Discussion: View Thread

Alternative to Friedman

  • 1.  Alternative to Friedman

    Posted 02-06-2009 12:05

    Hi all,

    Two questions:

     

    1.       Can anyone recommend a concise, well-written article (appropriate for MBAs) that is a response to Milton Friedman's classic piece on social responsibility?

    2.       I'm thinking of assigning Porter's HBR article on CSR and Strategy.  Does anyone have a favorite case that would be a good accompaniment to that reading?

    Thanks!

    _______________________________________________________________________

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  • 2.  Alternative to Friedman

    Posted 02-06-2009 12:19
    Hi, Linda.  Regarding your first point, I've used this give-and-take between Milton Friedman and Whole Foods' John Mackey in both my EMBA and MBA Business Ethics classes.  It goes over very well.

    Lori

    ???Rethinking the Social Responsibility of Business.???  2005. Reason, October, pp. 28-37.


    At 09:04 AM 2/6/2009, Linda Trevino wrote:
    Hi all,
    Two questions:
     
    1.       Can anyone recommend a concise, well-written article (appropriate for MBAs) that is a response to Milton Friedman???s classic piece on social responsibility?
    2.       I???m thinking of assigning Porter???s HBR article on CSR and Strategy.  Does anyone have a favorite case that would be a good accompaniment to that reading?
    Thanks!
    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

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    _______________________________________________________________________
    <x-sigsep>

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    College of Business Administration
    San Diego State University
    5500 Campanile Drive
    San Diego, CA   92182

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    </x-sigsep>


  • 3.  Alternative to Friedman

    Posted 02-06-2009 12:24

    Linda,

     

    Regarding your first question, I used portions of Chapter 2 of Hosmer's The Ethics of Management, 5th Ed. in my MBA class for this purpose. It seemed to provide the impetus for good discussion.

     

    And, somewhat to my surprise, my MBA's responded really well when I had them read selected portions of Ferraro, Pfeffer & Sutton's outstanding 2005 AMR piece on economics language and assumptions. The article doesn't reference Friedman per se, but portions of it tackle the moral problems of economic assumptions so accessibly that my MBAs really enjoyed it. It was the most balanced discussion of the limits of economic reasoning that I have ever seen from MBAs.

     

    Jeff

     

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Linda Trevino
    Sent: Friday, February 06, 2009 10:05 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: [SIM] Alternative to Friedman

     

    Hi all,

    Two questions:

     

    1.       Can anyone recommend a concise, well-written article (appropriate for MBAs) that is a response to Milton Friedman's classic piece on social responsibility?

    2.       I'm thinking of assigning Porter's HBR article on CSR and Strategy.  Does anyone have a favorite case that would be a good accompaniment to that reading?

    Thanks!

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 4.  Alternative to Friedman

    Posted 02-06-2009 12:49
    Regarding Jeff's second point on economic reasoning, I strongly suggest Jensen & Meckling's lesser known piece on human nature.  In addition to offering an alternate model, it points out economists' need for simplifying assumptions that enable human behavior to be modeled mathematically.  It's a great read.

    Lori

    Jensen, M. C. and W. H. Meckling (1994). "The nature of man." Journal of Applied Corporate Finance 7(2): 4-19.

    At 09:23 AM 2/6/2009, Jeff Thompson wrote:
    Linda,
    Regarding your first question, I used portions of Chapter 2 of Hosmer???s The Ethics of Management, 5th Ed. in my MBA class for this purpose. It seemed to provide the impetus for good discussion.
     
    And, somewhat to my surprise, my MBA???s responded really well when I had them read selected portions of Ferraro, Pfeffer & Sutton???s outstanding 2005 AMR piece on economics language and assumptions. The article doesn???t reference Friedman per se, but portions of it tackle the moral problems of economic assumptions so accessibly that my MBAs really enjoyed it. It was the most balanced discussion of the limits of economic reasoning that I have ever seen from MBAs.
     
    Jeff
    <x-sigsep>

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    College of Business Administration
    San Diego State University
    5500 Campanile Drive
    San Diego, CA   92182

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    </x-sigsep>


  • 5.  Alternative to Friedman

    Posted 02-06-2009 13:42

    Linda – Good question, that many of us struggle with.

     

    I have had good success over the years using the Frank Abrams' HBR piece = Abrams, F. W. (1951). Management's responsibilities in a complex world. Harvard Business Review, 29(3), 29-34.  This is particularly enjoyable when, after blocking out the date and author's bio, I ask them who Frank Abrams is (senior executive at Standard Oil of New Jersey, not ExxonMobil) and when he wrote the article (1951!).  The MBAs often guess – some business ethics professor and he wrote it in the 1990s!

     

    I, too, have used Porter and Kramer's (can't forget the lesser-known co-author) HBR piece, although Abrams seem to address Friedman more directly given the similar time of his writing.

     

    Good luck!

     

    Jim Weber, Ph.D.

    Professor of Business Ethics and Management

    Senior Fellow, Beard Center for Leadership in Ethics

    Rockwell Hall 813, Duquesne University

    600 Forbes Ave., Pittsburgh, PA 15282

    office: 412-396-5475

    fax: 412-396-4764

    www.business.duq.edu/Beard

     

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Linda Trevino
    Sent: Friday, February 06, 2009 12:05 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: [SIM] Alternative to Friedman

     

    Hi all,

    Two questions:

     

    1.       Can anyone recommend a concise, well-written article (appropriate for MBAs) that is a response to Milton Friedman's classic piece on social responsibility?

    2.       I'm thinking of assigning Porter's HBR article on CSR and Strategy.  Does anyone have a favorite case that would be a good accompaniment to that reading?

    Thanks!

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 6.  Alternative to Friedman

    Posted 02-06-2009 14:08
    Hard to beat Ed Freeman's recent "Managing for Stakeholders," which is an accessible and up to date response.  It is was commissioned for the 8th edition (2009) of Ethical Theory and Business (see below) which also includes a half dozen ethics cases and two legal cases that address the debate between Friedman and Freeman (see chapter 2).  The NYSEG case is a good basic case for these issues.  I just taught this material to my MBAs and they responded with enthusiastic interest.  Ed's essay is also available in one or two other recent textbooks.

    http://www.pearsonhighered.com/educator/academic/product/0,3110,0136126022,00.html

    Denis
    _____
    Denis G. Arnold, Ph.D.
    Surtman Distinguished Scholar in Business Ethics
    University of North Carolina at Charlotte
    9201 University City Blvd.
    Charlotte, NC 28223-0001
    Office: (704) 687-7703
    Fax: (704) 687-3123





    On Feb 6, 2009, at 12:04 PM, Linda Trevino wrote:

    Hi all,
    Two questions:
     
    1
    .       Can anyone recommend a concise, well-written article (appropriate for MBAs) that is a response to Milton Friedman's classic piece on social responsibility?
    2
    .       I'm thinking of assigning Porter's HBR article on CSR and Strategy.  Does anyone have a favorite case that would be a good accompaniment to that reading?
    Thanks!
    _______________________________________________________________________
    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org_______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 7.  Alternative to Friedman

    Posted 02-06-2009 14:26

    I also suggest the classic debate between Friedman in the AER in the late fifties or early sixties.  As Lori notes, assumptions do count.  As for something recent, little is better than the first chapter of Sandra Waddock's book.

