What responsibility does business have to society?
Nobel prize recipient Milton Friedman and others have argued that a corporation’s purpose is to maximize returns to its shareholders, and that since only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. Others have gone so far as to say that the role of business is to abolish poverty.
These ideas are colliding as we witness and debate the role of government in solving economic conditions and the role of business in influencing government policy. It seems that, if nothing else, both big business and government are losing the trust of the people as the roles of business and government are considered.
Many businesses embrace the idea of social responsibility and even have formalized corporate social responsibility statements.
State Farm Insurance, for example, states on the “Corporate Responsibility” section of its website that its mission is “… to help people manage the risks of everyday life, recover from the unexpected and realize their dreams. We achieve our mission through the products and services we offer, as well as through our involvement in and commitment to the community. We make it our business to be like a good neighbor, helping to improve the quality of life in the communities where our associates live and work.”