Practice question · True or false
In Friedman’s shareholder view, a CEO donating corporate funds to personal causes is effectively spending other people’s money without a mandate.
Hints
- The argument concerns whose money is being given away.
- Managers spend funds belonging to others.
Show the answer
True
Why
That is Friedman’s core argument: social spending is the shareholders’ (or the individual’s) choice, not management’s. The stakeholder rebuttal is not that he misdescribed the mandate, it is that neglected stakeholders eventually make profits impossible.
Practise Corporate Social Responsibility
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More questions on Corporate Social Responsibility
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