Friedman Vs. Drucker
The concept of business ethics continues to spark wide and varied responses to its very meaning and to its practical application in the daily operations of the corporate enterprise as well. Two noted business authors and leaders, Peter Drucker and Milton Friedman, have expressed differing positions on the role of corporate social responsibility. From Drucker’s writings, it is abundantly clear he believes it is critically important not only how public and private enterprises manage their resources, but also how they operate morally and ethically within a social organizational structure. To this end, he championed the need for businesses to develop core values that emphasize a strong focus on corporate social responsibility, while still maintaining total accountability to the organization. Conversely, Milton Friedman held an opposing view and surmised that a businesses’ primary concern ought to be squarely focused on the maximization of profits, for a corporation cannot be capable of having any kind of social responsibility, as it is not an actual living entity able to entertain such ideals, rather, it exists purely as a mechanism to generate profits for its shareholders. Personally, while I find both views have solid merit, I also believe that between these two arguments are strong ideals that can be taken together from each premise, such that both corporate responsibility objectives can exist, without sacrificing shareholder values or the individual views held by the various stakeholders of the enterprise.
To better understand each author’s position, it is essential to examine both of the works in closer detail. In Drucker’s, “What is ‘Business Ethics’?” (1981) he seeks to better define the ethical framework upon which business ethics ideologies are based upon. Because he has seen a disturbing trend under which modern business ethical ideals are constructed upon weak ethical premises, he demonstrates the need to reframe the current ethical framework to better reflect traditional Western ethical standards upon which historically sound ethical principles have evolved. Setting the foundation for this argument, Drucker (1981) writes: All authorities of the Western tradition-from the Old Testament prophets all the way to Spinoza in the 17th century, to Kant in the 18th century, Kierkegaard in the 19th century, the Englishman F.H. Bradley (Ethical Studies) or the American Edmond Cahn (The Moral Decision)—are, however, in complete agreement on one point: There is only one ethics, one set of rules of morality, one code, that of individual behavior in which the same rules apply to everyone alike. (p. 19)
He goes on to assert that despite any differences in cultures or social statuses there ought to exist only one axiom upon ethics is firmly founded upon, and that is, a single code of ethics that is applicable equally to all. Drucker posits that current business ethics parallels the same ethical principles as “casuistry”, a premise developed to address the ethical and moral complexities facing individuals in power. In its essence, casuistry was premised upon having two differing ethical standards, one wherein the ruler would weigh social responsibility demands against their own individual ethical principles. Extending this premise into the realms of modern day business ethics, Drucker demonstrates that when there are differing ethical standards applied to an individual’s behavior than to those that are taken by a business, a point clearly illustrated in his example on extortion, wherein an individual committing extortion is judged much differently than a corporation essentially performing the same acts in the name of maximizing profits, Drucker argues that it is this ethical reasoning that mirrors more the origins of casuistry than that of traditional Western ethical principles. Drucker (1981) surmises that, “if ‘business ethics’ continues to be ‘casuistry’ its speedy demise in a cloud...
References: Drucker, P. (1981). What is business ethics? Public Interest, 63, 18-36.
Drucker, P. (2010). The frontiers of management. Boston, MA: Harvard Business School Publishing Corporation.
Friedman, M. (1970, September 13). The social responsibility of business to increase its profits. New York Times, New York, N.Y. pp. 32, 33,122-124, 126.
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