     

    tom

     

    Dr. Thomas A. Bausch, Professor

    Department of Management

    College of Business Administration

    Marquette University 1881

    Milwaukee WI 53201 1881

    Tel:     414 288 1657

    Home: 414 771 2533

    Fax:    414 288 5765

    Cell:    414 690 9498

    E-mail: thomas.bausch@marquette.edu

    Home:  bernieb@milwpc.com

     

    "If one has private ends to serve,

    one will never be able to win the world." (Tao Te Ching, No. 48)

     

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Lori Ryan
    Sent: Friday, February 06, 2009 11:49 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

     

    Regarding Jeff's second point on economic reasoning, I strongly suggest Jensen & Meckling's lesser known piece on human nature.  In addition to offering an alternate model, it points out economists' need for simplifying assumptions that enable human behavior to be modeled mathematically.  It's a great read.

    Lori

    Jensen, M. C. and W. H. Meckling (1994). "The nature of man." Journal of Applied Corporate Finance 7(2): 4-19.

    At 09:23 AM 2/6/2009, Jeff Thompson wrote:

    Linda,
    Regarding your first question, I used portions of Chapter 2 of Hosmer's The Ethics of Management, 5th Ed. in my MBA class for this purpose. It seemed to provide the impetus for good discussion.
     
    And, somewhat to my surprise, my MBA's responded really well when I had them read selected portions of Ferraro, Pfeffer & Sutton's outstanding 2005 AMR piece on economics language and assumptions. The article doesn't reference Friedman per se, but portions of it tackle the moral problems of economic assumptions so accessibly that my MBAs really enjoyed it. It was the most balanced discussion of the limits of economic reasoning that I have ever seen from MBAs.
     
    Jeff

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    College of Business Administration
    San Diego State University
    5500 Campanile Drive
    San Diego, CA   92182

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 8.  Alternative to Friedman

    Posted 02-06-2009 15:19
    Dear Linda,

    I have been using (not surprisingly!) Ed Freeman's article  "Stakeholder theory of the modern corporation" (in Donaldson-Wehane-Cording 'Ethical Issues in Business') as basic reading, and than present Ed's and al. more recent work that explains how, from a stakeholder theory point of view, Friedman can be seen as an 'early stakeholder theorist'....

    I have been using this approach in France and in Geneva to MBA students and it always generate good discussions.

    On your second question: I like the old but still fascinating case of H.B Fuller and the 'Resistoleros' as a way to discuss the boundaries of CSR from different points of view (including 'strategic CSR' by Porter). BTW, does anyone know of any study on the impact of NBC Dateline one year after the company's announcement to stop the sale of Resistol? What happened to HB Fuller's stock price/reputation after the TV program?

    Thanks for two interesting questions!

    Best,
    Simone

    _________________________________________________

    Simone de Colle
    Doctoral Candidate in Management and Business Ethics
    The Darden School
    University of Virginia
    PO Box 6550
    Charlottesville, VA 22906-6550
    United States


    _________________________________________________




    On Feb 6, 2009, at 6:04 PM, Linda Trevino wrote:

    Hi all,
    Two questions:
     
    1.       Can anyone recommend a concise, well-written article (appropriate for MBAs) that is a response to Milton Friedman's classic piece on social responsibility?
    2.       I'm thinking of assigning Porter's HBR article on CSR and Strategy.  Does anyone have a favorite case that would be a good accompaniment to that reading?
    Thanks!
    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org_______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________










    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________



  • 9.  Alternative to Friedman

    Posted 02-07-2009 14:28
    Linda,
    I've used Charles Handy's "What's a Business For" with good success.
    Dawn
    ________________________________
    From: Social Issues in Management Listserv [SIM@AOMLISTS.PACE.EDU] On Behalf Of James Weber [weber719@COMCAST.NET]
    Sent: Friday, February 06, 2009 12:41 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Linda – Good question, that many of us struggle with.

    I have had good success over the years using the Frank Abrams’ HBR piece = Abrams, F. W. (1951). Management’s responsibilities in a complex world. Harvard Business Review, 29(3), 29-34. This is particularly enjoyable when, after blocking out the date and author’s bio, I ask them who Frank Abrams is (senior executive at Standard Oil of New Jersey, not ExxonMobil) and when he wrote the article (1951!). The MBAs often guess – some business ethics professor and he wrote it in the 1990s!

    I, too, have used Porter and Kramer’s (can’t forget the lesser-known co-author) HBR piece, although Abrams seem to address Friedman more directly given the similar time of his writing.

    Good luck!

    Jim Weber, Ph.D.
    Professor of Business Ethics and Management
    Senior Fellow, Beard Center for Leadership in Ethics
    Rockwell Hall 813, Duquesne University
    600 Forbes Ave., Pittsburgh, PA 15282
    office: 412-396-5475
    fax: 412-396-4764
    www.business.duq.edu/Beard

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Linda Trevino
    Sent: Friday, February 06, 2009 12:05 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: [SIM] Alternative to Friedman

    Hi all,
    Two questions:


    1. Can anyone recommend a concise, well-written article (appropriate for MBAs) that is a response to Milton Friedman’s classic piece on social responsibility?

    2. I’m thinking of assigning Porter’s HBR article on CSR and Strategy. Does anyone have a favorite case that would be a good accompaniment to that reading?
    Thanks!
    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1


  • 10.  Alternative to Friedman

    Posted 02-08-2009 09:41
    Dear all,

    Just noted that in my old age I left out two key words below. Tom
    ________________________________
    From: Social Issues in Management Listserv [SIM@AOMLISTS.PACE.EDU] On Behalf Of Bausch, Thomas [thomas.bausch@marquette.edu]
    Sent: Friday, February 06, 2009 1:25 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    I also suggest the classic debate between Friedman AND SAMUELSON in the AER in the late fifties or early sixties. As Lori notes, assumptions do count. As for something recent, little is better than the first chapter of Sandra Waddock’s book.

    tom

    Dr. Thomas A. Bausch, Professor
    Department of Management
    College of Business Administration
    Marquette University 1881
    Milwaukee WI 53201 1881
    Tel: 414 288 1657
    Home: 414 771 2533
    Fax: 414 288 5765
    Cell: 414 690 9498
    E-mail: thomas.bausch@marquette.edu<mailto:thomas.bausch@marquette.edu>
    Home: bernieb@milwpc.com

    "If one has private ends to serve,
    one will never be able to win the world." (Tao Te Ching, No. 48)

    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Lori Ryan
    Sent: Friday, February 06, 2009 11:49 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Regarding Jeff's second point on economic reasoning, I strongly suggest Jensen & Meckling's lesser known piece on human nature. In addition to offering an alternate model, it points out economists' need for simplifying assumptions that enable human behavior to be modeled mathematically. It's a great read.

    Lori

    Jensen, M. C. and W. H. Meckling (1994). "The nature of man." Journal of Applied Corporate Finance 7(2): 4-19.

    At 09:23 AM 2/6/2009, Jeff Thompson wrote:

    Linda,
    Regarding your first question, I used portions of Chapter 2 of Hosmer’s The Ethics of Management, 5th Ed. in my MBA class for this purpose. It seemed to provide the impetus for good discussion.

