Milton Friedman Goal Case Study Assignment Help
Milton Friedman Goal of the Firm. Does this goal still apply to our understanding of the role of the business firm in
society? Provide examples to support your understanding. Does government or society have a role to play in expanding the Friedman discussion Milton Friedman Goal of the Firm Introduction This Milton Friedman goal case study assignment help paper is prepared to discuss Milton Friedman’s Goal of the Firm. Along with this, the relevancy of this goal in understanding the role of business in society will be also determined and discussed. In this paper, it will also disuses that government or society have any role in expanding Friedman discussion or not.
Milton Friedman Goal of the Firm Milton Friedman was an American Nobel prize winner economist and author who stated about the goal of the firms in his article that is known as “The Social Responsibility of Business is to Increase its Profits”. Under this goal, Milton Friedman stated that the main purpose of a firm is to serve and coordinate the interests of its each stakeholder including shareholders, employees, communities, customers etc. He also argued that the sole purpose of businesses is to maximize shareholder wealth, but at the same time, it is also important for the firms to act within the laws and ethical values (Price, 2007). This goal also explained that a firm should also focus to fulfill all of its social and ethical responsibilities along with profit maximization. Milton Friedman also stated that a firm needs to have any additional justification for existing by maximizing their social values and concerns towards society (Werther & Chandler, 2010). Along with this, this goal also certifies that businesses also take its responsibilities seriously for providing employment, eliminating discrimination as well as avoiding pollution to provide safe and healthy environment to communities (Aras & Crowther, 2010). Overall, Milton Friedman Goal of the firm stated that shareholder profits are important for the firm, but that is not only the responsibility of firm. The businesses also need to conduct their social responsibilities towards local communities (Price, 2007).
Application of Milton Friedman Goal in Current Scenario In current scenario, the goal of Friedman still has greater application or relevancy to understand the role of business firm in society. This goal is based on the social responsibilities of firm to increase its profits as well as protect interests of their each stakeholder that has similarities with corporate social responsibility (CSR) activities (Younkins). A firm has several important roles in society like generate employment, conduct fair employment practices, protect environment, avoid discrimination, and promote social and cultural values etc. that describes as responsibilities for business towards society. The Milton Friedman Goal of the firm can be applicable to recognize role of the business organization in the development and growth of society (Hirschey, 2008). According to Friedman, the sole purpose of a firm is to maximize shareholder wealth or increase their profit within laws and social values that is also relevant in current business scenario. For example, a firm increases selling price of its product or service not only to improve their profit margin, but also contributes to prevent inflation in order to protect consumers. This example shows that how profit maximization and social objective are interrelated with each other as well as influenced by single decision on same time (Makower, 2006). Along with this assignment help, the Milton Friedman Goal of the firm is also relevant to understand the contribution of businesses in economic betterment of people and whole country by evaluating social activities of the firms. For example, if a business firm creates job opportunities and follow fairly treat all people, it will help to improve economic development of local community (Aras & Crowther, 2010).
Role of Government or Society in Expanding Friedman Discussion Yes, government or society can play significant role in expanding Friedman discussion by increasing their focus towards social responsibilities and ethics. For example, if societies give freedom to individuals to use their resources in their own way without any pressure, it can be helpful to expand Friedman’s goal of the firm in business sector. On the other hand, by developing antidiscrimination policy and providing equal employment opportunity, the government can play an important role to expand Friedman discussion (Younkins). According to Friedman, human freedom is necessary to allow a complex society to be organized effectively in which people know about their social responsibilities and ethical activities better than others. The government and society both have a significant role to ensure human freedom by developing economic freedom in terms of freedom of speak, to assemble and to take their decisions on own basis. The Milton Friedman Goal of the firm explained that the firms need to focus on interest of customers, suppliers, employees and communities along with their profit maximizing goal (Boyer, 2001). By developing consumer protection policy, minimum wages policy and social responsibility policy, the government can pressurize each business to follow all social and ethical standards in their activities that will be helpful to expand Friedman’s philosophy. Along with this, government has the power to create pressure on firms for conducting social obligations like obeying the laws, making good contracts, avoid discrimination and hold ordinary moral expectations in order to increase role of business firm in society (Price, 2007).
Conclusion From the above discussion by business assignment help experts, it can be concluded that Milton Friedman Goal of the firm is an effective way to understand both business and social goals and responsibilities.
References Aras, G & Crowther, D. (2010). A Handbook of Corporate Governance and Social Responsibility. USA: Gower Publishing, Ltd. Boyer, P.S. (2001). The Oxford Companion to United States History. London: Oxford University Press. Hirschey, M. (2008). Managerial Economics [With Access Code] (12th edn). USA: Cengage Learning EMEA. Makower, J. (2006). Milton Friedman and the Social Responsibility of Business. Retrieved from http://www.worldchanging.com/archives/005373.html Price, A. (2007). Human Resource Management in a Business Context (3rd edn). USA: Cengage Learning EMEA. Werther, W.B & Chandler, D. (2010). Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2nd ed.). UK: SAGE. Younkins, E.W. (n.d.). Milton Friedman’s Pragmatic and Incremental Libertarianism. Retrieved from http://rebirthofreason.com/Articles/Younkins/Milton_Friedmans_Pragmatic_and_Incremental_Libertarianism.shtml