Preview

Corporate Social Responsibility in the Marketplace

Powerful Essays
Open Document
Open Document
3112 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Corporate Social Responsibility in the Marketplace
In understanding the subject of social responsibility in business, there are many varying views and theories presented. The argument, at the extremes, is one that is purely economic in nature and the other that requires corporation’s responsibility to society. Today society demands social responsiveness of businesses in the marketplace. A businesses’ failure to act socially or ethically responsible, in some cases, could form the foundation for its own peril. My paper attempts to define social responsibility, discuss views and theories, and provide case examples where businesses respond to situations in the global marketplace. The argument that corporation’s responsibility to shareholders to maximize profits as a sole objective is no longer acceptable by society. The purely economic view of the issue will not suffice. Businesses will always seek to maximize profits, but companies are increasingly aware that organizational values and social responsiveness play to the very heart of their goals in the pursuit of profits. “What does it mean for a corporation to be socially responsible? The concept is described by many terms. It has been called, “profit making only”, “going beyond profit making”, “voluntary activities”, “concern for the broader social system”, and “social responsiveness”. “Most focused attention is on the two extremes. On one side, there is the classical-or purely economic view, and on the other side, there is the socioeconomic position” (Robbins/Coulter 100). First, we will explore four theories of social responsibility. The four legal theories surrounding the issue are maximizing profits, moral minimum, stakeholder interest, and corporate citizenship.

Maximizing profits is the traditional or classic view. This view is concerned with maximizing profits for shareholders. “This view, which dominated the nineteenth century, holds that the interests of other constituencies, (e.g., employees, suppliers, residents of communities) are not



Cited: Cheeseman, Henry R., Business Law, Legal, E-Commerce, Ethical, and International Environments, Upper Saddle River, New Jersey; Pearson 2006, 155-160. Robbins, Stephen P, and Mary Coulter, Management, Upper Saddle River, New Jersey; Pearson 2005, 100-106. Baker, Mallen, “Arguments against Corporate Social Responsibility” Mallen Baker .net 22 April 2006 <http://www.mallenbaker.net/csr/CSRfiles/against.html> Nieuwlands, Hans, “Heeding the call: more and more, stakeholders are demanding that corporations live up to their social responsibilities and institute practices that value people, communities, and the environment.”, Internal Auditor, August 2003 Issue,<www.allbusiness.com/periodicals/publications/41446-1-2.html> Ostas, Daniel T., “Cooperate, comply, or evade? A corporate executive 's social responsibilities with regard to law”, American Business Law Journal, Summer 2004 Issue, <www.allbusiness.com/periodicals/article/461803-1.html>

You May Also Find These Documents Helpful

  • Best Essays

    This report will provide treatment, inclusive of recommendations, to four social-responsibility abstractions: environmental, ethical-leadership, sustainability, and legal considerations. The ideal result will be to prove a correlation between corporate social responsibility and corporate profit-maximization goals. This substantiated correlation should, then, prove that corporate flourishing cannot be possible with an interest in human flourishing.…

    • 4449 Words
    • 127 Pages
    Best Essays
  • Best Essays

    Cited: Bartter, Jacqueline. “A New Model of Corporate Social Responsibility.” Iprs.uscs.edu. University of California, San Diego, 2012. Web. 13 Oct. 2012. http://irps.ucsd.edu/assets/001/503681.pdf…

    • 3241 Words
    • 13 Pages
    Best Essays
  • Better Essays

    It is overwhelming how corporations have embedded a social responsibility in their mission statements and company objectives. This leaves us with one assertion that is that corporations do have some level of obligation towards society’s morality; however, the corporation itself is not a moral agent (Klaus M. Leisinger). The discussion that follows is about corporations being moral agents or otherwise; however I will reach a conclusion that corporations do have an obligation that extends beyond obeying the law; evens so this obligation have been derived from the corporations quest for profit making. Corporation’s obligation…

    • 1479 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    In today’s modern business world, commerce implements operation, drive and manner notions with endorsement and adoption of corporate social responsibility as a matter of course (David Henderson 2004). The stakeholder groups, for instance, governments, communities, suppliers, employees, customers and stockholders persistently claim administrators to dedicate capitals to corporate social responsibility (McWilliams and Siegel 2001, 117). Despite the fact, strategic corporate social responsibility is far more selective on being a standing corporation rate citizen and also addressing the social issues that the corporate creates (Micheal E. Porter and Mark R. Kramer 2006).…