    And, somewhat to my surprise, my MBA’s responded really well when I had them read selected portions of Ferraro, Pfeffer & Sutton’s outstanding 2005 AMR piece on economics language and assumptions. The article doesn’t reference Friedman per se, but portions of it tackle the moral problems of economic assumptions so accessibly that my MBAs really enjoyed it. It was the most balanced discussion of the limits of economic reasoning that I have ever seen from MBAs.

    Jeff

    Lori Verstegen Ryan, Ph.D.
    Professor of Management
    Director, Corporate Governance Institute
    College of Business Administration
    San Diego State University
    5500 Campanile Drive
    San Diego, CA 92182
    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1 _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1


  • 11.  Alternative to Friedman

    Posted 02-08-2009 10:38
    Hi, Linda;

    Re: Friedman, ditto Lori's comment on the Reason Magazine discussion between Friedman and MacKey. And, ditto Simone's comment on HB Fuller. Good cases!

    To build out Porter & Kramer (2006) the Oxfam/Unilever Indonesia (2005) report (principal author Jason Clay) helps illustrate how generic business issues (labour/workplace conditions; supply networks; taxes) can be transformed to gain advantage when managed systemically and systematically. Former CSR director of Unilever Indonesia as a class speaker helped make these ideas come alive, too.

    Also use Mahon (1989) and other issues management articles (e.g., Mahon & Wartick) alongside Porter & Kramer to build out the idea of an issue not being solely a 'social' issue but every business issues having socio-political-economic-legal management challenges/opportunities.

    Best,
    Jenn

    Jennifer J. Griffin
    Associate Professor, Strategic Management and Public Policy
    Director, Institute for Corporate Responsibility -- Global Stakeholder Strategies Program
    The George Washington University
    School of Business
    2201 G Street, NW Funger 615
    Washington, DC 20052
    202.994.2536 phone
    202.994.8113 fax


    ----- Original Message -----
    From: "Elm, Dawn R." <DRELM@stthomas.edu>
    Date: Saturday, February 7, 2009 2:51 pm
    Subject: Re: [SIM] Alternative to Friedman
    To: SIM@AOMLISTS.PACE.EDU


    > Linda,
    > I've used Charles Handy's "What's a Business For" with good success.
    > Dawn
    > ________________________________
    > From: Social Issues in Management Listserv [SIM@AOMLISTS.PACE.EDU] On
    > Behalf Of James Weber [weber719@COMCAST.NET]
    > Sent: Friday, February 06, 2009 12:41 PM
    > To: SIM@AOMLISTS.PACE.EDU
    > Subject: Re: [SIM] Alternative to Friedman
    >
    > Linda – Good question, that many of us struggle with.
    >
    > I have had good success over the years using the Frank Abrams’ HBR
    > piece = Abrams, F. W. (1951). Management’s responsibilities in a
    > complex world. Harvard Business Review, 29(3), 29-34. This is
    > particularly enjoyable when, after blocking out the date and author’s
    > bio, I ask them who Frank Abrams is (senior executive at Standard Oil
    > of New Jersey, not ExxonMobil) and when he wrote the article (1951!).
    > The MBAs often guess – some business ethics professor and he wrote it
    > in the 1990s!
    >
    > I, too, have used Porter and Kramer’s (can’t forget the lesser-known
    > co-author) HBR piece, although Abrams seem to address Friedman more
    > directly given the similar time of his writing.
    >
    > Good luck!
    >
    > Jim Weber, Ph.D.
    > Professor of Business Ethics and Management
    > Senior Fellow, Beard Center for Leadership in Ethics
    > Rockwell Hall 813, Duquesne University
    > 600 Forbes Ave., Pittsburgh, PA 15282
    > office: 412-396-5475
    > fax: 412-396-4764
    > www.business.duq.edu/Beard
    >
    > From: Social Issues in Management Listserv [ On Behalf Of Linda Trevino
    > Sent: Friday, February 06, 2009 12:05 PM
    > To: SIM@AOMLISTS.PACE.EDU
    > Subject: [SIM] Alternative to Friedman
    >
    > Hi all,
    > Two questions:
    >
    >
    > 1. Can anyone recommend a concise, well-written article
    > (appropriate for MBAs) that is a response to Milton Friedman’s classic
    > piece on social responsibility?
    >
    > 2. I’m thinking of assigning Porter’s HBR article on CSR and
    > Strategy. Does anyone have a favorite case that would be a good
    > accompaniment to that reading?
    > Thanks!
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at: _______________________________________________________________________
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at: _______________________________________________________________________
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at:
    > _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at:
    > _______________________________________________________________________

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  • 12.  Alternative to Friedman

    Posted 02-08-2009 12:18
    Dear friends and colleagues,

    Linda’s request and the ensuing discussion have sparked reflection. It’s on the long side for e-mail, and my apologies for that, but here goes.

    As a young SIM scholar in the early 1980s, I could not understand why my new field paid so much frenzied attention to some economist’s op-ed piece in the New York Times Magazine. I could not understand why the week-long ‘business & society’ training sessions for new scholars included so many talks by business lobbyists and the U.S. Chamber of Commerce. I could not understand why the emphasis shifted from social responsibility to social responsiveness and “how businesses can win in Washington,” or why I should have to take seriously the blatantly political work of Murray Weidenbaum, Sam Peltzman, and others on “the costs and benefits of regulation” – which really meant the COSTS of regulation.

    In one of my earliest and most obscure publications, I tracked down the source of the 1980s common wisdom that it takes 12 years and $200 million to get a new drug to market. The source was a University of Rochester working paper by an economics doctoral student from U. Chicago. He surveyed a few big drug companies, explained his ‘costs and benefits’ project to them, and asked them to provide R&D info on ANY TEN of their hundreds of new drug prospects. There was no accounting for missing data or outright fabrication; there was no attempt to assess the representativeness of the information each company submitted; and there were glaring logical errors in his reasoning. Nevertheless, his conclusion (12 years, $200 million) was fed into the press and soon came to be quoted by everyone concerned about deregulation AND consumer health and well-being!

    Many years later, I now understand the concentrated effort that the Chicago economists made over decades to transform the U.S. society and economy into one that would generate massive wealth for some, with benefits perhaps ‘trickling down’ to others, but if not, no matter! I also now understand that Friedman’s little op-ed piece derived from his libertarian political philosophy as cleanly expounded in his 1962 book, Capitalism and Freedom. And finally, I see that this is simply one story among the many that are told about what corporations are and why they exist, and that this is indeed a story that benefits a few at the expense of most.

    So, I have simply stopped arguing against Friedman’s op-ed pronouncements in the usual “stockholder vs. stakeholder” manner. I don’t discount this as a viable teaching method; I just find it personally very tiresome. Instead, I present Friedman’s libertarian/egoistic position embedded in the context of modern finance theory and its limitations as an ethical worldview. Egoism is perhaps a baseline for human ethics, but it seems to me to be far too thin and shallow to serve as the endpoint, and I find that most students agree, although some do have that youthful fascination with the weird posturings of Ayn Rand and others of extreme libertarian bent.

