Business ethics: Between Friedman and Freeman? A response to A Puzzle about Business Ethics

Abstract

The biggest research programme within business ethics is arguably Corporate Social Responsibility and all its related streams (Corporate Citizenship, Social Justice, etc.) While there seems to be widespread agreement that business ethics is situated between the amoral or even immoral view of Milton Friedman as explicated in his 1970 New York Times paper, and the moral view expounded by R. Edward Freeman, this essay challenges that view. Friedman, maybe owed to his flamboyant writing style and crude and purely rhetorical oversimplifications has been misinterpreted to advocate for managers to be completely amoral maximisers of profitability. This misinterpretation has become common wisdom, despite him clearly stating that the law and the moral standards of surrounding society must limit profit‐seeking behaviour. Freeman's stakeholder theory, on the other hand, is seen as being on the other end of the continuum, arguing for selflessness—another misinterpretation, as I argue with Ed Freeman's help. Instead, I suggest that both Friedman and Freeman represent the virtuous mean of the business ethics continuum and not its extremes because they both base their theories on the idea of the free and socially embedded individual. The two vicious ends of the continuum are inhabited by the unreal, atomised, completely a‐social and selfish individual on the one end, and by the equally unreal collectivised self‐less individual on the other. The mainstream in business ethics has declared the collective and selfless end to be the ideal that must guide practice and research. The selfish and the selfless strawmen have prevented a proper debate in business ethics for too long.

Quo Vadis Business Ethics?

“…As a virtue ethicist, Melé essentially makes the ‘Anscombe Argument’ (Hühn, 2023, p. 874): ethics that denies the existence of eternal values is empty. He writes: ‘The use of “better” is very imprecise and requires some solid reference point.…”

“…Jasinska claims that misleading premises are underlying management theories, which are, in addition, ‘unable to capture the logic of practice because they are developed within the framework of scientific rationality’ (Sandberg & Tsoukas, 2011, p. 338). Scientific rationality is the ancient concept of reason stripped of its sensitive, discursive and moral elements (Hühn & Mandray, 2023).…”

“…Thus, he goes back to Aristotle, who held that humans, if in the right environment, will work towards the noble rather than be part of the ugly and evil (Hühn & Meyer, 2023).…”

“…Like other contributors, Gohl suggests that business ethics stops being the odd man out and is integrated into every facet of business theory. And it might give new life to Nitin Nohria and Kevin Kurana’s abandoned project of educating future managers who have an ethos (Hühn, 2023).…”

“…Business ethics itself has become a big business. Yet, according to most business ethicists, this growth in business ethics has coincided with more serious and more frequent ethical lapses in businesses (Hühn, 2023, p. 868) such as Volkswagen’s dieselgate (Hühn et al, 2018), Theranos (Carreyrou, 2019) or Wells Fargo (Edmondson, 2018), to name a few of the most prominent.…”