Reason Online Rethinking the Social Responsibility of Business

"Thirty-five years ago, Milton Friedman wrote a famous article for The New York Times Magazine whose title aptly summed up its main point: “The Social Responsibility of Business Is to Increase Its Profits.” The future Nobel laureate in economics had no patience for capitalists who claimed that “business is not concerned ‘merely’ with profit but also with promoting desirable ‘social’ ends; that business has a ‘social conscience’ and takes seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else may be the catchwords of the contemporary crop of re­formers.”"

"John Mackey, the founder and CEO of Whole Foods, is one businessman who disagrees with Friedman."

"In the debate that follows, Mackey lays out his personal vision of the social responsibility of business. Friedman responds, as does T.J. Rodgers, the founder and CEO of Cypress Semiconductor and the chief spokesman of what might be called the tough love school of laissez faire. Dubbed “one of America’s toughest bosses” by Fortune, Rodgers argues that corporations add far more to society by maximizing “long-term shareholder value” than they do by donating time and money to charity."

redux [07.02.04]
Denver Business Journal Business ethics likely to stay problem area

"New research to be unveiled at a forum hosted by the Denver-based Center for Corporate Change (CCC) points to a mixed conclusion: In the past year, corporate America's ethical behavior grew better -- and worse."

"Those findings, which led the researchers to give American business a "D" -- for "dismal" -- grade, were based on the investigation of seven core causes of corporate misconduct identified by the center: corporate valuation, board governance, leadership and corporate culture, compensation, competitive practices, accountancy and regulation."

redux [01.07.04]
Knowledge@Wharton Why Smart People Do Unethical Things: What's Behind Another Year of Corporate Scandals

"You might think that with the passing of another year, the scandals would be showing signs of petering out, but they are not."

"What was it that triggered such a deluge of questionable practices, ranging from the hefty compensation package given to Grasso to the brazen activities that brought down Enron and WorldCom? Why were so many people willing to look the other way at the longstanding practice of securities analysts touting stocks to help their investment banking colleagues obtain underwriting business? What could entice someone like Strong, a millionaire many times over, to make questionable securities trades that could jeopardize both his good name and the health of a company he founded and nurtured for nearly 30 years? Why would Stewart risk her considerable fortune and her company's brand name for $45,000, the amount she allegedly made through insider trading?"

redux [03.03.03]
The Christian Science Monitor The value of virtue

"When Gail Snowden talks about making profit off the "disadvantaged" in "poor neighborhoods," like Harlem in New York and Roxbury in Boston, not a single person in the classroom flinches."

"Her work is just one proof, she says, that corporations can make money by being socially responsible.

This reinforces the two-fold message of Prof. Michael Appell's new course, "Corporations and Communications": Not only do businesses have a responsibility to behave ethically, but virtue itself can pay."

redux [01.07.03]
USA Today Ethics and the entrepreneur

"All of this begs a question: What are the ethics of entrepreneurship? I had an interesting discussion recently about what private companies that lie, steal and cheat are doing. Are they cheating their investors? Robbing the company bank? Stealing from employees? Lying to customers and investors? Most likely not, but is that because of ethical standards? Put another way, do business ethics differ between private and public companies? Does it matter if you are an entrepreneur or a corporate CEO? Perhaps it does."

"A public company CEO has more leeway in that regard. With the resources of the organization a more considerable distance from one's self-interest, it is easier to embrace the dual slide in morals and ethics that has allowed for greed, "me first" and instant gratification."

The New York Times Boot Camps on Ethics Ask the 'What Ifs?'
[requires 'free' registration]

"Most corporations have long had codes of conduct and have publicized them in employee handbooks and elsewhere. But now, Mr. Seidman said, they are "looking to create ethical athletes out of their managers" who are capable of navigating the gray areas.