    I also note that Friedman is more than a bit disingenuous when he says that obeying the law is all a socially responsible corporation needs to do, because he fails to acknowledge – although he certainly knew – the extent to which the law is shaped by corporate interests. Our field and that of political science have generated quite a lot of knowledge about how this happens.

    I know – he also argues for obeying ethical custom; but this, of course, sounds like ethical relativism. This too is disingenuous, for I’ve never found a libertarian who is also a true ethical relativist; there’s always something up with which they will not put, as it were.

    Finally, Friedman’s famous CSR quotes are not even about stakeholder interests, as the SIM field defines social responsibility. He’s talking specifically about charitable giving, and he makes a good point. I haven’t yet found any foolproof justification for demanding philanthropy from corporations.

    In the mid-80s, after my first book on the 1906 Pure Food Law was out, I was invited to a small gathering of public choice economists at George Mason University – another Chicago School outpost. I think they liked my uncovering of business self-interests in what has been seen historically as a consumer protection law. Be that as it may, James Buchanan was a keynote speaker, and he was arguing then for a Constitutional amendment to guarantee the right of free exchange. Naïve young thing that I was, I asked, “What about water, nuclear weapons, nerve gas, human organs, babies?” Gordon Tulloch patted me on the head; the great man himself stammered, “Well, uh, there might, uh...” and immediately turned away to take another question. Needless to say, I wasn't invited back.

    I just don’t have a lot of patience for this ethically flimsy, data-twisting, rich man’s view any more. I’m tired of spinning wheels arguing with a dead economist. I’m tired of always being cast in the ‘against’ position. So, if a student says, “We learned that corporations exist to maximize stockholder wealth,” I’ll just say, “Sure, that is one view, and it has been popular for a while. Understanding what a corporation is and should do from the standpoint of particular business courses is like the blind men trying to grasp 'elephant' by touching various parts. Let me offer you a few more views, and then we can try to figure out the circumstances under which each view might be relevant, and who benefits. It’s a whole new world, you know.”

    Best wishes to all,
    Donna

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

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    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1


  • 13.  Alternative to Friedman

    Posted 02-08-2009 23:07
    The OxFam/Unilever report that Jennifer referenced can be accessed off of this page: http://publications.oxfam.org.uk/oxfam/display.asp?isbn=0855985666. The online access is free (while the hard copy can be purchased). The direct link is here: http://www.oxfam.org.uk/what_we_do/issues/livelihoods/downloads/unilever.pdf but you might have an info page beforehand.

    Kind regards,
    Laura


    Prof. Laura P. Hartman
    Professor of Business Ethics, Dept. of Management
    DePaul University
    1 E. Jackson Blvd., ste. 7000
    Chicago, IL 60604
    Ph: 312/362-6569, Fax: 312/362-6973
    Mobile: 312/493-9929 
     Please consider the impact on the environment before printing this email message.


    -----Original Message-----
    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Jennifer Griffin
    Sent: Sunday, February 08, 2009 9:38 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Hi, Linda;

    Re: Friedman, ditto Lori's comment on the Reason Magazine discussion between Friedman and MacKey. And, ditto Simone's comment on HB Fuller. Good cases!

    To build out Porter & Kramer (2006) the Oxfam/Unilever Indonesia (2005) report (principal author Jason Clay) helps illustrate how generic business issues (labour/workplace conditions; supply networks; taxes) can be transformed to gain advantage when managed systemically and systematically. Former CSR director of Unilever Indonesia as a class speaker helped make these ideas come alive, too.

    Also use Mahon (1989) and other issues management articles (e.g., Mahon & Wartick) alongside Porter & Kramer to build out the idea of an issue not being solely a 'social' issue but every business issues having socio-political-economic-legal management challenges/opportunities.

    Best,
    Jenn

    Jennifer J. Griffin
    Associate Professor, Strategic Management and Public Policy
    Director, Institute for Corporate Responsibility -- Global Stakeholder Strategies Program
    The George Washington University
    School of Business
    2201 G Street, NW Funger 615
    Washington, DC 20052
    202.994.2536 phone
    202.994.8113 fax


    ----- Original Message -----
    From: "Elm, Dawn R." <DRELM@stthomas.edu>
    Date: Saturday, February 7, 2009 2:51 pm
    Subject: Re: [SIM] Alternative to Friedman
    To: SIM@AOMLISTS.PACE.EDU


    > Linda,
    > I've used Charles Handy's "What's a Business For" with good success.
    > Dawn
    > ________________________________
    > From: Social Issues in Management Listserv [SIM@AOMLISTS.PACE.EDU] On
    > Behalf Of James Weber [weber719@COMCAST.NET]
    > Sent: Friday, February 06, 2009 12:41 PM
    > To: SIM@AOMLISTS.PACE.EDU
    > Subject: Re: [SIM] Alternative to Friedman
    >
    > Linda – Good question, that many of us struggle with.
    >
    > I have had good success over the years using the Frank Abrams’ HBR
    > piece = Abrams, F. W. (1951). Management’s responsibilities in a
    > complex world. Harvard Business Review, 29(3), 29-34. This is
    > particularly enjoyable when, after blocking out the date and author’s
    > bio, I ask them who Frank Abrams is (senior executive at Standard Oil
    > of New Jersey, not ExxonMobil) and when he wrote the article (1951!).
    > The MBAs often guess – some business ethics professor and he wrote it
    > in the 1990s!
    >
    > I, too, have used Porter and Kramer’s (can’t forget the lesser-known
    > co-author) HBR piece, although Abrams seem to address Friedman more
    > directly given the similar time of his writing.
    >
    > Good luck!
    >
    > Jim Weber, Ph.D.
    > Professor of Business Ethics and Management
    > Senior Fellow, Beard Center for Leadership in Ethics
    > Rockwell Hall 813, Duquesne University
    > 600 Forbes Ave., Pittsburgh, PA 15282
    > office: 412-396-5475
    > fax: 412-396-4764
    > www.business.duq.edu/Beard
    >
    > From: Social Issues in Management Listserv [ On Behalf Of Linda Trevino
    > Sent: Friday, February 06, 2009 12:05 PM
    > To: SIM@AOMLISTS.PACE.EDU
    > Subject: [SIM] Alternative to Friedman
    >
    > Hi all,
    > Two questions:
    >
    >
    > 1. Can anyone recommend a concise, well-written article
    > (appropriate for MBAs) that is a response to Milton Friedman’s classic
    > piece on social responsibility?
    >
    > 2. I’m thinking of assigning Porter’s HBR article on CSR and
    > Strategy. Does anyone have a favorite case that would be a good
    > accompaniment to that reading?
    > Thanks!
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at: _______________________________________________________________________
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at: _______________________________________________________________________
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at:
    > _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at:
    > _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

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    _______________________________________________________________________

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  • 14.  Alternative to Friedman

    Posted 02-09-2009 10:57
    Dear friends and Colleagues

    Thank you Donna. I apologize for my earlier memo talking about the exchange between Friedman and Paul Samuelson in the AER in the late fifties or early sixties. I left out Samuelson's name. My point is that Friedman argued that assumptions do not count and Samuelson argues that they do. Friedman probably had some sort of definition or set of assumptions about the nature of the human person, but they did not count. I will never forget the first time I heard him speak in 1961 as an guest lecturer at Indiana U. I was overwhelmed by his logic, but them as I trudged back to my room I started to think through his assumptions and I got mad at myself for being taken in by impeccable logic from the assumptions forward, despite the total nonsense assumptions being used. As to the op-ed piece causing such a frenzy, this is part of our blindness as academics. I am always amazed by the number of articles from the HBR referenced in the various strategy textbooks I review and use, because the day before I will have seen a ranking of journals in strategy that has HBR well down the list. I do not deny the importance of the most respected of our academic journals, or of their role. But are we blinded by our focus on them from realizing the importance of other work and its impact?

