Companies and Social Responsibility - Not as straightforward as you would imagine

What is the social responsibility of a business?  There are many and varied responses, but the most straightforward one that I've seen is from Milton Friedman who said

There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

Sounds brilliant and simple, right?  As with all such things though, the devil is in the details.  To be precise,

1.  What are these rules of the game?  Who makes them?  How are they enforced?
2. What are the societal norms that exist in your ecosystem?
3. Increase Profits in what timeframe?  

Justin Fox points this out in much gorier detail -

The most obvious complication is that the "rules of the game" Friedman mentions aren't set by impartial referees. In the U.S., laws and regulations are crafted in a political system where some businesses expend huge sums of money to ensure that the rules favor them — and in multiple countries in 2008, the rules were set aside to rescue companies whose failure was seen as too much for the financial system to handle.

The rules of the game also go way beyond those enforced by governments. Economies function within a set of societal norms — about how much employees and executives should be paid, about gender roles, about community obligations, about how seriously to take tax laws, about appropriate behavior toward customers — that can change over time, and have a huge impact on overall economic success. It's likely that Friedman teachings on corporate responsibility have played a role in changing those norms.

Also, the commandment to increase profits is not nearly as straightforward as it might seem. Over what time frame is this profit-increasing suppose to transpire? It's easy to throw out the phrase "long-term," but far harder to define it or work toward it. And while economists, when they say "profit," are thinking of the abstract notion of increasing a firm's economic value, people in business have to make do with much less comprehensive metrics.

In short, aphorisms look good, but don't quite capture the nuances....