Social Contract Between Business & Society in the U.S. by Luther Wilson
Bus 351 – Business, Society and Government
Assignment – Position Paper
The assignment that I chose was: Research and discuss the concept of the social contract between business and society in the U.S. First I had to research what a social contract consisted of. After looking at various companies ideals of social contracts, I came to the conclusion that there is a clear expectation that businesses have an obligation to improve society’s status. The overall consensus is that businesses should have their employee’s interests at heart without having to break any rules of justice in society. Bottom line: as long as the agreements between society and businesses are ethical, their relationship will remain civil. While researching my topic, I read an excerpt from Purity Makandi’s article: “Social Contact Theories in Business”. (The Corporate Contract: Actual or Fictional?) He stated that: “84% of corporate executives believe that society expects businesses to take a more active role in environmental, social, and political issues, now”. He also stated that: “20% of companies surveyed said their philanthropic efforts were very or extremely effective in meeting social or business goals”. A recent report that was released by Maverick Research and compiled by the IT market research group, Gartner, stated that: “The Capitalist structure as we know it is being threatened by Web-inspired values”. (Page 123) The report further suggested that the next generation of workers will need to have a more egalitarian and democratic approach to their decision making process. Many of the authorities that I have researched have referenced the “99%” theory that insists that this percentage, of all employees, is the backbone of all companies. These employees constitute the driving force that allows these companies to remain profitable. According to Dutch organizational researcher Geert Hofstede:” The United States already has a relatively low power distance index and the country was founded on the premise of “liberty and justice for all”. (U.S. State of Affairs, page 262)Furthermore, the constant communication between management and the employees is a normal process. Social contracts imply that businesses have a moral obligation to improve the societies that they operate in. This can only be achieved when businesses keep their employees interests in mind. In essence, the members of any society allow businesses to operate in establishments to provide specific benefits to that community. These benefits include: enhanced decision-making, use of modern technology and resources, improving the capacity of acquisition, and economic efficiency. It is inferred that society will only allow businesses to exist if these societal benefits are met. There has been a long-standing debate about what businesses real role in society should be. Renowned author Milton Friedman stated that: “The business of business is business”. He believes that society’s interests are in direct contrast to corporate management’s ideologies. In an attempt to promote their own causes and still enlist the support of society, organizations have implemented Corporate Social Responsibility (CSR). This concept proves to be a disillusioned attempt by companies that claim to already be practicing CSR, to satisfy campaign groups that insist that they need to do more to mitigate their social issues. As other countries in the world, especially Continental and Central Europe are moving toward the Anglo-Saxon shareholder value model; many debates arise and prove to have global significance. Society, in general, believes that organizations should find a way to incorporate social issues into their business strategies in such a way as to reflect their real business goals. Large companies have to represent themselves in...
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