Strategic Alliances

Question: Strategic Alliances are a better way of accessing and strategically developing knowledge, when compared to other forms of external and internal development.Critically evaluate this statement, using academic literature and current business examples.OR:The only social responsibility of business is to make profit. Friedman (1962)Using academic literature and current business examples, critically evaluate this statement, including critique of the business case for CSR. Answer: The question that arises is that how ethics and mortality could be implemented to the experience of human beings. Though it is noted that philosophers had applied their brains for abstracting the ethical dilemmas in the history, there still appears to be no universal answer for the purpose of solving the ethical issues (Friedman 1970). The various philosophers works had tried to lead towards the moral framework development, which could be applied in different situations. The issue is that the ethical question answer might get varied according to the applied ethical framework (Friedman 1970). In context to this, by adapting the complex as well as the abstract ethical framework and the same is true to the process of decision making of directors might result into the unsolvable arguments in the restaurants, boardrooms, scholarly journals, meetings of shareholders, and in front of media (Friedman 1970). Milton Friedman had previously proposed the business ethics principles in the article of New York Times, which mention that the the social responsibility of business is to increase its profits (Friedman 1970). ..there is only one business social responsibility, and thats to make use of resources and try to get involved with activities that are designed for enhancing the profits so long that the company stays in the game rules, which mentions that firm should get engaged in free competition without any fraud and deception (Hammond 2003). This statement had just raised the question on directors that whether they should act towards enhancing the profits (Waldman and Siegel 2008). Although Friedman had explicitly mentioned that directors are the business agent, and they are responsible for playing within the game rules, still they leave room for conducting unethical behavior (Waldman and Siegel 2008). Therefore, the question arise that, does it mean that directors can act in such a manner that it could increase the business profits? Another issue that arises is that whether the firm should get involved in all the socially responsible activities (Waldman and Siegel 2008). In the Friedman perception about the social economic view of corporate social responsibility, it can be clearly argued that the directors are responsible for acting in the manner that could enhance the profits and business should engage in corporate social responsibility activities that could leave an indirect positive impact on the performance of the company (Waldman and Siegel 2008). Friedman had argued that the capitalism in its direct form can distort economic freedom. Activities that are socially responsible undertaken by the single company can change the economic freedom as per Friedman as shareholders are not able to decide on whom they will spend their money (Friedman 1978). Therefore, Friedman argues that company should stress over the activities that are linked with the profit of the company, excluding the activities of charity and are can directly generate the revenue (Friedman 1978). ..There is a claim that businesses should try to contribute towards supporting all the charitable form of activities and mainly the universities. This type of offering by the companies is considered as an inappropriate way of suing the corporate funds for the society (Davis 1960). Other principles that are expressed by the Friedman are the requirement to stay within game rules, mainly by avoiding the fraud and deception. This can be explained: A corporate executive holds direct social responsibility towards undertaking the business as per the desires of shareholders for making the money while conforming to the society rules, both that are included in laws and ethical custom (Frederick 1960). It applied with the Friedman, which fails to proclaim that the directors can easily act in the manner for increasing the profits because they are abiding by the laws and even follow the customs of ethics (Jeanette and Aubrey 1998). They exclusively specify the charitable activities, as they dont contribute in the profit scenario. According to Friedman, the better company is not the one that takes events due to its ethical ideal, but it should be equally socially sound (Jeanette and Aubrey 1998). One of the key arguments of Friedman for excluding corporate social responsibility from the business on ethical basis: Spending money on oneself wisely Spending money on others but challenging Spending money on oneself, but provide less incentive to the economy Spending money on others, by including government role and programs of corporate social responsibility (Jeanette and Aubrey 1998) It is argued by Friedman that its