Developing a culture of responsible business is not easy. There are many businessmen and shareholders who believe that the sole purpose of business is to create money for its shareholders. Noted American economist and statistician Milton Friedman believed that the only responsibilities the businesses have, is towards their shareholders.
In his book ‘Capitalism and Freedom’ he writes that businesses are run to make profit and a slice of that profit is for the shareholders who invested in them. When businesses start concerning themselves with community – it leads to totalitarianism. Many economists and businessmen subscribe to this Doctrine of Friedman.
The companies were slow to realise that with shareholders – environment, employees, consumers, citizens of the city and country, government, suppliers, business associates, trade unions and even competitors are the stakeholders of their decisions and policies. The long term ramifications of running a company or an organization affect everyone. In 1998, retailers at Jones and Pollitt abused their powers and brought down the quality as well as the company by their narrow sightedness of making a few quick bucks (Crane and Matten, 2004).
Big businesses have many small and medium suppliers that form their supply chain. These suppliers from Small and Medium scale Enterprises somehow bypass their responsibilities towards society and environment. Most of the big companies like Nike, Adidas , McDonald’s, Apple and others have been panned by pressure groups of vigilantes who want to ensure that small suppliers of big giant corporations share the responsibilities of people and planet (Petts, 1998; Spence, 1999; Sarbutts, 2003).