Discuss about the Corporate Social Responsibility and Society.
This essay seeks to establish the relationship between morality and corporate social responsibility and how they affect corporate organizations.
The essay also seeks to establish the extent to which corporations should engage in corporate social responsibility. There are increasing calls for corporations to be involved in activities of the people that affect its well being (Michalos & Poff, 2013). The essay discusses the narrow and the broad views of the corporate social responsibility.
I achieved the purpose of this essay by conducting research on various corporations` corporate social responsibility activities in the recent past. Research by authors in this field was reviewed in order to analyze their views and come up with conclusions.
The findings of this study are that corporations should be held morally responsible for their actions and they should engage in corporate social responsibility.
Can an organization be held morally responsible for its actions? That has been the question that has elicited a lot of debate and there are various arguments that have resulted from this debate. A case example of where the question of corporate moral responsibility was highly debated is the Gulf of Mexico oil spill by BP, an American oil company (Kolb, 2008). This was considered to be morally wrong. Under the American law, corporations are considered persons in law. The question now arises, are corporations moral persons?
There is a common argument that only human beings can be morally responsible and so the actions of the corporation are the actions of individual members associated with that organization. This argument is based on the fact that corporations do not have the conscience to determine what is morally right or wrong. Only human beings do hence the people involved in the firm should bear responsibility on behalf of the organization. In the INSEAD (European Institute for Business Administration) ethics conference held recently the issue of moral responsibility for corporations brought about new arguments and ideas on this issue. According to Peter French, a professor of philosophy at Arizona State University who is a proponent of corporate moral theory, there is “corporate diachronic moral responsibility”. French says that the responsibility of the firm and individuals in the firm are not mutually exclusive. Both the firm and the managers in charge of the organizations can be morally responsible for the actions of the organization (Brink, 2011).
Professor Phillip Pettit of Laurence S.Rockerfeller University argues in support of corporate moral responsibility on a five key claim including the claim that a corporation is a “conversable agent”. He states that corporations make commitments through words and they are held responsible if they fail to fulfill what they promised. In this view, organizations have their own which is different from its member’s voice. Therefore both the corporations and the individuals involved in the moral wrong should be held responsible for their actions.
Another important argument supporting corporate moral responsibility is that of Christian List of London School Of Economics. According to List, people are held morally responsible because they are “intentional agents”. Firms should therefore be held responsible where the following three joint necessary and sufficient conditions apply: The first condition is where there is a possibility to do something that is either right or wrong. The second condition is access to relevant information I.e. the person acting on behalf of the organization should be able to be able to make judgment based on the evidence available to them. The third condition is that the agent is in control of which option to choose (Fredrick,2007).
There are also various arguments opposing moral responsibility for corporations. According to Manny Velasquez, corporation’s acts do not originate from the corporation but from the members of the corporation. This therefore means that the people who make decisions for the organization should be held morally responsible if the outcome of their decisions is undesirable. Ian Maitland, Professor of strategic management and entrepreneurship at The University of Minnesota also argues that the idea of corporate moral agency can lead to undesirable outcomes since the people in charge of the firm can be uncountable for their actions. “The anthromorphism of corporations does not humanize the firm but actually it makes it inhuman” he concludes( Ahner,2007).
Corporate social responsibility can be defined as a form of self regulations by a corporation that is integrated in the model of the business of that firm. The organization monitors itself to ensure compliance with the law, ethical standards and international values and norms. Corporate social responsibility can happen in different ways such as philanthropy, economic involvement or even social activities geared toward improving humanity.
The narrow view of corporate social responsibility argues against organizations showing corporate social responsibility and should focus solely on making profits. The broad view of corporate social responsibility is a view of role of the corporations. It argues that apart from the business main objective of making profits, the organizations also have a responsibility towards the communities where they operate and they should address the negative outcomes resulting from their operations (Vilcox & Mohan, 2007).
Social purpose
This view of corporate responsibility argues that business cannot make decisions that are solely based from an economic point of view. This is because organizations exist within a society and hence they affect the people living around in one way or another. Businesses therefore have a responsibility towards the people who are involved in its activities. Corporations have a duty toward the employees, suppliers, shareholders the customers and the shareholder. The responsibility of the company towards the employee is to provide a safe and conducive working environment for its employee. Organizations should also conserve the environment in which they carry out their activities(Fernando, 2009).
There exists a saying that great power comes with great responsibility. Since business organizations are large and have great power and influence, they have a responsibility towards the community. Corporations have economic, social and political power which they can use to help the society. The economic power of corporations is seen in the profits they make. Many corporations make very huge profits from their business operations and should use part of this proceeds to help the society. This can be done in very many ways including philanthropic work and many other different activities. The social power of organizations is the power of the organizations to influence the culture, norms and values of the people living and involved in it. The corporations should therefore strain towards influencing the culture and values of the people involved in a positive manner. The political responsibility o f the organizations towards the community should be to promote peace and understanding among the people living in the society.
According to this argument, an unwritten agreement between the society and businesses exists. Under this contract, it is the society that makes the rules and guidelines under which the organizations operate. The society also sets the responsibilities of the people living in it. This therefore calls for organizations to adhere to the rules and responsibilities that have been set by the society the moment they decide to operate in that community. Therefore, when the society is focused on ensuring sustainability, high quality life and environmental sustainability, the organizations should also do the same so as to adhere to the set rules and standards.
