2006
DOI: 10.1111/j.1467-6486.2006.00583.x
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Taking Friedman Seriously: Maximizing Profits and Social Performance*

Abstract:  This paper examines the situation of firms that have two objectives: profit maximization and social performance. By looking comparatively at the cases of altruism, coerced egoism, and strategy, this paper uses the tools of microeconomics to define the optimal level of social output that should be produced in each case. We show that it is wiser for the firm to act strategically than to be coerced into making investments in corporate social responsibility. In addition, we argue that greater overall soci… Show more

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Cited by 516 publications
(397 citation statements)
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References 55 publications
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“…One long running debate in CSR literature focuses on questions which ask whether companies should adopt discretionary CSR (Carroll, 1979;Wartick and Mahon, 1994) or strategic CSR (Husted, 2001;Husted and Allen, 2007;Husted and Salazar, 2006) or whether they should be compelled or regulated to do so (Fairbrass 2011;Fairbrass and Zueva-Owens, 2012). The roots of this debate can be traced back to an early definition of CSR (Carroll 1979: p 500) where the phenomenon is deemed to comprise 'economic, legal, ethical and discretionary' responsibilities.…”
Section: Corporate Social Responsibility: Discretionary Strategic Ormentioning
confidence: 99%
“…One long running debate in CSR literature focuses on questions which ask whether companies should adopt discretionary CSR (Carroll, 1979;Wartick and Mahon, 1994) or strategic CSR (Husted, 2001;Husted and Allen, 2007;Husted and Salazar, 2006) or whether they should be compelled or regulated to do so (Fairbrass 2011;Fairbrass and Zueva-Owens, 2012). The roots of this debate can be traced back to an early definition of CSR (Carroll 1979: p 500) where the phenomenon is deemed to comprise 'economic, legal, ethical and discretionary' responsibilities.…”
Section: Corporate Social Responsibility: Discretionary Strategic Ormentioning
confidence: 99%
“…For example, the growing pressure from civil society actors, such as international organizations, NGOs, or civil society groups, that has pressed companies to make them more socially and environmentally responsible (Scherer and Palazzo, 2011;Zhang et al, 2012). But also the firm's profit strategy has pushed it to be socially responsible because of an anticipated benefit (e.g., reputation enhancement, recruitment of high-quality workers, differentiated products that extract a premium) from these actions (Husted and Salazar, 2006;McWilliams and Siegel, 2000;Waddock and Graves, 1997). Accordingly, this topic has received considerable attention in the marketing and management literature.…”
Section: Introductionmentioning
confidence: 99%
“…Corporate social responsibility (CSR) research increasingly focuses on the link between CSR-related business practices and corporate reputation (e.g., Husted and De Jesus Salazar 2006;Janney and Gove 2011;McWilliams, Siegel, and Wright 2006). In this context, scholars argued that social or environmental misconduct is not necessarily detrimental to an organization, as long as the firm does not purposely cause misconduct and promptly rectifies the wrongdoing (Campbell 2007 and Hoyt 2008;Tang 2008).…”
Section: Introductionmentioning
confidence: 99%