    Tom

    Dr. Thomas A. Bausch, Professor
    Department of Management
    College of Business Administration
    Marquette University 1881
    Milwaukee WI 53201 1881
    Tel:     414 288 1657
    Home: 414 771 2533
    Fax:    414 288 5765
    Cell: 414 690 9498
    E-mail: thomas.bausch@marquette.edu
    Home:  bernieb@milwpc.com

    "If one has private ends to serve,
    one will never be able to win the world." (Tao Te Ching, No. 48)


    -----Original Message-----
    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Donna Wood
    Sent: Sunday, February 08, 2009 11:18 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Dear friends and colleagues,

    Linda's request and the ensuing discussion have sparked reflection. It's on the long side for e-mail, and my apologies for that, but here goes.

    As a young SIM scholar in the early 1980s, I could not understand why my new field paid so much frenzied attention to some economist's op-ed piece in the New York Times Magazine. I could not understand why the week-long 'business & society' training sessions for new scholars included so many talks by business lobbyists and the U.S. Chamber of Commerce. I could not understand why the emphasis shifted from social responsibility to social responsiveness and "how businesses can win in Washington," or why I should have to take seriously the blatantly political work of Murray Weidenbaum, Sam Peltzman, and others on "the costs and benefits of regulation" - which really meant the COSTS of regulation.

    In one of my earliest and most obscure publications, I tracked down the source of the 1980s common wisdom that it takes 12 years and $200 million to get a new drug to market. The source was a University of Rochester working paper by an economics doctoral student from U. Chicago. He surveyed a few big drug companies, explained his 'costs and benefits' project to them, and asked them to provide R&D info on ANY TEN of their hundreds of new drug prospects. There was no accounting for missing data or outright fabrication; there was no attempt to assess the representativeness of the information each company submitted; and there were glaring logical errors in his reasoning. Nevertheless, his conclusion (12 years, $200 million) was fed into the press and soon came to be quoted by everyone concerned about deregulation AND consumer health and well-being!

    Many years later, I now understand the concentrated effort that the Chicago economists made over decades to transform the U.S. society and economy into one that would generate massive wealth for some, with benefits perhaps 'trickling down' to others, but if not, no matter! I also now understand that Friedman's little op-ed piece derived from his libertarian political philosophy as cleanly expounded in his 1962 book, Capitalism and Freedom. And finally, I see that this is simply one story among the many that are told about what corporations are and why they exist, and that this is indeed a story that benefits a few at the expense of most.

    So, I have simply stopped arguing against Friedman's op-ed pronouncements in the usual "stockholder vs. stakeholder" manner. I don't discount this as a viable teaching method; I just find it personally very tiresome. Instead, I present Friedman's libertarian/egoistic position embedded in the context of modern finance theory and its limitations as an ethical worldview. Egoism is perhaps a baseline for human ethics, but it seems to me to be far too thin and shallow to serve as the endpoint, and I find that most students agree, although some do have that youthful fascination with the weird posturings of Ayn Rand and others of extreme libertarian bent.

    I also note that Friedman is more than a bit disingenuous when he says that obeying the law is all a socially responsible corporation needs to do, because he fails to acknowledge - although he certainly knew - the extent to which the law is shaped by corporate interests. Our field and that of political science have generated quite a lot of knowledge about how this happens.

    I know - he also argues for obeying ethical custom; but this, of course, sounds like ethical relativism. This too is disingenuous, for I've never found a libertarian who is also a true ethical relativist; there's always something up with which they will not put, as it were.

    Finally, Friedman's famous CSR quotes are not even about stakeholder interests, as the SIM field defines social responsibility. He's talking specifically about charitable giving, and he makes a good point. I haven't yet found any foolproof justification for demanding philanthropy from corporations.

    In the mid-80s, after my first book on the 1906 Pure Food Law was out, I was invited to a small gathering of public choice economists at George Mason University - another Chicago School outpost. I think they liked my uncovering of business self-interests in what has been seen historically as a consumer protection law. Be that as it may, James Buchanan was a keynote speaker, and he was arguing then for a Constitutional amendment to guarantee the right of free exchange. Naïve young thing that I was, I asked, "What about water, nuclear weapons, nerve gas, human organs, babies?" Gordon Tulloch patted me on the head; the great man himself stammered, "Well, uh, there might, uh..." and immediately turned away to take another question. Needless to say, I wasn't invited back.

    I just don't have a lot of patience for this ethically flimsy, data-twisting, rich man's view any more. I'm tired of spinning wheels arguing with a dead economist. I'm tired of always being cast in the 'against' position. So, if a student says, "We learned that corporations exist to maximize stockholder wealth," I'll just say, "Sure, that is one view, and it has been popular for a while. Understanding what a corporation is and should do from the standpoint of particular business courses is like the blind men trying to grasp 'elephant' by touching various parts. Let me offer you a few more views, and then we can try to figure out the circumstances under which each view might be relevant, and who benefits. It's a whole new world, you know."

    Best wishes to all,
    Donna

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1
    _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

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    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1


  • 15.  Alternative to Friedman

    Posted 02-10-2009 10:52
    Dear Donna and all,

    Thanks so much for the insightful reflection. I'm going to forward it around my college.

    It's nice to be reminded so elegantly that SIM is not inherently an advocacy group and that honest reflection is not an alternative viewpoint, a position taken against another side. Social scientists need to take an agnostic approach and see what shakes out. If findings happen to run counter to established interests, that doesn't mean they are politically motivated. It need not be an either-or world where each pre-designated side determines to use the trappings of "research", the media, etc. to obtain dominance. Rather, as you well put it: "we can try to figure out the circumstances under which each view might be relevant, and who benefits."

    We had a debate along these lines in the Sept. 2003 issue of Organization & Environment. Jon Entine wrote a piece accusing SIM researchers of pursuing an agenda, and Sondra Waddock and Rob Salomon & I countered. You can find the piece Rob Salomon and I wrote here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070

    Your e-mail also brings to mind a larger problem with social science research in general. I just took a trip that involved lengthy plane rides, and so I used the time to reread a recent book by Bill Starbuck. It's titled, "The production of knowledge: The challenge of social science research." I encourage everyone to read it. Bill specifies how the nature of social science research, to include personal agendas but also problems in statistics and data gathering, can limit the accumulation of knowledge. He recommends ways to limit these problems. You can read more about the book here:

    http://www.oup.com/us/catalog/general/subject/Business/Management/?view=usa&ci=9780199288533


    Best,
    Mike

    ***********************
    Michael L. Barnett, PhD
    University of South Florida
    College of Business Administration
    Department of Management & Organization
    4202 E. Fowler Avenue, BSN 3213
    Tampa, FL 33620-5500
    Phone: 813-974-1727
    Fax: 813-974-1734
    E-mail: mbarnett@coba.usf.edu
    Webpage: http://www.coba.usf.edu/barnett

    View my research on my SSRN Author page:
    <http://ssrn.com/author=414796>
    **************************************************
    -----Original Message-----
    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Donna Wood
    Sent: Sunday, February 08, 2009 12:18 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Dear friends and colleagues,

    Linda's request and the ensuing discussion have sparked reflection. It's on the long side for e-mail, and my apologies for that, but here goes.

