‘Managers’ responsibility is to conduct business to increase profits’. Discuss.

• Nobel  laureate  Milton  Friedman  said  ‘The  social  responsibility  of  business  is  to increase  its profits…….  The  responsibility  of managers  is  to  conduct  business  in accordance with their stockholders’ desires, which generally will be to make as much money as possible while conforming to he basic rules of society, both those embodied in law and those embodied in ethical custom’

• The ethical custom refered by Friedman means only ‘refraining from fraud, deception and corruption.

• But Martin and Schinzinger say that Friedman is not correct in saying that managers’

Ethics reduce to only responsibility to maximize profits for stockholders.

• The  primary  responsibility  of  managers  is  to  produce  product  or  service  while maintaining respect for persons, including customers, employees and public.

• Ethically, personnel and safet y comes first before profits.

• By definition,   compared   to  charitable   institutions,   religions,   organizations,   etc organizations and corporates operate only for profits.

• But the ultimate goal of managers should be to make valuable products that are also profitable since profit making is one of the conditions to be in business.

• Good business and sound ethics go together. Hence the moral roles of managers and engineers are complementary and not opposed.

• Engineer managers have two major responsibilities – promoting and ethical climate and resolving conflicts.