“Corporate responsibility is part of the liberal elites campaign to destroy capitalism”. Discuss. Based on the view of the economist Michael Friedman (1970), the sole responsibility of any business is to make profit and nothing else. According to him only people fully have actual responsibilities. But his view is now unfashionable due to the fact that recent businesses are now exposed to other areas of corporate responsibility apart from the sole aim of profit making which is based on capitalist perspective.
Therefore, it is possible for us to arguevthat corporate respornsibility is part of the liberal elites campaign to destroy capitalism. Businesses today are in a radical state of change and operate in complex societies. To justify the meaning of our argument, it is helpful to analyze how corporate responsibility and capitalism affect modern societies.
First of all Many people view corporate responsibility in different perspectives. Some view it in the aspect of responsibility while others in a different form. The concept of corporate responsibility has been largely debated, addressed, discussed, and applied all around the world. In short, corporate responsibility aims to express the relationship of business and society. According to Buchanan & Huczynski (2010), corporate responsibility is the view that organizations should act ethically, in ways that contribute to economic development, the environment, quality of working life, local communities, and the wider society..
In modern times, the corporate responsibility movement has been expanded by liberal elites to promote social and environmental or ‘green’ issues. To many, this area is the most obvious and visible face of corporate responsibility. It involves the environmental impacts of firm’s activities as well as carries the highest public profile which is focused on public relations. For example the oil spillage from the tanker Exxon Valdes is estimated to have cost Exxon over US$7,000 million in clean-up costs and compensation. “There is a clear emphasis on sustainability defined by the World Commission on Environment and Development (1987) as ‘(meeting) the needs of the present without compromising the ability of future generations to meet their needs’. This emphasis of sustainability was adopted by the United Nations” (Needle D, 2004 p- 303).
On the other hand, capitalism is actually the private ownership of systems of production. Most modern societies are capitalistic by nature. The basis of a capitalist system lies in its ability to make profit not on its ability to contribute to the society. Many proponents therefore have resulted to view the system of capitalism as innovative in its own way and therefore see corporate responsibility as an alien system which doesn’t have any meaning despite it being the integral part of the capitalist societies.
Capitalism was actually expoused by Adam Smith in his book The Wealth of Nations published in 1776. According to Smith, competition alone would ensure that consumers received the best products at the best prices (Boatright,2003, p 372). In the kind of competition assumed by Smith, a seller who tries to charge more for his products than other sellers won’t be able to find any buyers. A job-seeker who asks more than the going wage won’t be hired. Because the “invisible hand” of competition will make the market work effectively, there will be no need to regulate prices or wages. In light of this position is the consumers self-interest together and the love to make better profit.
In contrast, the liberal elites fully support that corporate responsibility is a concept that ensures honesty in all business to do public good. In view of capitalism, the liberal elites examine the concept as all about corporate greed based on vested self interests. Typical example is the Enron case where free market deregulation and love of profit led the strong organization to their tragic end....
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