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Milton Friedman Goal of the Firm

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Prepare a paper using APA format discussing the Milton Friedman Goal of the Firm. Does this goal still apply to our understanding of the role of the business firm in society? Provide examples to support your understanding. Does government or society have a role to play in expanding the Friedman discussion?

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Solution Summary

This posting gives you a step-by-step explanation of how goals of a firm are set. The response also contains the sources used.

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Step 1
The goal of business according to Milton Friedman was to generate profit for shareholders. According to Milton Freidman is a firm adopted responsible attitudes it would be rendered less competitive. He asserted that by acting in a socially responsible manner, the managers of business would have take actions which were not in the interest of their employers. He gave examples such as keeping prices low, reducing pollution beyond what was legally required, and reducing poverty would all mean the corporate executive would be spending someone else's money for general social interest. Milton Freidman argued that money spend by companies would come either from the customers by way of higher prices, employees by way of lower salaries, or from shareholders by way of lower profits.

Step 2
The goal of generating profits for the shareholders still holds even now. However, this goal is substantially tempered with social responsibility. Milton Freidman mentions other stakeholders apart from shareholders. ...

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