Forum Post -The business of business is business Milton Friedman

The idea that there is no ethics in business is a controversial one that has been debated for years. One commonly cited argument is that the sole purpose of a business is to make a profit and that this goal takes precedence over all other considerations, including ethical concerns.

Proponents of this viewpoint often invoke the famous phrase coined by economist Milton Friedman in 1962: “The business of business is business” (Friedman, 1962). However, while it is true that businesses exist to generate profits, it is important to recognize that this does not mean ethical considerations must be disregarded (Kumar, 2020).

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Firstly, there are many situations in which ethical behaviour can contribute to a company’s success. A good example can be given of a company that has a reputation for treating its employees well is likely to be more attractive to potential job candidates, leading to a more talented workforce.

Similarly, companies known for their commitment to environmental sustainability may be viewed more favourably by consumers, who are increasingly conscious of the impact of their purchasing decisions (Sanford, 2011; Rudnicka, 2016).

Furthermore, many legal and regulatory frameworks require companies to behave ethically. It is expected that companies must comply with laws related to labour practices, consumer protection, and environmental protection. Violating these laws can result in significant financial penalties and damage a company’s reputation (Freeman, 2010).

Ethical considerations are important for creating a positive corporate culture. A company prioritizes ethical behaviour is likely to attract employees who share those values, leading to a more cohesive and motivated workforce. Prioritizing ethical behaviour can help create a positive corporate culture, leading to a more motivated and cohesive workforce (Mayer et al., 2009).

References

Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.

Friedman, M. (1962). Capitalism and freedom. University of Chicago Press.

Kumar, S. (2020). Business Ethics and Corporate Governance. Wiley.

Mayer, D., Kuenzi, M., & Greenberg, R. (2009). What is “ethical”?: Unpacking the meaning of a contested concept in organizational behaviour. Academy of Management Review, 34(1), 76-96.

Sanford, C. (2011). The responsible business: Reimagining sustainability and success. John Wiley & Sons. United States of America.