irrelevant for the directors to embark towards programs of corporate social responsibility, as there is less incentive for the expenditure, mainly when one spends money that is owned towards shareholders by dividends (Jeanette and Aubrey 1998). Friedman had also claimed that the legal construct with increasing the shareholders return as the single primary (Jeanette and Aubrey 1998). Executives are also employed for attaining the only aim. The sole moral responsibility of the managers is mainly to meet the expectations of shareholders that could increase their investment returns (Jeanette and Aubrey 1998). The perception of Friedman is mostly akin towards Darwinism, which applies the survival of market principles for ensuring the expected results (Hiscox and Smyth 2006). Friedman being the best in corporations holds high shareholder return. When the problems of the electric company, which tries to cut the supply to all customers for not paying, on which customers die is presented to Friedman (Hiscox and Smyth 2006). In this case, he argued that the utility company, which fails in cutting the electricity for not paying to customers, will fail to survive, as there is no reason for the customers actually to pay their bills. In the view of Friedman, disconnecting the clients who are not paying the bill will be regarded as the universal maxim, regardless of any particular result (Hiscox and Smyth 2006). Friedman also considers it as ethical due to the directors as they hold the moral duty of ensuring the corporation survival (Hiscox and Smyth 2006). The key reasons related to the Friedman are not satisfied. He had failed in proving that excising the moral, social responsibility in the business is through nature as it's unfair as well as socially practice (Meijer and Schuyt 2005). Most of the cases of Friedman rely on the questionable paradigm, in which the main premise is wrong and misses in logical cogency. Various standards are proposed in the context of socially responsible action in the business and it is argued that the social responsibility commitment could be considered as essential components in both the operational and strategic management of business without even producing the objectionable outcomes that are claimed by Friedman (Meijer and Schuyt 2005). Milton Friedman had also argued that the people who are responsible for taking decisions and initiate the actions of the business should not try to exercise the social responsibility in their capacity as being the executive of the company (Meijer and Schuyt 2005). Instead of that, they should try to concentrate on the growing companys profit. He had also argued that the social responsibility doctrine is considered as the socialist doctrine (Meijer and Schuyt 2005). Friedman arguments: executives need to exercise moral and social responsibilities Friedman argues that the social responsibility using through corporate is important as: It will be unfair as it constitutes the taxation without presenting it. Its undemocratic, as it tries to invest in the governmental power of the person who holds essential mandate towards governance (Meijer and Schuyt 2005) It will be unwise as there contain no checks as well as it balances in the enormous range of government powers by turning towards discretion (Sharp 2003) It also violates the trust, as the owners employ executives and they act as the agent in serving the principal interest (Meijer and Schuyt 2005). It is also futile, as executives will be able to anticipate the social results of the action, and they will also impose the cost of the stockholders, employees, and customers because they are most likely to lose the support and even power (Meijer and Schuyt 2005). Other arguments for the corporate social responsibility of the society and firm, for instance, Emigrant Savings Bank place around $1000 in the customers account, which is the toughest thing hit through the hurricane (Guay, Doh and Sinclair 2004). The bank tries to make the money to the customers, if they failed to do the same from customers, then the bank wouldnt have the money to provide to the customers through the services of unusual banking and specific cases such as issues of Hurricane Katrina (Guay, Doh and Sinclair 2004).Corporate social responsibility enhances the corporate image as well as companies goodwill, because of the companies such as Georgia Pacific, Amgen, Wal-Mart and the one who had donated to the Hurricane Katrina victims, and they are identified and wrote articles that promote these firms as being the caring organization of humanitarian and they even try to encourage the customers to initiate the business through the generous corporations (Guay, Doh and Sinclair 2004).Friedman also argues that the only social responsibility of the firm is to seek to make profits as per the law (Carson 2003). Milton Friedman also claims that the free markets, instead of companies need to decide what is good for the whole world. He even believes that the invisible hands of Adman Smith can even make things better (Carson 2003). It is highly argued that the business is business that implies that