Position Statement on Friedman's Assertion
The statement by Milton Friedman that the "only responsibility for a manager is to the board of directors and the shareholders" is ridiculous, by most modern standards. Unless, of course, that statement, like so many pronouncements by Friedman, is meant as a challenging premise for debate (Friedman, 1970, 24). Assuming, however, that this senior economist has put aside his socialist days, his pro-Keynesian and his anti-Keynesian days, and actually believes in that statement, then the management student faces a myriad of philosophical problems.
For instance, it goes against almost all of the current management theory that suggests that the old ideas of command and control are outdated. As Humble suggests "With the demise of command and control, old-fashioned bureaucracies cease to be important. Therefore, it follows that people will be better informed: sharing rather than using information as a power tool will be the norm. Empowerment will not be an option, but a necessity in this world of rapid change, decentralization and flexibility" (Humble, 1995, 71).
These ideas of flexibility and empowerment suggest a way of corporate life that would be patently offensive to Friedman, if he indeed believes in that quote. However, since he has so often been on record as an avowed libertarian and an unwavering proponent of a free market economy, it is assumed that this statement is meant more to shock than to serve as a position statement.
Buried in that statement, however, is the conceit that operates in many American and Japanese corporations, those that think that the corporation has no other justification for existence than to make a profit. Does a manager of a corporation have any other responsibility besides fiscal enhancement? The social responsibility of business has received a great deal of attention in recent years. Of course, the image of the businessman as a greed...