled with efficient marketing and business strategy could help a business grow to larger profits whilst also benefitting society at large.

CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. In other words, CSR stress on the balance in development in economics, environment and social sectors on a firm will make profit in their business management.

Businessmen who contribute in CSR should not called as unwitting puppets. Businessmen themselves have their own objective to do CSR, they contribute willingly to CSR. CSR is a significant concept that needs to pay much attention when doing business planning, which is also a part of their company vision and mission statement.

For example, in 2006, Hewlett-Packard had launched a campaign, named "HP's technology in teaching", where selected schools and universities received the free HP's products in their teaching. Besides the offering of free products, personal development and guidance towards the technology had also been launched so that the selected education institution can enjoys the greatest value of HP products. (Hewlett-Packard, 2007)

For another example, a nutritious chocolate beverage - Milo, had a huge contribute in the youth of today and tomorrow's sporting needs by Nestle company. Milo contribute sporting resources to schools whose sporting equipment and facilities are in dire need of refurbishment in Malaysia. Besides, Milo also keeping their faith in sports and for making a significant contribution towards Singapore's youth sports development since 1950s. More than 1 million cups of MILO are given free to Singaporeans annually through various sports and community events. (SSC, 2010)

From the first example above, HP had became the solely brand name in the eyes of students among the education institution, hence HP can gain the loyalty from the students. Now, HP brand is ranking number one in the world for computers. Same as the Milo example, the Milo beverage become the significant nutrition drink for everyone in the country. Milo maintained its strong market share and the ubiquitous beverage remains a perennial favourite amongst Malaysian and Singaporean consumers.

A business with involving in CSR is not only contribute to the society but also to maximising the shareholders profits because at the end of the day, the reputation and loyalty of that company had been appreciate. Consumers will give the brand name on priority first when making choice among other brands. The win-win situation has been achieved, therefore these businesses are do willingly, in fact they are not puppets, they believe in CSR.

Friedman said that it is undemocratic for corporation to use shareholder s' funds to support charities. This statement is not proper because this may mean that the shareholder would lead the business to engage in activities that are unethical as well as illegal. Is it any better or higher democratic if someone allow this businessmen to pollute the natural environment. Polluting the natural resources which belong to society is not democratic at all, this will destroy the environment.

Company will lose reputation and their revenue will be affected if they engage in unethical activities. For example, in 1990s, Nike was involving underpaid workers in Indonesia, child labour in Cambodia and Pakistan, and poor working conditions in China and Vietnam, these situation had tarnish Nike's image by synonymous with slave wages, forced overtime, and arbitrary abuse. (Locke, 2002)

Mitsubishi Motors Corporation (MMC) believes that it has the responsibility to reduce the impact of automobiles in the Earth's environment. Therefore, the zero-emissions i MiEV electric vehicles which do not use fossil fuels was developed. i MiEV is powered by high-performance lithium-ion batteries, allowing it to run clean without releasing any CO2 emissions. (Mitsubishi Motors, 2009)

No doubt MMC was using the shareholders' money to research and develop the electric vehicle, it is consider contribute for their CSR program, by doing so MMC can maximising the shareholders' wealth as well.

As the conclusion, fulfilling the CSR by a company can always helps to evaluate an ethically healthy image of the company. Ultimately, consumers' confidence level towards the company can be generally increased and performance if the company will be boosted up simultaneously. Therefore, the statement of Friedman was obsolescence to use current era which everyone is concerning the earth issue now, CSR become a competitive advantage to company.

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