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Corporate Social Responsibility: Mending the Model
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17185 |
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Section : |
MODERN THOUGHT
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| Issue
Date : |
12 / 1990 |
5,570 Words |
| Author
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Bill Shaw
Bill Shaw is professor of legal environment at the University
of Texas at Austin. He is president of the American Business
Law Association and chair of its Business Ethics section. He
is co-author, with Art Wolfe, of The Legal Environment (PWS
Kent) and author of Environmental law: People, Pollution, and
Land Use (West Publishing Company). |
Milton Friedman is famous, or infamous, for the proposition "[the social responsibility of corporate mangers] is to conduct the business in accordance with [the shareholders'] desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom." He makes it sound so easy that one has to wonder what all the fuss is about.
Friedman's view would be particularly challenging if it could be taken to mean that corporate managers were obligated to meet all costs (not just economic but social as well). And managers would find his advice to be much more helpful if his simplistic "ethical custom" was convertible into moral principles - principles that engaged the concepts of harm, fairness, altruism, and benevolence in a meaningful way. But he doesn't do that, and the effort to pull any guidance from his statement runs the risk of stretching his meaning further than he intended.
The widely held perception that corporate managers are not reaching even this minimum level of performance - witness the public outcry about environmental disasters, defective products, Wall Street fraud, the S&L scandal, money laundering - keeps the inquiry alive. Friedman, of course, would never sanction conduct that violated the law or intruded on the implicit morality of capitalism. Honesty, trust, and loyalty are, after all, the moral glue that holds the economic system together. But the glaring failure of many managers to reach even this level has much to do with the poverty of Friedman's analysis. He fails to give voice to the complex moral dynamic of individuals in an organizational setting, individuals who try to find meaning and fulfillment in
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