The paper "Role of Corporate Social Responsibility " is a good example of business coursework. Corporate social responsibility deals with business ethics and the behavior of the business towards the surrounding environment. This also translates to the consumers in which the business is serving whether the products being delivered to them are safe and healthy to their consumption. Corporate social responsibility carries many questions that need to be answered while carrying out any business venture. Some of the questions are how legitimate the company makes its profits. This can be answered by the legal activities they do and if all the production is recognized by the law (Albareda, Lozano and Ysa 2007). Corporate social responsibility also seeks to answer the question of a fair distribution of resources in terms of wealth.
All stakeholders are required to get an equal share of the company's wealth and the company should work hard to ensure that this is so. Another question that needs to be answered is whether the company should allow the government to decide any interest of the public and if the market should be given the responsibility of setting prices for some products (Brand Strategy 2007). Using the ethical theory, corporate social responsibility seeks to practice management theory which encompasses moral decision making which is meant for the good of the society.
Corporate responsibility is voluntarily taking on responsibilities and all companies should consider what is good for the welfare of the stakeholders this time not concentrating on the economic status and the legality of a business (Fry, Keim and Meiners 1982). This requires a lot of sacrifices while dealing with corporate responsibility as many are the times some important things have to be foregone and some aspects such as integrity and fairness be practised for any decision being made (Sun 2010).
Corporate responsibility embraces two major factors being environmental and societal while in their business operations where they have to act in a voluntary manner as they interact together. Corporate social responsibility, on the other hand, can be defined as the commitment in which a company has which can either be socially or economically that seeks to consider all stakeholders interests (Carroll and Buchholtz 2006). Three views are taken into consideration while discussing corporate social responsibility as there is the classical economic view, the social view and maximal social view.
Using the case study of ‘ Tobacco Companies and Product Safety’ , the discussion will give an explanation of the expectations of a company with regard to corporate social responsibility relating to the three views. In the classical economic view, the goals and aims in businesses are different from each other hence any business should have their unique organization and strategic goals to achieve. For this to be efficient there has to be a certain performance criterion that should be used to measure a company’ s growth (Griffin and Mahon 1997). In a classical approach, the main goal is the creation of profit hence does not deal with any social concerns about their stakeholders and leaves other organizations to take the responsibility of being concerned about the welfare of the stakeholders.
This has been a similar case in the cigarette manufacturing company whose aim was purely to make a profit and did not have any concern about the risk the company was giving its consumers (Asongu 2007).
It can be concluded that the company was purely based on a classical economic approach in its corporate social responsibility. In Milton Friedman’ s opinion, he presents three arguments where there is the free society argument, agent – principle argument and the taxation argument. Under the free societal argument is the classical view that sees a reduction of anything to result in a reduction of something else. Taking the example of profit, if lower, it will result in shareholders losing in terms of their share capital.
If prices are increased, this will result in customers going for substitutes. This represents a lower efficiency in terms of everything which translates to most companies not taking this as the best-preferred approach. Tobacco companies are in business mainly to make profits but at the same time, this profit should be made while adhering to the stipulated rules and regulations set by the government (Allen and Husted 2006). As stated by Friedman, a society can only be rendered free if a business fully maximizes its resources with the aim of generating a profit and abide by the rules of the game.
This, in other words, may mean that the business is free of fraud and has a free competitive ground to play in (Friedman1962).
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