    As a young SIM scholar in the early 1980s, I could not understand why my new field paid so much frenzied attention to some economist's op-ed piece in the New York Times Magazine. I could not understand why the week-long 'business & society' training sessions for new scholars included so many talks by business lobbyists and the U.S. Chamber of Commerce. I could not understand why the emphasis shifted from social responsibility to social responsiveness and "how businesses can win in Washington," or why I should have to take seriously the blatantly political work of Murray Weidenbaum, Sam Peltzman, and others on "the costs and benefits of regulation" - which really meant the COSTS of regulation.

    In one of my earliest and most obscure publications, I tracked down the source of the 1980s common wisdom that it takes 12 years and $200 million to get a new drug to market. The source was a University of Rochester working paper by an economics doctoral student from U. Chicago. He surveyed a few big drug companies, explained his 'costs and benefits' project to them, and asked them to provide R&D info on ANY TEN of their hundreds of new drug prospects. There was no accounting for missing data or outright fabrication; there was no attempt to assess the representativeness of the information each company submitted; and there were glaring logical errors in his reasoning. Nevertheless, his conclusion (12 years, $200 million) was fed into the press and soon came to be quoted by everyone concerned about deregulation AND consumer health and well-being!

    Many years later, I now understand the concentrated effort that the Chicago economists made over decades to transform the U.S. society and economy into one that would generate massive wealth for some, with benefits perhaps 'trickling down' to others, but if not, no matter! I also now understand that Friedman's little op-ed piece derived from his libertarian political philosophy as cleanly expounded in his 1962 book, Capitalism and Freedom. And finally, I see that this is simply one story among the many that are told about what corporations are and why they exist, and that this is indeed a story that benefits a few at the expense of most.

    So, I have simply stopped arguing against Friedman's op-ed pronouncements in the usual "stockholder vs. stakeholder" manner. I don't discount this as a viable teaching method; I just find it personally very tiresome. Instead, I present Friedman's libertarian/egoistic position embedded in the context of modern finance theory and its limitations as an ethical worldview. Egoism is perhaps a baseline for human ethics, but it seems to me to be far too thin and shallow to serve as the endpoint, and I find that most students agree, although some do have that youthful fascination with the weird posturings of Ayn Rand and others of extreme libertarian bent.

    I also note that Friedman is more than a bit disingenuous when he says that obeying the law is all a socially responsible corporation needs to do, because he fails to acknowledge - although he certainly knew - the extent to which the law is shaped by corporate interests. Our field and that of political science have generated quite a lot of knowledge about how this happens.

    I know - he also argues for obeying ethical custom; but this, of course, sounds like ethical relativism. This too is disingenuous, for I've never found a libertarian who is also a true ethical relativist; there's always something up with which they will not put, as it were.

    Finally, Friedman's famous CSR quotes are not even about stakeholder interests, as the SIM field defines social responsibility. He's talking specifically about charitable giving, and he makes a good point. I haven't yet found any foolproof justification for demanding philanthropy from corporations.

    In the mid-80s, after my first book on the 1906 Pure Food Law was out, I was invited to a small gathering of public choice economists at George Mason University - another Chicago School outpost. I think they liked my uncovering of business self-interests in what has been seen historically as a consumer protection law. Be that as it may, James Buchanan was a keynote speaker, and he was arguing then for a Constitutional amendment to guarantee the right of free exchange. Naïve young thing that I was, I asked, "What about water, nuclear weapons, nerve gas, human organs, babies?" Gordon Tulloch patted me on the head; the great man himself stammered, "Well, uh, there might, uh..." and immediately turned away to take another question. Needless to say, I wasn't invited back.

    I just don't have a lot of patience for this ethically flimsy, data-twisting, rich man's view any more. I'm tired of spinning wheels arguing with a dead economist. I'm tired of always being cast in the 'against' position. So, if a student says, "We learned that corporations exist to maximize stockholder wealth," I'll just say, "Sure, that is one view, and it has been popular for a while. Understanding what a corporation is and should do from the standpoint of particular business courses is like the blind men trying to grasp 'elephant' by touching various parts. Let me offer you a few more views, and then we can try to figure out the circumstances under which each view might be relevant, and who benefits. It's a whole new world, you know."

    Best wishes to all,
    Donna

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1
    _______________________________________________________________________

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org
    _______________________________________________________________________

    If you wish to unsubscribe from this list or change your delivery
    options, you can do so online at: http://aomlists.pace.edu/scripts/wa.exe?SUBED1=sim&A=1


  • 16.  Alternative to Friedman

    Posted 02-10-2009 12:15
    I want to thank everyone who replied. I have quite the list and will need to spend time reading and deciding!
    Lots of helpful and thoughtful responses. Thanks again!

    Linda K. Trevino
    Distinguished Professor of Organizational Behavior and Ethics
    Smeal College of Business
    402 Business Building
    Smeal College of Business
    The Pennsylvania State University
    University Park, PA 16802
    Phone: 814-865-2194 Fax: 814-863-7261
    Email: ltrevino@psu.edu
    ________________________________________
    From: Social Issues in Management Listserv [SIM@AOMLISTS.PACE.EDU] On Behalf Of Barnett, Michael [mbarnett@coba.usf.edu]
    Sent: Tuesday, February 10, 2009 10:51 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Dear Donna and all,

    Thanks so much for the insightful reflection. I'm going to forward it around my college.

    It's nice to be reminded so elegantly that SIM is not inherently an advocacy group and that honest reflection is not an alternative viewpoint, a position taken against another side. Social scientists need to take an agnostic approach and see what shakes out. If findings happen to run counter to established interests, that doesn't mean they are politically motivated. It need not be an either-or world where each pre-designated side determines to use the trappings of "research", the media, etc. to obtain dominance. Rather, as you well put it: "we can try to figure out the circumstances under which each view might be relevant, and who benefits."

    We had a debate along these lines in the Sept. 2003 issue of Organization & Environment. Jon Entine wrote a piece accusing SIM researchers of pursuing an agenda, and Sondra Waddock and Rob Salomon & I countered. You can find the piece Rob Salomon and I wrote here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070

    Your e-mail also brings to mind a larger problem with social science research in general. I just took a trip that involved lengthy plane rides, and so I used the time to reread a recent book by Bill Starbuck. It's titled, "The production of knowledge: The challenge of social science research." I encourage everyone to read it. Bill specifies how the nature of social science research, to include personal agendas but also problems in statistics and data gathering, can limit the accumulation of knowledge. He recommends ways to limit these problems. You can read more about the book here:

    http://www.oup.com/us/catalog/general/subject/Business/Management/?view=usa&ci=9780199288533


    Best,
    Mike

    ***********************
    Michael L. Barnett, PhD
    University of South Florida
    College of Business Administration
    Department of Management & Organization
    4202 E. Fowler Avenue, BSN 3213
    Tampa, FL 33620-5500
    Phone: 813-974-1727
    Fax: 813-974-1734
    E-mail: mbarnett@coba.usf.edu
    Webpage: http://www.coba.usf.edu/barnett

    View my research on my SSRN Author page:
    <http://ssrn.com/author=414796>
    **************************************************
    -----Original Message-----
    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Donna Wood
    Sent: Sunday, February 08, 2009 12:18 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Dear friends and colleagues,

    Linda's request and the ensuing discussion have sparked reflection. It's on the long side for e-mail, and my apologies for that, but here goes.

