This paper explores the level of obligation called for by Milton Friedman’s classic essay “The Social Responsibility of Business is to Increase Profits.” Several scholars have argued that Friedman asserts that businesses have no or minimal social duties beyond compliance with the law. This paper argues that this reading of Friedman does not give adequate weight to some claims that he makes and to their logical extensions. Throughout his article, Friedman emphasizes the values of freedom, respect for law, and duty. (...) The principle that a business professional should not infringe upon the liberty of other members of society can be used by business ethicists to ground a vigorous line of ethical analysis. Any practice, which has a negative externality that requires another party to take a significant loss without consent or compensation, can be seen as unethical. With Friedman’s framework, we can see how ethics can be seen as arising from the nature of business practice itself. Business involves an ethics in which we consider, work with, and respect strangers who are outside of traditional in-groups. (shrink)

It appears that in the 30 years that business ethics has been a discipline in its own right a model of business ethics has not been proffered. No one appears to have tried to explain the phenomenon known as 'business ethics' and the ways that we as a society interact with the concept, therefore, the authors have addressed this gap in the literature by proposing a model of business ethics that the authors hope will stimulate debate. The business ethics model (...) consists of three principal components that are interconnected by five sub-components. The introduced model makes a contribution to the creation of a conceptual framework for business ethics. A few tentative conclusions may be drawn from the introduced model of business ethics. The model aspires to be highly dynamic. The ultimate outcome is dependent upon the evolution of time and contexts. It is also dependent upon and provides reference to the behaviours and perceptions of people. The model proposes business ethics to be a continuous and an iterative process. There is no actual end of the process, but a constant reconnection to the initiation of successive process iterations of the business ethics model. The principals and sub-components of the model construct the dynamics of this continuous process. They provide guidance on what and how to explore our common efforts to understand the phenomenon known as business ethics. The model provides opportunities for further research in the field of business ethics. (shrink)

To date, the study of business ethics has been largely the study of the ethics of large companies. This paper is concerned with owner/managers of small firms and the link between the personal ethics of the owner/manager and his or her attitude to ethical problems in business. By using active membership of an organisation with an overt ethical dimension as a surrogate for personal ethics the research provides some, though not unequivocal, support for the models of Trevino and others that (...) suggest a link between personal ethics and business ethics. (shrink)

The paper questions current assumptions about the benefits of corporate social responsibility and the claims that corporations make on behalf of their corporate social responsibility programmes. In particular, the paper suggests that the use of corporate social responsibility for public relations ends raises moral problems over the motivation of corporations. The paper cautions that the justifications which corporations employ may either be immoral or inaccurate with regard to the empirical evidence gained from a small-scale qualitative study carried out in the (...) UK at a time when the practice of corporate social responsibility was expanding quickly (1989). It is noticeable, in retrospect, that great emphasis is placed upon environmental rather than social responsibility. This implies that organisations are primarily reactive in their development of corporate social responsibility programmes and that they respond to external pressures rather than working out the nature of their corporate responsibilities. It might suggest that corporations only take such actions when they feel compelled to do so by consumerist and environmentalist lobbies. The paper argues that corporations do need to find moral justifications for their moral activities and to ensure that corporate social responsibility practice lives up to the claims made by public relations practitioners. The paper explores the nature of public relations and illustrates how its responsibility for corporate social responsibility extends beyond truthfulness in publicity. (shrink)

The primary objective of this article is to develop a framework for analyzing the ethical foundations and implications of shareholder wealth maximization (SWM). Distinctions between SWM and the more widely examined construct of profit maximization are identified, the most significant being the central role played in SWM by the market mechanism for pricing the corporation''s securities. It is argued that empirical tests concerned with evaluating the ethical implications of SWM will almost surely involve a joint hypothesis. A number of recent (...) empirical studies aimed at testing hypotheses with explicit ethical content are reviewed. (shrink)

