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Taking Friedman Seriously: Maximizing Profits and Social Performance


  • Bryan W. Husted
  • José de Jesus Salazar


This paper examines the situation of firms that have two objectives: profit maximization and social performance. By looking comparatively at the cases of altruism, coerced egoism, and strategy, this paper uses the tools of microeconomics to define the optimal level of social output that should be produced in each case. We show that it is wiser for the firm to act strategically than to be coerced into making investments in corporate social responsibility. In addition, we argue that greater overall social output will be achieved by the strategic approach, than by the altruistic approach. Copyright Blackwell Publishing Ltd 2006.

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  • Bryan W. Husted & José de Jesus Salazar, 2006. "Taking Friedman Seriously: Maximizing Profits and Social Performance," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 75-91, January.
  • Handle: RePEc:bla:jomstd:v:43:y:2006:i:1:p:75-91

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    References listed on IDEAS

    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
    2. Robinson, Mark & Riddell, Roger C., 1995. "Non-Governmental Organizations and Rural Poverty Alleviation," OUP Catalogue, Oxford University Press, number 9780198233305, June.
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