Case 12
Question:
Consider the question from the body of the chapter, “Does Ethics Mean Good Business?” Would Milton Friedman and John Mackey agree with what the text has to say on the matter? How would each of them answer the question?
Answer:
Both Friedman and Mackey don’t agree with what the text had to say, each has his own opinion on how working under ethics can make a company profitable. In Friedman’s article “The Social Responsibility of a Business is to Increase its Profits”, he stated that for a business to be profitable, there is only and only one corporate social responsible framework to work with under certain rules; that is engage in an open and free competition without fraud and deception. Mackey strongly disagreed with Friedman’s opinion, as he states that each person or stakeholder affected by the company “customer, employee, supplier, public” have an expected need and want from the company itself. Of course the goal of the shareholders is to gain profit, but other stakeholders like customers might want good customer service.
Mackey agrees with Friedman regarding companies should work under corporate social responsibility, but the company should care more about their customers, suppliers, and the community. He states that most successful companies are ones that put customer satisfaction as their top priority. Whilst by interpreting Friedman’s words we can say that customers to him are only means to justify the end.
Friedman’s reaction towards Mackey’s statement regarding donation of 5% of net profits to philanthropy was negative. Friedman said that if it was not for the US system of tax laws, then the company would not have given out donations. He also states that it is not fair for the investors that their money is going away; it’s their money they have the right to do whatever they want with it. Finally, I believe that if an organization works under CSR framework and takes into consideration all different stakeholders affected by
Consider the question from the body of the chapter, “Does Ethics Mean Good Business?” Would Milton Friedman and John Mackey agree with what the text has to say on the matter? How would each of them answer the question?
Answer:
Both Friedman and Mackey don’t agree with what the text had to say, each has his own opinion on how working under ethics can make a company profitable. In Friedman’s article “The Social Responsibility of a Business is to Increase its Profits”, he stated that for a business to be profitable, there is only and only one corporate social responsible framework to work with under certain rules; that is engage in an open and free competition without fraud and deception. Mackey strongly disagreed with Friedman’s opinion, as he states that each person or stakeholder affected by the company “customer, employee, supplier, public” have an expected need and want from the company itself. Of course the goal of the shareholders is to gain profit, but other stakeholders like customers might want good customer service.
Mackey agrees with Friedman regarding companies should work under corporate social responsibility, but the company should care more about their customers, suppliers, and the community. He states that most successful companies are ones that put customer satisfaction as their top priority. Whilst by interpreting Friedman’s words we can say that customers to him are only means to justify the end.
Friedman’s reaction towards Mackey’s statement regarding donation of 5% of net profits to philanthropy was negative. Friedman said that if it was not for the US system of tax laws, then the company would not have given out donations. He also states that it is not fair for the investors that their money is going away; it’s their money they have the right to do whatever they want with it. Finally, I believe that if an organization works under CSR framework and takes into consideration all different stakeholders affected by