business ethics
Tony Roylen
CSR and the employee stakeholder
Corporate social responsibility (CSR) is now on the global agenda. The USA, the European Union (EU) and a number of developing countries are all looking to corporations to help address issues such as inequality, health and unemployment. CSR is based on the concept of ‘stakeholder democracy’, which is premised on the notion that organisations are made up of a number of different stakeholders with a multiplicity of interests, all of whom should have an influence over the organisation’s activities. This concept is supposed to preclude the privileging of any one interest above the rest (Zadek 2001). However, the question remains of how much influence different stakeholders will have in practice. Thompson & McHugh (1995) suggest that stakeholder democ- racy is fundamentally unrealistic about the distribution of decision-making power inside organisations, because it is the owners who hold the key ‘stakes’ in the organisation and ultimately it will be their interests that predominate. Zadek (1993) also argues that shareholder interests are always likely to predominate, favouring financial over non-financial outcomes, with markets tend- ing to reward bad rather than good behaviour, nSenior Lecturer, Department of Management, St Anthony’s College, and Research Fellow of the Centre for Innovation and Structural Change, National University of Ireland, Galway, Ireland.
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maximising short-term profits and externalising costs to individuals, the state and the region in terms of unemployment, poor working condi- tions, health and stress problems, and pollution. Furthermore, while the more extreme forms of employer exploitation such as child labour in ‘branded’ sweatshops1 often receive a great deal of media coverage, much less is said about the day-to-day abuses of employee rights in the industrialised countries, where it is assumed that companies (especially those adopting CSR) at least adhere to the spirit and letter of
CSR and the employee stakeholder
Corporate social responsibility (CSR) is now on the global agenda. The USA, the European Union (EU) and a number of developing countries are all looking to corporations to help address issues such as inequality, health and unemployment. CSR is based on the concept of ‘stakeholder democracy’, which is premised on the notion that organisations are made up of a number of different stakeholders with a multiplicity of interests, all of whom should have an influence over the organisation’s activities. This concept is supposed to preclude the privileging of any one interest above the rest (Zadek 2001). However, the question remains of how much influence different stakeholders will have in practice. Thompson & McHugh (1995) suggest that stakeholder democ- racy is fundamentally unrealistic about the distribution of decision-making power inside organisations, because it is the owners who hold the key ‘stakes’ in the organisation and ultimately it will be their interests that predominate. Zadek (1993) also argues that shareholder interests are always likely to predominate, favouring financial over non-financial outcomes, with markets tend- ing to reward bad rather than good behaviour, nSenior Lecturer, Department of Management, St Anthony’s College, and Research Fellow of the Centre for Innovation and Structural Change, National University of Ireland, Galway, Ireland.
42
maximising short-term profits and externalising costs to individuals, the state and the region in terms of unemployment, poor working condi- tions, health and stress problems, and pollution. Furthermore, while the more extreme forms of employer exploitation such as child labour in ‘branded’ sweatshops1 often receive a great deal of media coverage, much less is said about the day-to-day abuses of employee rights in the industrialised countries, where it is assumed that companies (especially those adopting CSR) at least adhere to the spirit and letter of