    As a young SIM scholar in the early 1980s, I could not understand why my new field paid so much frenzied attention to some economist's op-ed piece in the New York Times Magazine. I could not understand why the week-long 'business & society' training sessions for new scholars included so many talks by business lobbyists and the U.S. Chamber of Commerce. I could not understand why the emphasis shifted from social responsibility to social responsiveness and "how businesses can win in Washington," or why I should have to take seriously the blatantly political work of Murray Weidenbaum, Sam Peltzman, and others on "the costs and benefits of regulation" - which really meant the COSTS of regulation.

    In one of my earliest and most obscure publications, I tracked down the source of the 1980s common wisdom that it takes 12 years and $200 million to get a new drug to market. The source was a University of Rochester working paper by an economics doctoral student from U. Chicago. He surveyed a few big drug companies, explained his 'costs and benefits' project to them, and asked them to provide R&D info on ANY TEN of their hundreds of new drug prospects. There was no accounting for missing data or outright fabrication; there was no attempt to assess the representativeness of the information each company submitted; and there were glaring logical errors in his reasoning. Nevertheless, his conclusion (12 years, $200 million) was fed into the press and soon came to be quoted by everyone concerned about deregulation AND consumer health and well-being!

    Many years later, I now understand the concentrated effort that the Chicago economists made over decades to transform the U.S. society and economy into one that would generate massive wealth for some, with benefits perhaps 'trickling down' to others, but if not, no matter! I also now understand that Friedman's little op-ed piece derived from his libertarian political philosophy as cleanly expounded in his 1962 book, Capitalism and Freedom. And finally, I see that this is simply one story among the many that are told about what corporations are and why they exist, and that this is indeed a story that benefits a few at the expense of most.

    So, I have simply stopped arguing against Friedman's op-ed pronouncements in the usual "stockholder vs. stakeholder" manner. I don't discount this as a viable teaching method; I just find it personally very tiresome. Instead, I present Friedman's libertarian/egoistic position embedded in the context of modern finance theory and its limitations as an ethical worldview. Egoism is perhaps a baseline for human ethics, but it seems to me to be far too thin and shallow to serve as the endpoint, and I find that most students agree, although some do have that youthful fascination with the weird posturings of Ayn Rand and others of extreme libertarian bent.

    I also note that Friedman is more than a bit disingenuous when he says that obeying the law is all a socially responsible corporation needs to do, because he fails to acknowledge - although he certainly knew - the extent to which the law is shaped by corporate interests. Our field and that of political science have generated quite a lot of knowledge about how this happens.

    I know - he also argues for obeying ethical custom; but this, of course, sounds like ethical relativism. This too is disingenuous, for I've never found a libertarian who is also a true ethical relativist; there's always something up with which they will not put, as it were.

    Finally, Friedman's famous CSR quotes are not even about stakeholder interests, as the SIM field defines social responsibility. He's talking specifically about charitable giving, and he makes a good point. I haven't yet found any foolproof justification for demanding philanthropy from corporations.

    In the mid-80s, after my first book on the 1906 Pure Food Law was out, I was invited to a small gathering of public choice economists at George Mason University - another Chicago School outpost. I think they liked my uncovering of business self-interests in what has been seen historically as a consumer protection law. Be that as it may, James Buchanan was a keynote speaker, and he was arguing then for a Constitutional amendment to guarantee the right of free exchange. Naïve young thing that I was, I asked, "What about water, nuclear weapons, nerve gas, human organs, babies?" Gordon Tulloch patted me on the head; the great man himself stammered, "Well, uh, there might, uh..." and immediately turned away to take another question. Needless to say, I wasn't invited back.

    I just don't have a lot of patience for this ethically flimsy, data-twisting, rich man's view any more. I'm tired of spinning wheels arguing with a dead economist. I'm tired of always being cast in the 'against' position. So, if a student says, "We learned that corporations exist to maximize stockholder wealth," I'll just say, "Sure, that is one view, and it has been popular for a while. Understanding what a corporation is and should do from the standpoint of particular business courses is like the blind men trying to grasp 'elephant' by touching various parts. Let me offer you a few more views, and then we can try to figure out the circumstances under which each view might be relevant, and who benefits. It's a whole new world, you know."

    Best wishes to all,
    Donna

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  • 17.  Alternative to Friedman

    Posted 02-10-2009 14:25
    This has been an interesting exchange. I have adopted a more entertainment-oriented approach. I assign a youtube interview of Friedman from around the time his oft-cited article came out(http://www.youtube.com/watch?v=JfdRpyfEmBE), then clips from Krugman and Stiglitz.

    ----- Original Message -----
    From: "Laura Hartman" <LHARTMAN@depaul.edu>
    To: "karen paul" <karen.paul@business.fiu.edu>
    Sent: Sunday, February 8, 2009 11:07:46 PM (GMT-0500) America/New_York
    Subject: Re: [SIM] Alternative to Friedman

    The OxFam/Unilever report that Jennifer referenced can be accessed off of this page: http://publications.oxfam.org.uk/oxfam/display.asp?isbn=0855985666. The online access is free (while the hard copy can be purchased). The direct link is here: http://www.oxfam.org.uk/what_we_do/issues/livelihoods/downloads/unilever.pdf but you might have an info page beforehand.

    Kind regards,
    Laura


    Prof. Laura P. Hartman
    Professor of Business Ethics, Dept. of Management
    DePaul University
    1 E. Jackson Blvd., ste. 7000
    Chicago, IL 60604
    Ph: 312/362-6569, Fax: 312/362-6973
    Mobile: 312/493-9929
     Please consider the impact on the environment before printing this email message.


    -----Original Message-----
    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Jennifer Griffin
    Sent: Sunday, February 08, 2009 9:38 AM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

    Hi, Linda;

    Re: Friedman, ditto Lori's comment on the Reason Magazine discussion between Friedman and MacKey. And, ditto Simone's comment on HB Fuller. Good cases!

    To build out Porter & Kramer (2006) the Oxfam/Unilever Indonesia (2005) report (principal author Jason Clay) helps illustrate how generic business issues (labour/workplace conditions; supply networks; taxes) can be transformed to gain advantage when managed systemically and systematically. Former CSR director of Unilever Indonesia as a class speaker helped make these ideas come alive, too.

    Also use Mahon (1989) and other issues management articles (e.g., Mahon & Wartick) alongside Porter & Kramer to build out the idea of an issue not being solely a 'social' issue but every business issues having socio-political-economic-legal management challenges/opportunities.

