Friedman -vs- Drucker
Abstract
Business ethics is a form of applied ethics that scrutinizes ethical principles and moral or ethical problems that occur in a business environment. In the more conscientious marketplaces of the 21st century, the demand for more ethical business processes and actions (referred to as ethicism) is mounting. In addition, pressures for the application of business ethics are being exerted through enactment of new public initiatives and laws (Cuizon, 2009).
Friedman Vs Drucker
Milton Friedman and Peter Drucker both were noted management authorities; Milton Friedman primarily was an economist and even won the Nobel Prize in economics in 1976 when the Nobel Prize held more honor than it does today. Both operated in a different time, however. Their views of ethical behavior and social responsibility cannot be seen as being complete in today 's business environment.
Milton Friedman
Milton Friedman (2002) has maintained, since the 1960s, that the purpose of any business is to maximize profits and so return as much value for shareholders as possible. Friedman (2002) holds that the current trend toward greater corporate social responsibility is in direct opposition to this position:
Woodbury (n.d.) quotes the 1970 article, "The social responsibility of business to increase its profits" that appeared in a compilation. In that article, Friedman (1991) states:
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 (p. 245).
Friedman (1991) clarifies his position in saying that the pursuit of profits is not the game with no rules. Rather, it is the responsibility of the organization to engage "in open and free competition without deception or fraud" (Friedman, 1991; p. 245).
A very different view of the organization as a profit machine only, but it
Business ethics is a form of applied ethics that scrutinizes ethical principles and moral or ethical problems that occur in a business environment. In the more conscientious marketplaces of the 21st century, the demand for more ethical business processes and actions (referred to as ethicism) is mounting. In addition, pressures for the application of business ethics are being exerted through enactment of new public initiatives and laws (Cuizon, 2009).
Friedman Vs Drucker
Milton Friedman and Peter Drucker both were noted management authorities; Milton Friedman primarily was an economist and even won the Nobel Prize in economics in 1976 when the Nobel Prize held more honor than it does today. Both operated in a different time, however. Their views of ethical behavior and social responsibility cannot be seen as being complete in today 's business environment.
Milton Friedman
Milton Friedman (2002) has maintained, since the 1960s, that the purpose of any business is to maximize profits and so return as much value for shareholders as possible. Friedman (2002) holds that the current trend toward greater corporate social responsibility is in direct opposition to this position:
Woodbury (n.d.) quotes the 1970 article, "The social responsibility of business to increase its profits" that appeared in a compilation. In that article, Friedman (1991) states:
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 (p. 245).
Friedman (1991) clarifies his position in saying that the pursuit of profits is not the game with no rules. Rather, it is the responsibility of the organization to engage "in open and free competition without deception or fraud" (Friedman, 1991; p. 245).
A very different view of the organization as a profit machine only, but it
References: Bruno, M. (2002). Breaking Point: The mania for maximizing profits is taking its human toll. And that toll is costly to banks. But, in the current environment, can anything be done about it? US Banker, p. NA. Chen, M. (2001). Inside Chinese Business: A Guide for Managers Worldwide. (Boston: Harvard Business Press). Cuizon, G. (2009). What is Business Ethics? Ethical Principles Practiced in Business. Retrieved from http://businessmanagement.suite101.com/article.cfm/what_is_business_ethics#ixzz0eEPi WJSB on January 29, 2010. Dobson, J. (1989). Corporate Reputation: A Free-Market Solution to Unethical Behavior. Business and Society, 28, p. 1. Retrieved from http://bas.sagepub.com/cgi/pdf_extract/28/1/1 on January 29, 2010. Drucker, P.F. (1981). What is business ethics? National Affairs, 63. pp. 18-36. Retrieved on January 29, 2010 from http://www.nationalaffairs.com/public_interest/detail/what-is-business-ethics. Friedman, M. (2002). Capitalism and Freedom: Fortieth Anniversary Edition. (Chicago: University of Chicago Press). Hoffman, W.M., and Moore, J.M. (1982). What is business ethics? A reply to Peter Drucker. Journal of Business Ethics 1 (1982) 293-300. Retrieved from http://www.springerlink.com/content/l37t8p6180084058/fulltext.pdf?page=1 on February 8, 2010. Shaw, B. (1988). A Reply to Thomas Mulligan 's "Critique of Milton Friedman 's Essay 'the Social Responsibility of Business to Increase its Profits. '“ Journal of Business Ethics, 7(7). Retrieved on January 29, 2010, from http://philpapers.org/rec/SHAART-2. Witt, S. (2000). International Business Can Be Social Minefield. San Diego Business Journal, 21(25), p. 25. Woodbury, M. (n.d.). The Bout of the Century? Information Ethics vs. E-Commerce. Ubiquity. Retrieved from http://www.acm.org/ubiquity/views/m_woodbury_1.html. on January 29, 2010.