In this link you will read the debate between Whole Foods CEO Mackey, the founder and CEO of Cypress Semiconductor T.J. Rodgers, and economist Milton Friedman about the social responsibility of business. You can appraise their arguments and judge who is right (and why!!!).
I just want to make a very basic comment on what I feel about this argument.
ReplyDeleteFirstly, I am a Finance major. I have built financial models and have seen the the costs of Good Will DIRECTLY increase Net Income and Revenues in projected statements. Thus, I do believe that CSR does increase profits.
Friedman is so narrow-minded with his ideas on how to make profits.
Mackey has cared about his stakeholders and charity, etc. Whole Foods gives out over-priced foods and for some reason people keep going and in fact go out of their way to go! Why? Because they believe when they purchase over-priced goods at Whole Foods that extra money goes to charity or a company that has strong CSR. And they are absolutely right in doing so.
I don't understand why Friedman, such a smart and well-known economist, cannot understand the basics of GOOD REPUTATION= PROFIT.