Economic Humanism and Western Management: Theory and Practice

Abstract

Management practice perceives itself to be grounded in an economic approach to management; that is, a ‘profit-generating’ management. The key thesis developed in this chapter argues that management practice also is in certain respects humanistic and ethical. Why and how could management practice be considered as humanistic and ethical? This chapter analyses and explains the business ethics tradition of Milton Friedman and his well-known theorem that the ‘only social responsibility of companies were to maximise profits within legal constraints’ (Friedman 1970; Wagner-Tsukamoto 2007a). I outline key differences between an economic understanding of humanistic management and the behavioural, psychological, sociological, and anthropological approaches that are historically rooted in the Human Relations Movement, the management writings of Elton Mayo’s (1933) The Human Problems of an Industrial Civilization, Chester Barnard’s (1938), The Functions of the Chief Executive, and Douglas McGregor’s (1960) The Human Side of Enterprise, to name but a few. I also focus on western management theory and practice. This focus is reflected in the choice of theories discussed and the type of ‘western’ management problems they deal with.