Question: Milton Friedman argued that the primary responsibility of a profit-making organisation is to make a profit. Critically analyse this statement.

Expert answer

Milton Friedman's statement is a bit of an oversimplification. A company has a responsibility to its shareholders to make a profit, but it also has a responsibility to its employees, its customers, and the community at large to act in a responsible and ethical manner. A company that focuses exclusively on making a profit without regard to the other stakeholders is likely to run into trouble in the long run.

Friedman's statement also neglects to mention the role of government in regulating business. A company that fails to comply with regulations or that engages in illegal activities is unlikely to be profitable for very long. In other words, a company has a responsibility to obey the law and to act in a socially responsible manner.

It is important to remember that a company is not an isolated entity; it exists within a larger social context. A company that disregards the needs of its employees, customers, and the community in which it operates is likely to find itself at odds with society as a whole. In the end, a company that focuses solely on making a profit is likely to be less successful than one that takes all stakeholders into account.