Question

6) What do you make of Friedman’s views on the use of funds allocated for the...

6) What do you make of Friedman’s views on the use of funds allocated for the maximization of profits for socially responsible activities

Homework Answers

Answer #1

Friedman believes in the pure capitalism and does not support any restrictions or restraints on economic freedom. Further, he contends that there should not be any restrictions on use of profits of corporations. Directors of firms must contribute towards increasing wealth of shareholders.

Hence, firms should not be compelled to the make expenditure on social causes.

But current scholars believe that theory of corporate social responsibilities by Friedman is not complete. Expenditure on corporate social responsibilities is important aspect of marketing strategy. it enhances reputation of firms and win customer loyalty. It increases profits in long run.

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