The Friedman doctrine states that a company's sole responsibility is to maximize profits for its shareholders. It argues that companies have no social responsibility. Milton Friedman was the main proponent of this view. Many companies initially adopted this approach but now also consider corporate social responsibility. Critics argue it neglects a company's responsibilities to society. Alternatively, Carroll's four responsibilities of business identify economic, legal, ethical, and philanthropic responsibilities in order of importance, with economic being the baseline requirement.

1. •F R I E D M A N D O C T R I N E O F S O C I A L
R E S P O N S I B I L I T Y
•A R C H I E C A R R O L L ’ S F O U R
R E S P O N S I B I L I T I E S
Chapter:3
Business Ethics And Social
Responsibility

2. Concept of Friedman Doctrine
The Friedman doctrine is also referred to as
shareholder theory. This doctorine was
developed as a theory of business ethics
by American economist Milton Friedman,
who stated that “An entity’s greatest
responsibility lies in the satisfaction of
the shareholders.” According to this
theory, business have no responsibility to
society. Instead their most important
commitment is to their shareholders.

3. Influence of Friedman Doctrine
 The Friedman doctrine is the first answer to questions such as
“What are companies for?” Every business believes that the goal of
a company is to maximize shareholder value.
 Several companies have adopted the shareholder theory since its
inception(starting point of an institution or activity).
 Most business currently strive to maximize shareholder value,
rather than focusing on corporate social responsibility (CSR).
 Companies that follow the Friedman doctrine aim to increase
profits because this is what matters most to shareholders.

4. Criticism of the Friedman Doctrine
 Critics sees the doctrine as imperfect on multiple
levels, including legally, morally, economically,
socially and financially.
 The doctrine gives importance to the shareholders
and neglects society. The goodwill that creates in the
community contributes to its success, every company
has a social responsibility as well.
 Although this doctrine does not focus on social
progress, business can be used as a tool for social
change and progress, and they should consider social
factors when making business decisions.

5. Carroll’s Four Responsibilities of
Business
According to Carroll, economic responsibilities are most vital
for a business. Next comes legal and ethical responsibilities.
Philanthropic responsibilities are considered to be the least
important.

6. 1. Economic Responsibility
 All economic systems of the world recognize the
vital importance to the societies of businesses
making profits. While thinking about its’ economic
responsibilities, businesses employ many business
concepts that are directed towards financial
effectiveness – attention to revenues, cost-
effectiveness, investments, marketing, strategies,
operations, and a host of professional concepts
focused on augmenting the long-term financial
success of the organization. Therefore, the economic
responsibility is a baseline requirement that must be
met in a competitive business world.

7. 2. Legal responsibility
Businesses are expected and required to comply with these
laws and regulations as a condition of operating. While
meeting these legal responsibilities, important
expectations of business include their
 Performing in a manner consistent with expectations of
government and law
 Complying with various federal, state, and local
regulations
 Conducting themselves as law-abiding corporate citizens
 Fulfilling all their legal obligations to societal
stakeholders
 Providing goods and services that at least meet minimal
legal requirements

8. 3. Ethical Responsibility
 Ethical responsibilities embrace those activities,
standards, policies, and practices that are expected
or prohibited by society even though they are not
codified into law. The goal of these expectations is
that businesses will be responsible for and
responsive to the full range of norms, standards,
values, principles, and expectations that reflect and
honor what consumers, employees, owners and the
community regard as consistent with respect to the
protection of stakeholders’ moral rights.

9. 4. Philanthropic responsibility
 Corporate philanthropy includes all forms of
business giving. Philanthropy or business giving may
not be a responsibility in a literal sense, but it is
normally expected by businesses today and is a part
of the everyday expectations of the public They are
guided by business’s desire to participate in social
activities that are not mandated, not required by law,
and not generally expected of business in an ethical
sense. Having said that, some businesses do give
partially out of an ethical motivation.

10. Thank you have a amazing day