Critically Evaluate How and to What Extent Should Management Recognise Corporate Social Responsibility Extending Beyond the Boundaries of the Organisation
Critically evaluate how and to what extent should management recognise corporate social responsibility extending beyond the boundaries of the organisation
Corporate Social Responsibility (CSR) is a wide ranging area of study. All companies have-
“Economic, social, ethical and environmental responsibilities, some of which require compliance with the law others requiring discretionary action to ensure that the company does not knowingly operate to the detriment of society” – McIntosh et al, 1998, Pg. 284
Social responsibility is an organisations responsibility towards those who are directly and indirectly affected by its activities. This means that firms don’t just have a responsibility and accountability to shareholders but society also.
In theory, society is built on a number of common social values and beliefs upheld by the majority. If society grants existence and protection to organisations they must be seen to ‘aligning their business operations with social values’.
There are 5 views of business ethics which are relevant to the case for and against CSR. The first view works off the rule that ‘Business is Business’ where only purely commercial aims are relevant, anything else comes second. This advocates Friedman’s view (illustrated overleaf) that the prime “responsibility of business is exclusively to maximise profit for shareholders”- McIntosh et al, 1998, Pg. xi.
Freidman’s Efficincy Perspective of Ethics Shareholders Hurt Shareholders Benefit
Mistakes
Managerially Responsible
Managerially Irresponsible
Managerially Responsible
Society
Hurt
Society
Benefits
The next two views are that the firm act consistently with the law and that good ethics means good business- this is the approach that appears to be taken by most businesses. The final two are based on morality- conventional reality being the morality of the moment and what is acceptable now, conventional wisdom cannot
Corporate Social Responsibility (CSR) is a wide ranging area of study. All companies have-
“Economic, social, ethical and environmental responsibilities, some of which require compliance with the law others requiring discretionary action to ensure that the company does not knowingly operate to the detriment of society” – McIntosh et al, 1998, Pg. 284
Social responsibility is an organisations responsibility towards those who are directly and indirectly affected by its activities. This means that firms don’t just have a responsibility and accountability to shareholders but society also.
In theory, society is built on a number of common social values and beliefs upheld by the majority. If society grants existence and protection to organisations they must be seen to ‘aligning their business operations with social values’.
There are 5 views of business ethics which are relevant to the case for and against CSR. The first view works off the rule that ‘Business is Business’ where only purely commercial aims are relevant, anything else comes second. This advocates Friedman’s view (illustrated overleaf) that the prime “responsibility of business is exclusively to maximise profit for shareholders”- McIntosh et al, 1998, Pg. xi.
Freidman’s Efficincy Perspective of Ethics Shareholders Hurt Shareholders Benefit
Mistakes
Managerially Responsible
Managerially Irresponsible
Managerially Responsible
Society
Hurt
Society
Benefits
The next two views are that the firm act consistently with the law and that good ethics means good business- this is the approach that appears to be taken by most businesses. The final two are based on morality- conventional reality being the morality of the moment and what is acceptable now, conventional wisdom cannot
References: Boatright, J.R. (2003) Ethics and the Conduct of Business, Prentice Hall. Hawkins, D.E. (2006) Corporate Social Responsibility, Palgrave Macmillan. Pg. xi, Pg. 76 McIntosh et al (1998) Corporate Citizenship, Pitman. Bradburn, R. (2001) Understanding Business Ethics, Continumm.