Making a profit within the ambit of the law and to make decisions that will benefit not only the interest and welfare of society but also that of the organisation Origins of Social Responsibility
• Entrepreneurs recognised a responsibility to employees. This refers to an act of paternalism to act in a fatherly way, caring and taking responsibility • Josesph Rowntree – Paternalistic Chief Executive – provide generous medical and dental schemes. Not possible • Thus there was a necessity to have a separation of ownership and control, with professional managers beginning to run businesses. These managers were less likely to have a paternalistic approach. 3.2 Contrasting View on Social Responsibility
Friedman’s narrow classical view [Make $$$] Bowie’s middleground Mulligan’s broad socioeconomic view [SR] Classical View
Management’s only social responsibility is to maximise profits Milton Friedman
Managers’ primary responsibilities is to serve the interests of the stockholders doing ‘social good’ adds to the cost of doing business costs have to be passed on to consumers Christopher Stone & Kenneth Arrow reject Friedman’s articles and argues the utilisation of stable ethical codes to insitutionalise corporate social responsibility Socio-Economic View
Businesses are not just economic institutions
Mgt’s SR goes beyond making profits to include protecting and improving society’s welfare Businesses have responsibility to a society that endorses their creation thru laws and regulations, and supports them by buying their products / services More orgs. around the world have increased their SR
Bowie & Duska’s Maximalist theory of SR – To do good
Beauchamp & Bowie believe that just as the duties of citizens need to be realistic, so does the relation between ethics and business
3.3 Carol’s Four Part Model
3.6 High Profit Disasters
• E.gs are Chemical Leak – Union Carbide plant in Bhopal, India and Great ecological disaster in USA – BP oil leak • Pressure why organisations need to behave in a social responsible manner - highly motivated people who run the types of pressure groups mentioned in 3.5 - the media, government, religious bodies and consumers
- their own employees, shareholders, even bankers and consultants also do not wish to be associated with an irresponsible company - high profile disasters – Union Carbide and BP Mexico oil leak
Ad hoc pressure groups
| protesting about a one-off initiative or event
| e.g protesting against the cutting of an old tree to make way of highway
| Consumer pressure groups
| campaigning for issues such as consumer information, value, and safety
| e.g CASE in Singapore - question the increase in transportation case; ensure that private educational institution safeguard the interest of students via Case Trust.
| Single issue pressure groups
| Focused campaigns on a particular company or type of company, on a particular practice or product
| • Surgeon's General Report - which forced the govt to pass legislation to include health warning on cigarettes • Ralph Nader - champion of consumerism - championed and forced govt to protect consumers against car manufacturers.
| Environmental pressure groups
| campaigning for the protection of the natural environment
| • Green Peace • WWF - world wildlife fund• Friends of the Earth
| Anti-capitalist groups
| campaigning against the way business is organised
| • recent protest in HK over the WTO conference - against issues of globalisation of the spread of western products; Protest against global warming in Copenhagen.
3.7 Organisation Social Responsiveness
- Organisational social responsiveness refers to the development of organisational decision processes whereby managers anticipate, respond to and manage areas of social responsibility – Bartol and Martin
• Social Repsonsiveness Strategy (Bartol and Martin)
According to Johnson...
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