The Social Responsibility of Managers: Reassessing and Integrating Diverse Perspectives

Abstract

The social responsibility of business has been a prominent issue in the academic and practitioner literatures, as well as in the curricula of business schools, for many years. While Friedman's iconic defense of profit maximization as the responsibility of management has been widely and extensively assailed, emerging positions on the role of business in society offer little clear and practical guidance to current managers, as well as Masters of Business Administration students. I argue in this article that the focus of the debate should shift to considering how the rules of the game surrounding business' behavior should be formulated and what the role of socially responsible managers should be in helping to establish those rules. My contention is that the goal of society should be to strengthen the linkage between the achievement of social objectives and profit maximization by business through “bright line” regulations and laws. Socially responsible managers will participate in setting the rules of the game by advising policymakers on how specific regulations and laws can be structured so that they most effectively condition the linkage between social objectives and profit maximization. If there is a unique social responsibility of managers beyond profit maximization, it is to participate in the policymaking process “honestly,” that is, without attempting to game the system through guile and opportunism.