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What Is Business Ethics Essay

1504 words - 7 pages

The articles, “What is business ethics?” by Peter Drucker and “The Social Responsibility of Business is to Increase its Profits” by Milton Friedman are about Business ethics and social responsibility to society at large. While both authors agree that we should have ethics in the business world, they argue that society holds corporations and ordinary individuals to different set of standards.
Keywords: Social Responsibilities and Business Ethics
In order to exam the assigned articles, it was important to understand the true definition of what is meant by social responsibility and business ethics to better understand whether Drucker and Friedman fully exploited ethics as we ...view middle of the document...

He earned a doctorate in International Law in Germany. His career as a business thinker took off in the 1940’s, when his initial writing on politics and society won him access to the internal workings of General Motors. Drucker was interested in the growing importance of people who worked with their minds rather than their hands.
According to Milton Friedman in his article, The Social Responsibility of Business is to Increase its Profits, there is only one and only one social responsibility of business, “to use it resources and engage in activities designed to increase its profits so long as it stay within the rules of the game, which is to say, engage in open and free competition without deception or fraud.” (Friedman, p 5). From my viewpoint, that statement alone was the driving force of Friedman’s mindset towards business and social responsibility. Additionally, Friedman believed that the business executive has the responsibility of conducting business with his employers and stockholders in mind and not really what the corporation can do for the society as a whole. In this stance, I am afraid that if corporations follow Friedman’s philosophy that corporation executives decisions are tied to money and making a profit, that more and more businesses will compete for the same target market in our already declining economy and shortcuts will be taken and less than ethical decision will be made. Examples, we could see companies producing knowingly faulty equipment, like Toyota with over a million of cars recalled for faulty breaking systems, or product substitution parts sold to US military or faulty Firestone tires sold to Ford Motor Company, or China exporting faulty toys sold to US companies and so on. Surely, as Freidman stated, the executive should attempt to accomplish this goal by abiding by the laws that are set forth by local, state and federal regulations; however, his primary focus remain on making money for his employer.
Friedman admits that corporate executive is also a person on his own rights, which means he has personal obligations to his family, church, school, charity and other personal obligations; however, these are examples of social responsibilities of the individual and not that of his position as a business executive. I disagree with Friedman in the above claim that business executive primary job is to make money for the company and that the business executive can’t abide by his own social responsibility while serving in the capacity of as a business executive. Surely, making money for a corporation is part of it, but the responsibility of a business executive is to ensure ethics is being applied to its work force is more important. Therefore, no personnel are being mistreated; hiring practices are fair and unjust and the executive is following the applicable local, state and federal laws. Secondly, I believe a business executive primary goal is to follow his moral ethics responsibility to society by...

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