A company believes that its only social responsibility is to increase profits, so long as it stays within the rules of law. What approach to ethics does this company use

Question

Tomas Bass

Business

5 January, 02:34

A company believes that its only social responsibility is to increase profits, so long as it stays within the rules of law. What approach to ethics does this company use

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Ray Tyler · Answer 1

The Friedman doctrine

Explanation:

As per Milton Friedman, a company should focus upon increasing it's profits and adhering to the rules, regulations and the law.

As per Friedman, when a company maximizes it's profits while ensuring abidance by the law, it in a way serves the society.

The approach recognizes that a firm only owes it's social responsibility to it's shareholders and via earning profits, it increases the wealth of it's shareholders.

As per the approach, if an executive discharges his social responsibility, it would constitute somebody spending someone else's (shareholders) money for it's own purpose.