    • 2250 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    With the introduction of worldwide markets, small corporations have had to make great sacrifices in order to excel, social responsibility being one of the first cuts. Response to the rights of consumers, social responsibility not only enhances the lives of the communities that companies depend on, but also improves the value of businesses, the way their stakeholders are treated and it helps to boost reputation.…

    • 777 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Corporate social responsibility (CSR) as a topic has received the attention of organisations and managers as a whole. The 1950s marked the start of the modern era of CSR for managers, where Howard R. Bowen (1953) defines social responsibilities in his publication as the businesses’ duty to make decision and follow principles that are acceptable to society. However, Milton Friedman (1970) argued that social responsibilities is for people not businesses, he claims that the only responsibility business managers should have is to use all their resources to maximise profit and increase shareholder’s wealth (Friedman, York Times Magazine, September 13, 1970, pp. 32-34).…

    • 2250 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    In recent years, Corporate and Social Responsibility has become an ever increasing concern and source of community debate. It is now socially accepted that corporations have some ongoing responsibility, though sometimes ignored, to set a good example, make decisions based on social good and on ensuring positive environmental practices.…

    • 1006 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    As we learned from the class lectures and Julia’s talk on last class, the Board of Directors is primarily loyal to shareholders and has the fiduciary duties of taking care of shareholder wealth. So the rising question now is: “Is Corporation Social Responsibility (CSR) conflicted with the bottom line?” It’s not a easy question to answer, because CSR should mostly contribute to a corporation’s intangible asset and long-term profit, both of which are hared to measure. However, some past cases have illustrated that market does value CSR and such appreciation can transit to be values for shareholders. One best example here is the Johnson & Johnson’s Tylenol case, in which some drugs on sale were positioned by individuals, and the corporation decided to remove all Tylenol drugs on market with public announcement of warnings to consumers; the declined market share was quickly recovered with climbing stock price once Johnson & Johnson re-launched its products due to its earned public reputation of being safe and responsible. Moreover, even though we can’t be sure of CSR’s positive impacts, there’s significant certainty that public reveal of non-socially-responsible behaviors of corporations would definite hurt shareholder benefits, and there were so many examples to tell revealed in the financial crisis. In addition, it’s a trend of more socially responsible consumptions and I think the trend is speeding up with rising living standards and greater awareness of environmental and social problems worldwide.…

    • 472 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Social Responsibility is the new buzz word in the world of business. “It’s no longer a question of if companies should engage in [corporate social responsibility]. It’s now a question of to what extent will they do so […], “says Alison DaSilva, executive vice president for research and insights at Cone Communications (Brooks). The question, however, is not whether or not companies should be socially responsible, but how is that society defined and how is that social responsibly determined. In their debate on social responsibly of business, John Macke and T.J. Rodgers are not in disagreement about the implementation of the concept.…

    • 635 Words
    • 3 Pages
    Good Essays
  • Good Essays

    The ‘Narrow View’ argues that profit maximisation is the only objective for a business. Levitt.T wrote, “In the end business has only two responsibilities- to obey the elementary canons of face-to-face civility (honesty, good faith and so on) and to seek material gain”. Milton Friedman argued that business has no social responsibilities other than to maximise profit. Friedman also argues that the corporation is an artificial person and can, therefore, only have "artificial responsibilities." "Business" is apparently an even more artificial construct and therefore we are left with just proprietors and corporate executives who can actually be responsible. Because the function of business organisation is to make money, the owners of corporations employ executives to accomplish the goals, thus managers are obliged to act in the interest of owners. According to Friedman, executives have social corporate responsibilities beyond pursuit of profit. They must spend shareholder money for general social interest such as taxing the owners and spending taxes on social causes.…