This argument is based on Adam Smith’s view that in a free market or society, organizations should be allowed to promote and spearhead their own economic self-interest and they will be guided by an invisible hand in doing so in order to promote the greater good. He argues that if organizations are forced to be involved in corporate social responsibility that will reduce their ability to meet the material needs of the society. This will in turn reduce their well being. Therefore, organizations should be left alone since they are not moral agents.
The argument here is that it’s the responsibility of any government to regulate and set the behavior and standard of corporations and ensure ethical actions. Furthermore it’s the work of the government to perform the actions and activities that the corporations are expected to perform in the society.
According to this argument, the managers of corporations do not have the skills and expertise to set and ensure adherence to norms and values in the society. Corporations have only the expertise to make economic decisions that will affect its welfare. Therefore, organizations should not be involved in corporate social responsibility since they are not experts in them hence can’t do it well(Weiss,2014).
According to this argument, if organizations are allowed to be involved in corporate social responsibility, they may use their power and influence to make the society commercial and materialistic. This will advance their profit objective instead of promoting humanity.
The broad view is more appealing than the narrow view. This is seen especially in the shortcomings that are involved in the narrow view. The narrow view is not appropriate because, the organizations during Adam smith`s era are different from those that exists nowadays and therefore organizations should be involved in CSR. It is also difficult for the government to go round the country across all the organization controlling them and therefore the organizations should take up social responsibility (Mitchell,2009). Another argument against the narrow view is that people act morally even in areas that they are not experts in and therefore even organizations should do the same. Therefore from this argument the broad view is better than the narrow view.
Kantian theory would support the broad view of corporate social responsibility due to the following reasons:
According to Kant`s theory, the rightness or wrongness of our actions does not depend on consequences but on whether our duty is fulfilled. Kant believed in a supreme principle of morality which he referred to as The Categorical Imperative.. Kant believed that certain kinds of actions were not allowed at all even when they brought happiness to the person who does that action. An example of these actions is murder, theft or rape. Kant`s argue that before one does this actions he/she must ask themselves some two questions: Can anyone thinking rationally take the same action as about to take? Do my actions respect human goals or are they for my own personal benefit? If the answers to this questions are no, then we should not do that thing. That`s the basic outline of Kant ethics. (Brenkert & Beauchamp,2010).
The universal idea that supports the broad view of corporate social responsibility is that organizations should engage in social responsibility because the activities that they carry out affect the society. A rationale person should accept this law since business activities affects the people around them and so they should be able to benefit from it.
A company that adopts corporate social responsibility is doing its duty. This is because since every person in the society has duties and responsibilities, so should organizations
Corporate organization can engage in corporate social responsibility with a view of achieving their ultimate objective which is making profits. This is possible where organizations use the activities that they are involved in to attract more customers for their business. Since most customers feel a connection with a corporate organization that is concerned about their welfare, they will become loyal to the organization (Cory, 2002). This will eventually help the organization to achieve its objective of profit maximization.
From the above discussions, the role of businesses in the society in which they operate cannot be underestimated. Corporations are increasingly involved in the social activities in many different ways. The discussion now is not on whether organizations should be involved in corporate social responsibility but to what extent should they be involved. Corporations are even donating more than 5% of their profits to fund social causes. Corporations are also increasingly concerned about environmental conservation and are adopting mechanisms to help protect the environment. Therefore corporations cannot exist without the society and therefore should involve themselves in social responsibilities as much as possible.
Conclusion
There is a very close relationship between the ethics that exist in a society and the businesses that operate in this society. Organizations should adhere to the rules and responsibilities that are set by the society.
Businesses should be morally responsible for their actions. This is seen from the analysis of the theories and arguments discussed in this essay. When organizations are morally responsible for their actions they will take more responsibility towards protecting the welfare of the people who live around it. Therefore organizations should adopt Kant`s theory on ethics in order to fulfill their corporate social responsibilities.
References
Michalos, A. C., & Poff, D. C. (2013). Citation classics from the Journal of business ethics: Celebrating the first thirty years of publication. Dordrecht: Springer.
Kolb, R. W. (2008). Encyclopedia of business ethics and society. Thousand Oaks: Sage Publications.
Sharp, D. J. (2006). Cases in business ethics. Thousand Oaks, Calif: Sage Publications.
Brink, A. (2011). Corporate Governance and Business Ethics.
Fredrick, R. (2007). A Companion to Business Ethics. Chichester: John Wiley & Sons.
De, G. R. T. (2010). Business ethics. Boston [u.a.: Prentice Hall.
Ahner, E. C. (2007). Business ethics. New York: Orbis.
Vilcox, M. W., & Mohan, T. O. (2007). Contemporary issues in business ethics. New York: Nova Science Publishers.
Cory, J. (2002). Activist Business Ethics. Boston, MA: Springer US.
Brenkert, G. G., & Beauchamp, T. L. (2010). The Oxford handbook of business ethics. Oxford: Oxford University Press.
Mitchell, C. (2009). A short course in international business ethics: Combining ethics and profits in global business. Petaluma, CA: World Trade Press.
Sage brief guide to business ethics. (2012). Los Angeles: SAGE
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach.
Fernando, A.C. (2009). Business Ethics: An Indian Perspective. Prentice Hall.
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