CSR Contrasting Different Vantage Points Research Paper

Pages: 8 (2579 words)  ·  Bibliography Sources: 5  ·  Level: Doctoral  ·  Topic: Business - Ethics  ·  Buy This Paper

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[. . .] Milton Friedman worked primarily as an economist and won the Nobel Prize in economics in 1976 for his contribution to the field primarily advocating for the effectiveness of free-markets. Peter Drucker is known for his assertion that the creation of business ethics singles out business unfairly for distinct ethical treatment, of subordinating ethical imperatives to political concerns, and of not constituting ethics at all, but ethical window dressings used for alterior political gains (Drucker, 1981).

Friedman has long maintained, ever 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). Furthermore, Friedman argues that the current trend toward greater corporate social responsibility is in direct opposition to the advantages that stand to be gained through the adherence to free-market capitalism. 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 considered any action of the executive that considered anything other than the pure profit motive would represent a tax to the company's investors. It is also both interesting and ironic to note that in Freidman makes multiple claims to the advantage to be found within a "free society" yet through his theory he proposes that individuals should not be free to choose anything other than what the principles order, at least at work; which is where most people spend a majority of their time. This paradox persists throughout Friedman's work since the basis for his argument is the principal-agent theory. This argument suggests the executives (agents) are entirely dependent on and should only act with the best interest of the principles (owners of capital).

Drucker, on the contrary, represents more of a moral relativist approach as he attempts to define ethics using different perspectives. Drucker notes that what could be considered a moral offence in one culture may be totally accepted as the norm in another culture. The argument begins by considering the term Business Ethics as it would apply within the Western Tradition (Drucker, 1981). He argues that the term Business Ethics ultimately will have no value or make no sense to the moralist of the Western Tradition. He continues to mention that "Ethics, in the Judeo-Christian tradition is the affirmation that all men and women are alike creatures-whether the creator be called God, Nature, or Society." And that "Business Ethics" is not ethics at all, for it asserts that acts that are not immoral or illegal if done by ordinary folk become immoral or illegal if done by "business."

Drucker furthers this argument by declaring that the term Business Ethics is replacing the term of social responsibility. He references the only one point in which everyone agrees: "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. While Drucker may be in favor of ethics in regards to individuals, he disagrees with the exertion that there is a need for a disciple devoted to business ethics themselves. He describes couple of examples, intending to highlight the lack of consensus regarding business ethics. In each case the offence could have been perceived as ethical or un-ethical depending on the environments.

As Drucker (1981) considers what may constitute business ethics, he excludes considerations of personal integrity. In one such example, Drucker struggles to try to establish that Lockheed Martin was "forced" into bribery to get the Japanese officials to purchase its aircraft without entirely admitting that Lockheed did indeed have a choice in light of the cultural variances. Japanese management guaranteed that the company would be detested and would not be able to operate if it refused to make the "grease payments" requested by the local officials. However, it is important to note in retrospect, that not only did the business not suffer because of its anti-bribery stance; it also gained a level of incredibly valuable admiration by the public; an intangible asset in regards to public sentiment that can be leveraged for potential future marketing efforts with socially conscientious consumer segments.

Conclusion

There exist a plethora of arguments against the need for a salient and effective academic discipline that tackles the role of CSR and business ethics in a modern society. Many of these assertions have been made by some of the leading academic minds as well as some of the most successful practitioners. Furthermore, these arguments are, for the most part, perfectly reasonable arguments when viewed in regard to the authors intended context. That is, based on the assumptions provided, the logic and rationale are near flawless and this is undoubtedly why these individuals have gained much popularity in their respected fields. However, there is increasing evidence mounting that many of these same assumptions are intrinsically flawed.

For example, both Friedman's and Drucker's positions do not consider the potential for systemic risk to the system as a whole and thus their foundations are built on the assumption that capitalism will prevail indefinitely. However, there are real possibilities that the system itself could collapse. One realization that has just recently begun to manifest is that anthropogenic activities are increasingly being identified in their role in the changing climate. Natural infrastructures provided by the regenerative capacities of the Earth's ecological systems are diminishing at an alarming rate. Since business and industry is a major contributor to ecological destruction one might argue that it is necessary to intervene to change the course of industrial activities. Since CSR and business ethics represents a reasonable avenue to change this direction, the salience of its necessity will undoubtedly increase in the years to come.

Works Cited

Alahmad, A. (2010). To Be Ethical Or Not To Be: An International Code of Ethics For Leadership. Journal of Diversity Management, 31-35.

Cavanagh, G., Moberg, D., & Velasquez, M. (1981). The Ethics of Organizational Politics. The Academy of Management Review, 363.

Drucker, P. (1981). What is Business Ethics? The Public Interest, 18-36.

Friedman, M. (1970, September 13). The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine.

Friedman, M. (1991). The social responsibility of business to increase its profits. New York: North River Press.

Friedman, M. (2002). Capitalism and Freedom: Fortieth Anniversary… [END OF PREVIEW]

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