Author: Wallace, Lane
Source: The Atlantic
Number of pages: 3
The popularity of the late economist Milton Friedman's philosophy among business people has never surprised me much. After all, telling business people that "the business of business is business" is rather like telling people that eating dessert is actually good for you. It tells your audience what they want to believe, and relieves their guilt feelings about doing what they want to do anyway. No need to worry about pesky issues like employee welfare, environmental impact (unless required), or improving the social fabric of the community. No need to weigh the intangible costs to others of moving a business overseas, closing a factory for a quick profit, or paving roads through the Amazon to extract and export the oil.
By concentrating on the bottom line as the almighty measure of success, Friedman's philosophy also tends to focus employees on numbers as a measure of their own success. That focus, of course, encourages employees to work harder to increase those numbers. Which, in turn--surprise, surprise!--improves the company's bottom line even more. It's an incredibly convenient system that offers the appeal of neat and clean boundaries, and maximum profit for the company. Really... what's not to like?
What's not to like, of course, is an uneasy feeling that sets in, periodically, that perhaps the world isn't as neat as Friedman's economic model suggests. That by focusing exclusively on their own bottom lines, businesses can do extraordinary harm.
As a result of some of those recent disasters, as well as increasingly complex global markets and a growing belief that today's business executives need what investment icon Charlie Munger calls a "latticework of frameworks" to solve the growing number of "wicked" problems confronting them, a movement has begun to change what business students learn. At undergraduate and graduate business schools across the country--including Wharton, Harvard, Stanford, Yale and a host of other big names--curricula are being changed to include a greater focus on multi-disciplinary approaches, ethics, critical and integrative thinking, and even, in some cases, history and literature.