    • 735 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Archie Carroll’s hierarchical chart depicting the four components of his view on corporate social responsibility is sketched out as a pyramid for ease of use and understanding. The pyramids wide base, and the foundation of this theory, represents “economic responsibility” the basic building block for a positive corporation. This layer of the pyramid makes the distinction that it is the responsibility of an organization is to fulfill its financial obligation of producing revenue for its investors. The next layer up on the pyramid represents “legal responsibility” or the fact that a business is expected to obey the laws in its country of origin, because the laws in a society 's classify what is acceptable behavior. The third layer up represents “ethical responsibility” which begins to turn our model into a less clearly defined structure. Definitions used today for this layer tend to be somewhat opaque due to new processes and technologies that are influencing the way society functions. At its most fundamental layer, this is the obligation to do what is just and fair, and to avoid harm to employees, consumers, the environment. The top layer, the “discretionary responsibility” layer represents the pinnacle of corporate social responsibility, the expectation that a business is supposed to be a good corporate citizen. This peak layer is where business is expected to contribute financial and human resources to the community and to improve the quality of life. This point of the pyramid, by design, should be the shining point of business acumen, but it also carries a similar opacity than that previous ethic layer but for different reasons to be discussed at the end of this essay. It is these last two top levels where today’s corporations are leveraging efforts to produce meaningful and directional guidance. In order for this effort to work the solutions and contributions by…

    • 1003 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    The different aspects of corporate social responsibility (CSR) have been the topic of considerable debate since the last decades of the twentieth century. Main factor for the increased interest on the part of stakeholders in this topic are the increased public awareness and interest in the corporate social responsibility following the Information Revolution. This essay will assess the dangers and benefits of the business ethics for most of the stakeholders – employees, organizations, society, shareholders and the environment. It will also explore specific examples of corporate social responsibility in different large corporations and will make a comparison between two large companies’ ethical policies. The position that I will defend is that people behind corporations are the ones who can be philanthropic but enterprises themselves can only be driven by the laws of market (which in the modern economic reality in most Western countries demands an increasing attention to business ethics).…

    • 1916 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    The present-day conception of corporate social responsibility (CSR) implies that companies voluntarily integrate social and environmental concerns in their operations and interaction with stakeholders. The European Commission defines it as “a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment.” (European Commission, 2001, p. 5) It is related to complex issues such as environmental protection, human resources management, health and safety at work, relations with local communities, relations with suppliers and consumers. The notion of CSR is one of ethical and moral issues surrounding corporate decision making and behaviour. Knowing if a company should undertake certain activities or refrain from doing so because they are beneficial or harmful to society is a central question. Social issues deserve moral consideration of their own and should lead managers to consider the social impacts of corporate activities in decision making. Regardless of any stakeholders’ pressures, actions which lead to things such as the conservation of the Earth’s natural resources or bio-diversity preservation, are morally praiseworthy. However, some argue that the contribution of concepts such as CSR is just a reminder that the search for profit should be constrained by social considerations (Valor, 2005, p. 199). Increasingly CSR is analysed as a source of competitive advantage and not as an end in itself (Branco and Rodrigues, 2006). In effect, the concept of CSR has evolved from being regarded as detrimental to a company’s profitability, to being considered as somehow benefiting the company as a whole, at least in the long run (see, for example, Hess et al., 2002; Porter and Kramer, 2002; Smith, 2003).…

    • 11526 Words
    • 33 Pages
    Powerful Essays
  • Best Essays

    There are many different views on the extent to which corporations should be involved in societal concerns. The three most prominent are the stockholder theory, the concept of social business, and the stakeholder theory. Of these, the stakeholder theory is the most appropriate. Because corporations are considered to be individuals within our society, they bear a certain amount of responsibility to their fellow citizens, so it is not enough for them to act only in the interest of their stockholders. However, corporations are entitled to earn profits, and therefore cannot be expected to act as purely social businesses. Consequently, businesses must look for a happy medium within the stakeholder theory, acting in the interests of the stockholders, customers, employees and civil society.…

    • 2186 Words
    • 9 Pages
    Best Essays
  • Best Essays

    ‘Corporate social responsibility (CSR) is a long-term strategy, uniquely relevant to the twenty-first century, in which responsible social change can become a source of innovation and profits rather than added cost‘ (Vogel, David J, 2005, p.19). ‘Those that don't make that effort won't be a problem because ultimately they won't be around.’ (L. Hunter Lovins, 2006, p.26). Obviously, CSR is no longer a new strategy to companies nowadays.…

    • 2685 Words
    • 11 Pages
    Best Essays