Corporate Social Responsibility is about capacity building for sustainable livelihoods (Baker, 2015). Friedman considers tax proceeds are the responsible for government to do CSR. Does Friedman’s argument always hold?
According Godelnik (2013), Friedman has fiduciary duty in order to maximize profits. He debates that social responsibility of business is the only one to use its resources and capture in activities to increase its profits, engages in open and free competition, without deception or fraud. Corporate executive has responsibility towards the employers. This responsibility is due to different level of desires in accordance to business. Friedman, argues CSR is not socially desirable. Social matters should be resolved by unfettered workings
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Therefore, he disagrees with Friedman’s view. The purpose of an investor is to maximize profits. This is not the main point for other stakeholders such as customers, suppliers, and the community. These stakeholders have their own needs and desires which are valid and legitimate (Mackey, 2005). Well, most of the successful business put customers ahead of investors. Regarding to Nam (2012, p.3), “The shareholder approach” focuses on responsibility over profitability. The satisfaction among stakeholders, not only shareholders, will determine the success of company. Service industry such as Enterprise Rent-a-Car, Whole Foods, and Trader Joe's prove this approach in order to maintain a sustainable competitive advantage and get better return in a long run version. For the Whole Food Company (WFC), “fresh product” is the product categories that is most challenging to manage due to the limited product shelf life and high cost of spoilage (Nam, 2012, p.84). Whole Foods tries to solve this problem by get the supply for the fresh product which is sourcing locally and focus on short and flexible supply chains. As a result, customers are willing to pay a premium due to the quality of their products. Whole Foods has now becoming a strong differentiator from other large grocery chains because of value added on customers. According to Kowitt (2010), one of the hottest retailers in U.S is Trader Joe’s. It owns 344 stores in 25 states and Washington, D.C, and strip-mall operators. The sales of the company are approximately $8 billion, same size as Whole Food’s. Its stores sell at double price of Whole Foods which around $1,750 in merchandise per square foot. The unique approach is they offers value and provides quality service to customers. Moreover, they provide the service which includes personal