    Best,
    Jenn

    Jennifer J. Griffin
    Associate Professor, Strategic Management and Public Policy
    Director, Institute for Corporate Responsibility -- Global Stakeholder Strategies Program
    The George Washington University
    School of Business
    2201 G Street, NW Funger 615
    Washington, DC 20052
    202.994.2536 phone
    202.994.8113 fax


    ----- Original Message -----
    From: "Elm, Dawn R." <DRELM@stthomas.edu>
    Date: Saturday, February 7, 2009 2:51 pm
    Subject: Re: [SIM] Alternative to Friedman
    To: SIM@AOMLISTS.PACE.EDU


    > Linda,
    > I've used Charles Handy's "What's a Business For" with good success.
    > Dawn
    > ________________________________
    > From: Social Issues in Management Listserv [SIM@AOMLISTS.PACE.EDU] On
    > Behalf Of James Weber [weber719@COMCAST.NET]
    > Sent: Friday, February 06, 2009 12:41 PM
    > To: SIM@AOMLISTS.PACE.EDU
    > Subject: Re: [SIM] Alternative to Friedman
    >
    > Linda – Good question, that many of us struggle with.
    >
    > I have had good success over the years using the Frank Abrams’ HBR
    > piece = Abrams, F. W. (1951). Management’s responsibilities in a
    > complex world. Harvard Business Review, 29(3), 29-34. This is
    > particularly enjoyable when, after blocking out the date and author’s
    > bio, I ask them who Frank Abrams is (senior executive at Standard Oil
    > of New Jersey, not ExxonMobil) and when he wrote the article (1951!).
    > The MBAs often guess – some business ethics professor and he wrote it
    > in the 1990s!
    >
    > I, too, have used Porter and Kramer’s (can’t forget the lesser-known
    > co-author) HBR piece, although Abrams seem to address Friedman more
    > directly given the similar time of his writing.
    >
    > Good luck!
    >
    > Jim Weber, Ph.D.
    > Professor of Business Ethics and Management
    > Senior Fellow, Beard Center for Leadership in Ethics
    > Rockwell Hall 813, Duquesne University
    > 600 Forbes Ave., Pittsburgh, PA 15282
    > office: 412-396-5475
    > fax: 412-396-4764
    > www.business.duq.edu/Beard
    >
    > From: Social Issues in Management Listserv [ On Behalf Of Linda Trevino
    > Sent: Friday, February 06, 2009 12:05 PM
    > To: SIM@AOMLISTS.PACE.EDU
    > Subject: [SIM] Alternative to Friedman
    >
    > Hi all,
    > Two questions:
    >
    >
    > 1. Can anyone recommend a concise, well-written article
    > (appropriate for MBAs) that is a response to Milton Friedman’s classic
    > piece on social responsibility?
    >
    > 2. I’m thinking of assigning Porter’s HBR article on CSR and
    > Strategy. Does anyone have a favorite case that would be a good
    > accompaniment to that reading?
    > Thanks!
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: _______________________________________________________________________
    >
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    > options, you can do so online at: _______________________________________________________________________
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at: _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at: _______________________________________________________________________
    >
    > _______________________________________________________________________
    >
    > To send a message to the list, send your email to SIM@aomlists.pace.edu
    >
    > _______________________________________________________________________
    >
    > Visit the SIM Division website at:
    > _______________________________________________________________________
    >
    > If you wish to unsubscribe from this list or change your delivery
    > options, you can do so online at:
    > _______________________________________________________________________

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  • 18.  Alternative to Friedman

    Posted 02-10-2009 21:30

    Hello All:

     

    In our Social Entrepreneurship class, we compare/contrast Gates' comments in a Wall Street Journal article last year with Friedman's regarding social responsibility.  It makes for an interesting discussion.

     

    Bill Gates Issues Call For Kinder Capitalism; Famously Competitive, Billionaire Now Urges Business to Aid the Poor
    Robert A. Guth. Wall Street Journal (Eastern edition). New York, N.Y.: Jan 24, 2008. p. A.1

     

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

     

     

    A new video with Bill Gates discussing these ideas is also now available at:

    http://www.ted.com/talks/bill_gates_unplugged.html

     

    It's rather entertaining.

     

    Best regards,


    Franz Lohrke

    +++++++++++++++++++++++++++++++++++++++++++
    Franz T. Lohrke

    Chair, Department of Entrepreneurship, Management & Marketing

    2008-2009 Brock School of Business Advisory Board Research Fellow

    Brock School of Business

    Samford University

    800 Lakeshore Drive

    Birmingham, AL 35229

    Office: (205) 726-2373

    Fax:    (205) 726-2464

    http://www.samford.edu/~ftlohrke

    +++++++++++++++++++++++++++++++++++++++++++

     

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

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  • 19.  Alternative to Friedman

    Posted 02-12-2009 09:31

    Hi all-

     

    Fun conversation! 

     

    I'm a huge fan of Lynn Stout's "Bad and Not-So-Bad Arguments for Shareholder Primacy"  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=331464.

     

    Best quote: "Milton Friedman is a Nobel Prize-winning economist, but he obviously is not a lawyer.  A lawyer would know that the shareholders do not, in fact, own the corporation."

     

    (Lynn's a lawyer!)

     

    Rich

     

     

     

    --------------------

    Rich Leimsider

    Director, Center for Business Education

    Associate Director, Business and Society Program

    The Aspen Institute

    212.895.8010

    www.aspenbsp.org

    www.caseplace.org

    www.beyondgreypinstripes.org


    From: Social Issues in Management Listserv [mailto:SIM@AOMLISTS.PACE.EDU] On Behalf Of Lohrke, Franz T.
    Sent: Tuesday, February 10, 2009 9:30 PM
    To: SIM@AOMLISTS.PACE.EDU
    Subject: Re: [SIM] Alternative to Friedman

     

    Hello All:

     

    In our Social Entrepreneurship class, we compare/contrast Gates' comments in a Wall Street Journal article last year with Friedman's regarding social responsibility.  It makes for an interesting discussion.

     

    Bill Gates Issues Call For Kinder Capitalism; Famously Competitive, Billionaire Now Urges Business to Aid the Poor
    Robert A. Guth. Wall Street Journal (Eastern edition). New York, N.Y.: Jan 24, 2008. p. A.1

     

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

     

     

    A new video with Bill Gates discussing these ideas is also now available at:

    http://www.ted.com/talks/bill_gates_unplugged.html

     

    It's rather entertaining.

     

    Best regards,


    Franz Lohrke

    +++++++++++++++++++++++++++++++++++++++++++
    Franz T. Lohrke

    Chair, Department of Entrepreneurship, Management & Marketing

    2008-2009 Brock School of Business Advisory Board Research Fellow

    Brock School of Business

    Samford University

    800 Lakeshore Drive

    Birmingham, AL 35229

    Office: (205) 726-2373

    Fax:    (205) 726-2464

    http://www.samford.edu/~ftlohrke

    +++++++++++++++++++++++++++++++++++++++++++

     

    _______________________________________________________________________

    To send a message to the list, send your email to SIM@aomlists.pace.edu

    _______________________________________________________________________

    Visit the SIM Division website at: http://sim.aomonline.org _______________________________________________________________________

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