the firms in the industry are making profits, and thats the reason they are giving money to charity like Hurricane Katrina, in whom Wal-Mart had dominated around $17 million, and the same was not the objective of the company, rather, in fact, it moves against the principal purpose of the corporation is profit maximization (Carson 2003).It is referred as the voice of the laisser-faire in the year 1980, and still it gives the powerful voice through the support of advocates like Elaine Sternberg. It is argued by Sternberg that there is a case of human rights that goes aga inst the corporate social responsibility, that implies that the approach of stakeholders towards management deprive the shareholders of the property rights (Griffin and Mahon 1997). It mentions that the objectives that were sought through the social responsibility conventional views are absurd. Not every corporate social responsibility aspect is meant guilty (Griffin and Mahon 1997). It is said by Sternberg that the decency, fairness, as well as honesty, need to be expected through the corporations (Tencati and Zsolnai 2008). Other arguments that move against the corporate social responsibility are due to lack of regulations. In this case, companies provide the items they might select what they are in business and trying to produce, for instance, pizza ordered from Papa John provides the medical supplies of around $2.5 million as it incurs different price to the company (Griffin and Mahon 1997).When the surveys are undertaken by the respected business leaders then, in that case, who will find the names, like Jack Welch of General Electric, Bill Gates of Microsoft, who had tried to attain the status of world class? Welch is mainly remembered for the brutal downsizing, in which the manner he lead his business, and he was also popular for its prosecutions and pollution incidents (Griffin and Mahon 1997). Microsoft holds the top profile in case of bullying the dominance of the market in present years, and Gate is considered as achievable of financial status, in which he selected a lot of money getting ruthless in the business (Griffin and Mahon 1997).The Friedman view counterpoints are developed in the school of socio-economy of corporate social responsibility (Zadek 2004). One of the leading proponents of this perception is mainly proposed by the Iron Law of responsibility that tried to attain the business person social responsibility, which requires commensuration the political powers (Pava and Krausz 1996). Friedman mentions that,..Businessman should try to ove rview the economic system operations, which could fulfill the public expectations. And this implies in return that the means of production in the economy should be hired in such a manner that distribution and production should improve the welfare of socio-economic. The view of socio-economic is mainly in the utilitarian argument as Friedman tries to stress over the complete well-being of socio-economic in the society and the same needs to be improved, rather than stressing over the shareholders welfare, as per the proclaim of Friedman (Pava and Krausz 1996). Firms that try to operate exclusively for the sake of increasing the return to shareholders dont get engage in the activities of social responsibility and consider it as unethical in the point of view of utilitarian (Steare 2012). Through adopting the utilitarian adage of offering the highest number of people, firms are mostly ethically obliged towards participating in the activities of social responsibility, which could increas e the stakeholders total welfare (Pava and Krausz 1996). However, the issue related to applying the consequentialist theories standard, where one needs to increase the value of agent-neutral. Utilitarian doesnt differentiate among the people, whose utility need to be increase and therefore, it requires the deontic constraints for ensuring that welfare maximization of every stakeholder should not jeopardize with the high business prospects (Pava and Krausz 1996). A deontic constraint is considered as the principle, which tries to assign the value for the specific agent as compared to others and in the case of corporate social responsibility, it argues that the shareholders rights should be saved over the whole society rights (Pava and Krausz 1996). If the corporate social responsibility is considered as detrimental to the business as Friedman recommended it, then in that case shareholders will try to tend towards avoiding the investment within the firms that act as more socially responsible. There is, however, many empirical facts that its not considered as the case (Joyner and Payne 2002). Firstly, it is noticed that Friedman often fails in trying to acknowledge acting in an ethical way that could be seen as a valuable marketing proposition. Through analyzing the consumers desires, a corporation could provide the products as well as services that could match with the thresholds of ethics, thereby it adds to the value of consumers and shareholders; therefore, it avoids the myopia of marketing as it is mentioned by Theodore Levitt (Joyner and Payne 2002).