4.1 Corporate Social Responsability

Quoted from Stoner, in 1899, Andrew Carnegie, founder of the U.S. Steel, published the book called "The gospel of wealth", which exposed the classic definition of corporate social responsibility. Carnegie's position was based on two principles: the principle of charity and the principle of custody.

The principle of charity meant that the more fortunate members of society should help the less fortunate, including the unemployed, the handicapped, the sick, and the old.

The principle of custody meant that corporations and the wealthy were considered custodians, or caretakers, of their assets. Carnegie's concept was that the wealthy held the money of the rest of society "in custody" and could use it for whatever purpose society considered legitimate. However, it also assumed that companies had the task of multiplying the wealth of society, increasing their own through prudent investments of the resources that had been entrusted to them.

Some critics say that the concept of corporate responsibility was a smoke screen that hid the personal values ​​of a few very powerful individuals.

On the other hand, according to the economist Milton Friedman, “The company has only one social responsibility: to use its energy and resources for activities that increase its profits, as long as it respects the rules of the game and engages in open and free competition, without tricks or frauds." He says that companies should dedicate themselves to producing goods and services efficiently and leave the solution of social problems in the hands of government agencies and competent people.

Friedman's position represents one end of a continuous that recognizes some division of social responsibility among various segments of society, including government and private enterprise. Most managers and others are of the opinion that both the government and the private sector have a responsibility to act, to some extent, in the interest of society.

What do you think? Carnegie, Friedman or a combination of both approaches.

2022, March