Libertarian theories of the normative core of the corporation hold in common the view that is the responsibility of publicity held corporations to return profits to shareholders within the bounds of certain moral side-constraints. Side-constraints may be either weak (grounded in the rules of the game) or strong (grounded in rights). This essay considers libertarian arguments regarding the normative core of the corporation in the context of global capitalism and in the light of actual corporate behavior. First, it is argued (...) the weak side-constraints view is conceptually incoherent when applied in a global context. Second, it is argued that proponents of the libertarian strong side-constraints view lack an adequate theory of rights. Third, both the weak side-constraints view and the strong side-constraints view are shown to be unsatisfactory insofar as they fail to adequately address the coercive power of corporations. The main conclusion of this essay is that a viable libertarian theory of the corporation has yet to be articulated. (shrink)

The study investigated the effects of three cultural variables – country of employment, race/ethnicity and religion – on managerial views of profit and 15 other business priorities. In total, 203 responses were obtained (120 randomly and 83 by quota) from executives and managers belonging to either of two race/ethnic groups (Caucasian and Chinese) and three religious denominations (Christian, Buddhist and Malay Muslim) located in three different countries (Australia, Singapore and Malaysia). Findings indicated that these three different cultural variables affected (to (...) varying degrees) the attitudes of managers towards profit and other related business concerns. Managers working in Malaysia, the Malay Muslims and Caucasians in particular, had the highest regard for profit whilst those employed in Australia were found, on the whole, to be the most (socially) considerate toward their employees, customers and environment. This study pointed to the need for cultural ethics as a complementary function in business. (shrink)

The views of thirteenth century Catholic thinker Thomas Aquinas and twentieth century economist Milton Friedman on the social responsibility of business are contrasted by probing the foundations of their positions. The basis of Aquinas' normative stance in political economy is found in the metaphysical and moral realism of the classic tradition. The role Descartes and Hobbes played in overturning this philosophical starting point and ushering in an age of ideology is traced out. Friedman's commitment to Comte's vision of positivism is (...) revealed and what this entails for metaphysics, ethics, and economics is given. (shrink)

In recent times, representatives of American management science have been arguing increasingly for a functionalization of ethics to change economic thinking: what they are seeking is the systematic integration of ethics into the economic paradigm. Using the insights developed by Hirschman, I would like to show how one must first expose the rhetoric of those critics of change in order then to implement that which is new. Such an 'unmasking' works particularly well when one can defuse the arguments of the (...) reactionaries — which is precisely what one achieves by strategically integrating ethics into economics. In his work The Rhetoric of Reaction Hirschman examines three basic forms of reactionary thought: the perversity thesis, the futility thesis, and the jeopardy thesis. According to the perversity thesis, intended goals are transformed into their opposites. The futility thesis argues that the setting of goals is useless since history runs its own course independent of those goals. The jeopardy thesis claims to preserve what already exists since change might substantially endanger that which has already been achieved. The importance of Hirschman's ideas for the strategic interplay between the academic disciplines can be seen quite clearly in the example of German business ethics. This will be displayed below with reference to Hirschman's three theses. Finally, implications will be drawn for business ethics in general and for management theory in particular. (shrink)

Many leading management scientists have advocated ethicalism: the incorporation of social and ethical concerns into traditional "rational" OR-MS techniques and management decisions. In fact, elementary forms of decision analysis can readily be augmented, using ethical theory, in ways that sweep in ethical issues. In addition, alternative conceptual models of Decision-Analysis, Game-Theory and Optimality are now available, all of which have brought OR-MS and Business-Ethics into a closer alignment.

The choice of new technology in a resource-based industry has far-reaching implications for its ethical performance. The kraft pulping industry uses considerable amounts of wood as raw material, and regulatory agencies have been tightening their control limits for effluent, solid waste and air emissions. The technological solutions required to reduce the environmental impact of the industry are shown to have the potential of causing social hardship for the mill's employees, the affected communities, lenders, and owners. In some instances, the technological (...) solutions give rise to new environmental challenges. Forestry practices are influencing the public's perception of the kraft pulping industry, its ethical and environmental performance, its profitability, and the properties of its product, which may increase wood requirements. New forestry practices have the potential to reduce the forest land area required to sustain the kraft pulp production at a given level but ethical problems associated with genetic manipulation, phenodiversity, and biodiversity are identified. This paper analyzes the interface between environmental protection, ethics, and choice of technology. (shrink)