When Management Is not Self Centered : Where Peter Drucker and Milton Friedman Agree on the Business of Business

Peter Drucker (1978) holds that managers must take responsibility for the common weal. This notion seems to contradict Milton Friedman's (1970) famous observation according to which, "the social responsibility of business is to increase its profits." As the essay demonstrates, Friedman (1970) does not deduce this claim in terms of economic reasoning. Rather, in his determination of managerial obligations, he refers to the institutions of private property and the act of contracting. He thus evokes the classical doux-commerce doctrine according to which the pursuit of profits is a socially desirable activity.
Consequently, Friedman's (1970) dogma of shareholder value maximization as sole responsibility of managers is inherently linked to societal and ethical considerations that are also present in the argument of Drucker (1978). Jointly read, the works of Friedman (1970) and Drucker (1978) allow for definitions of "good management" as liberal art as proposed by Drucker (1989, 2008) that resolve tensions between the works of two giants of management thinking.