Drucker on Corporate Social Responsibility

From Peter Drucker’s Management:Tasks, Responsibilities, Practices’, after noting that expectations are placed on corporate entities not because they’re disliked, but because they’re one of the only institutions left that can effectively work towards their interests…so, the public thinks, let’s make our interests their interests.

Clearly, the demand for social responsibility is not as simple as most books, articles, and speeches on the subject make it out to be. But it is not possible to disregard it, as such distinguished economists as Milton Friedman of Chicago have urged. To be sure, Friedman’s argument that business is an economic institution and should stick to its economic task is well taken. There is danger that social responsibility will undermine economic performance and with it society altogether. There is surely an even greater danger that social responsibility will mean usurpation of power by business managers in areas in which they have no legitimate authority.

But it is also clear that social responsibility cannot be evaded. It is not only that the public demands it. It is not only that society needs it. The fact remains that in modern society there is no other leadership group but managers. If the managers of our major institutions, and especially of business, do not take responsibility for the common good, no one else can or will. Government is no longer capable, as political theories still have it, of being the “sovereign” and the “guardian of the common good” in a pluralist society of organizations. The leadership groups in this society, and this means the managers of the key institutions, whether they like it or not—indeed whether they are competent or not—have to think through what responsibilities they can and should assume, in what areas, and for what objectives. If there is one moral to these cautionary tales, it is not that social responsibility is both ambiguous and dangerous. It is that social impacts and social responsibilities are areas in which business—and not only big business—has to think through its role, has to set objectives, has to perform.

Social impacts and social responsibilities have to be managed.

Autocratic Management

Neither the Japanese, nor Zeiss, nor IBM practice “permissive management.” Management in Japan is notoriously autocratic. No one has ever mistaken an order by a Japanese company president for a polite request. Abbé, according to all reports, was not permissive either. While a kind man by all accounts, he was very much the German “Herr Professor” and was used to unquestioned authority. Thomas Watson, Sr., was a tyrant. Abbé and Watson demanded excellence in performance and did not accept good intentions as a substitute.

- Peter Drucker, Management: Tasks, Responsibilities, and Practices

Sound familiar?