Sun is one of the first companies to plunge into the exercise in a big way, by requiring all managers across the globe -- not just those who head financial and legal departments -- to undergo intense training. At the company's boot camp, speakers included Scott McNealy, the chief executive, and other top managers and board members. But most of the content was presented in a small-group format; executives had to wrestle with dozens of case studies in which there were no right or wrong answers."

redux [12.18.02]
Wired Magazine Google vs. Evil

"Most major companies refer to a detailed code of corporate conduct when considering such policy decisions. General Electric devotes 15 pages on its Web site to an integrity policy. Nortel's site has 34 pages of guidelines. Google's code of conduct can be boiled down to a mere three words: Don't be evil.

Very Star Wars . But what does it mean?

" Evil, " says Google CEO Eric Schmidt, "is what Sergey says is evil.""

redux [11.22.02]
HBS Working Knowledge Where Morals and Profits Meet: The Corporate Value Shift

"Overall, though, my experience has been that probably half, and maybe even two-thirds, categorize ethics mainly as a risk management issue. These managers tend to see corporate values as a tool for preventing misconduct with its incident legal, financial, and reputational risks. Ethics gets their attention because they want to avoid the high-profile missteps and billion-dollar losses experienced by a Salomon Brothers, Bridgestone/Firestone, or Enron.

In recent years, however, I have seen more attention being paid to the positive side of ethics. More managers are waking up to the ways in which positive values contribute to a company's effective day-to-day functioning, as well as its reputation and long-term sustainability."

redux [09.20.02]
Fast Company The Secret Life of the CEO: Do they even know right from wrong?

"Perhaps we understand now. Or we're starting to. The corporate CEO is not the epic hero we once imagined. Now we know: He was never as smart or as right or as, well, together as we had hoped. His teeth aren't perfect either. But let's not go overboard: He's also not an epic sociopath. CEOs are only as culpable for all that has gone wrong with business in the past year as they were responsible for all that went right in the previous years. Which is to say that whatever they have done or failed to do doesn't explain everything. It doesn't even explain most things.

The truth behind the current episode of corporate comi-tragedy has plenty to do with the men ( and they are mostly men ) who are running the show -- but not in the way that we've always thought. All of our post-Enron hand-wringing about CEOs having values and "walking the talk" isn't wrong, exactly. It's just that it's not exactly right either. The truth is more shaded than that."

redux [08.06.02]
SiliconValley.Com As valley boomed, pressure blurred ethical boundaries

"Now it's Sunday morning across the nation, and CEOs are being hauled one after the other to the confessional. But the focus on rogue CEOs leaves out a wider picture: Many executives such as Rodek, who consider themselves honest, say they worked in the middle of tremendous pressure to stretch, if not break, the rules.

In an environment where some buffed the numbers, the price of doing the right thing was high and the payoff small. Companies that kept to the straight and narrow risked seeing their all-important share price doomed to mediocrity, making it harder to keep employees, raise money, compete with upstarts or even survive.

``It's not all greed,'' said Rodek, whose Sunnyvale company makes business software. ``Part of it is just competition. Business is a battle you either win or lose. There is no middle.''"

redux [07.09.02]
The Washington Post Sleaze and the Slump

"The WorldCom scandal is the latest building block in a new economic mythology. By the old mythology, the Internet and the "new economy" promised a rising stock market and anxiety-free prosperity. The new mythology holds that we've been mugged by corporate greed, which depresses stock prices and devastates "trust." In some ways, this is reassuring. It allows us to believe that purging dishonest executives and enacting the proper reforms will make things right. Unfortunately, it's also false."

"Morality tales are seductive. They express legitimate outrage. They're simple and understandable. It's right vs. wrong. Get rid of the bad guys, and the good guys can win."

"But the very simplicity of morality tales can be misleading."

redux [06.16.02]
SatireWire Remaining U.S. CEOs Make a Break For It

"Unwilling to wait for their eventual indictments, the 10,000 remaining CEOs of public U.S. companies made a break for it yesterday, heading for the Mexican border, plundering towns and villages along the way, and writing the entire rampage off as a marketing expense.

"They came into my home, made me pay for my own TV, then double-booked the revenues," said Rachel Sanchez of Las Cruces, just north of El Paso. "Right in front of my daughters.""