Friedman vs Drucker
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
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
References: Drucker, P. (1981). What is business ethics? Public Interest, 63, 18-36. http://www.nationalaffairs.com/doclib/20080708_1981632whatisbusinessethicspeterfdrucker.pdf Drucker, P. (2010). The frontiers of management. Boston, MA: Harvard Business School Publishing Corporation. http://books.google.com/books?hl=en&lr=&id=OxmGeeM0WgUC&oi=fnd&pg=PR9&dq=frontiers+of+management+drucker+1986&ots=9nEBk-OLlw&sig=1rrqd43af1gwJatluKuHv0PEu00#v=onepage&q&f=false 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. http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp- business.html