Today we will take a slight detour from the blog topics we traditionally write and explore some business philosophy. Hopefully the title captured your attention, so let me expand upon it by referencing what Milton Friedman once said about the social responsibility of business and which has lately been a highly debated topic.
“There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, it engages in open and free competition without deception or fraud.”
Some individuals would interpret this quote as: “Of course our main goal is to increase profits. That’s how we keep our shareholders are happy.” Others would say, “As a company, we belong to each other and have a moral obligation to work for the betterment of the society.” Even others would look at that quote and say, “That’s why the economy is in the shape it’s in – too much focus on profits and forgetting about the actual ethics of business.”
So what IS the role or social responsibility of business? Adam Smith is well known for his book, “Wealth Of Nations”, but there are people, and perhaps himself, who would point to “The Theory of Moral Sentiments” as his magnum opus. It is believed that he felt Moral Sentiments was inseparable from Wealth of Nations because it explained how individuals strive to be virtuous by dealing with each other in a moral and proper way. He argued that while individuals doing things for their own self-interest is in everyone’s DNA, humans also share the same emotions of gaining approval, affection, and acceptance from others by giving. Click HERE to read about Adam Smith’s Moral Sentiments and Wealth Of Nations.
That leads us back to Milton Friedman’s statement of what the social responsibility of business is.
So is greed good or should businesses be focusing their efforts for the collective good of society? It depends on how you describe the complex moral evolution concerning the concept of “greed” and also on how you define “collective good”. Is “greed” the Jordan Belfort type “greed” that was depicted on the big screen in “Wolf of Wall Street”? Or is it the “greed” of Ayn Rand’s “Atlas Shrugged” where she argued for “rational self-interest” which then improves society? Is the “collective good” when individuals sacrifice their own interests for the sake of others or is “collective good” the result of business and individuals improving the value they bring to the marketplace and, subsequently, improving society?
No two people will come up with the same answer to these questions. Maybe it’s a little bit of both or the “happy medium” as I’ve heard many people say. Do you know what you believe? Have you examined what the notion is for the social responsibility of the business you’re working for and then compare that with your personal views? Do they align or is there a philosophical conflict somewhere? Feel free to share your thoughts on this subject in the comment section below or share this blog on Twitter, Facebook or LinkedIn.