Corporate Social Responsibility Theories - Case Study Example

Analysis of Corporate Social Responsibility Theories Name Course Name and Code Instructor’s Name Date Introduction The issue of corporate social responsibility has been argued and debated continuously for long periods. Its importance within an organisation and the society in which it operates is crucial in to ensure the organisation becomes sustainable. Numerous theories, opinions and views have been expressed on business social responsibilities, which each either viewing the contribution of the business to the society and the contribution of the business to the business itself. The aim of this essay is to analyse the case study, “The Tobacco Companies and Product Safety” through utilisation of three corporate social responsibility views (Velasquez, 2012, p. 326). These three perspectives are the socio-economic view (the duty to prevent harm within the Kew Garden Principles), the classical economic view (Milton Friedman) and the broad social view (the duty to contribute to the society has expressed by the KGP). The Classical Economic View (Milton Friedman) The opinion of corporate social responsibility has featured in different organisations and Milton Friedman theory the classical economic view (Sun, Stewart and Pollard, 2010). The opinion of classical economic view is premised on an organisation maximisation on profits and responsibility towards the society is provision of services and products (Hartman and DesJardins, 2007). From this theory, the organisation main aim is increasing revenues to the shareholders. Therefore, the organisation or business has no obligation to their society and communities. In the case study, the aim of the tobacco companies is to increase revenues without factoring into consideration the effect to the society (Zu, 2009). Even though numerous complains exist on smoking in relation to health, the tobacco companies produced advertisements that pushed up sales and at the same time stating smoking has no negative effect (Banerjee, 2007). This illustrates how Milton Friedman opinion is utilised by these companies to increase revenues and make more profits without educating the public on effects of smoking (Monks and Minow, 2012). The tobacco companies went to an extent of claiming that smoking has no effect because many doctors smoke (Banerjee, 2007). Their argument is if the doctors are able to smoke, it means smoking has no health related effect. Utilising such strategy makes more people to smoke and also the increase of nicotine to make new smokers easily addicted to smoking (Hartman and DesJardins, 2007). Moreover, the advertisements were premised on attracting more children ensuring the tobacco industry has sustainable customers (Hartman and DesJardins, 2007). This approach also champions Milton view in that businesses have no obligation to the society provided the organisations can produce more cigarettes and making the shareholders’ revenues grow (Zu, 2009). The Socio-economic View (Kew Garden Principles) The Kew Gardens principle is based on four principles (Monks and Minow, 2012). These principles claims that it is the responsibility of a group of people or a person to eliminate social jury when an individual is in a genuine need, they are aware of this need, they can address the issue even if not conclusively and assuming that the individual is the last resort for the person with distress (Hartman and DesJardins, 2007). The principles aims to champion ethical responsibility and social corporate responsibility on the way activities can be accomplished. This theory is applicable to the case study especially the contribution of the tobacco industry in the lives of the society (Banerjee, 2007). The first principle, the genuine need addresses the contribution of the tobacco industry to the society (Hartman and DesJardins, 2007). The tobacco industry believes that the costumers require more cigarettes because of the urge of continuous smoking. However, the same companies do not understand they are the ones who started and contributed to worsening of the situation (Zu, 2009). The aim of the society and the community is to stay healthily and this can be achieved through championing health initiatives that are premised on reasons and aimed outcome (Carroll and Buchholtz, 2009). Tobacco industry know that they are causing health problems such as cancer through production of cigarettes but do not stop or inform the society about the problem but they worse the situation by claiming there is no side effect of smoking (Banerjee, 2007). The second principle is the awareness of the need. The tobacco industry is aware smoking is dangerous and they go to an extent in which they introduce young smokers to continue smoking to sustain the tobacco industry (Hartman and DesJardins, 2007). The tobacco industry also utilises doctors in claiming their views and opinions are not false because numerous doctors should be aware of the problem but they continue with the act (Monks and Minow, 2012). Therefore, the tobacco industry should not aim only at improving the economies but should also consider social repercussions of their actions (Banerjee, 2007). The third principle from the social economic view is doing something to address the issue. The society and the tobacco companies should come together to address the issue of smoking (Zu, 2009). The tobacco industry is better placed in addressing the problem by informing the society that smoking of tobacco is dangerous for their health (Hartman and DesJardins, 2007). In addition, the tobacco industry should not involve the young children and advertisements promoted in changing children behaviour towards smoking should have been avoided completely by the tobacco industry (Hartman and DesJardins, 2007). In addition, other stakeholders such as media houses and promotional channels should not have accepted to produce messages towards encouraging children to smoke (Carroll and Buchholtz, 2009). Therefore, different stakeholders should have come together to ensure the entire society lives based on knowing what is wrong with a certain and how the product can affect negatively the society. The fourth and last principle is the factor that there is no one else who can address the problem except the immediate persons within the problem area (Hartman and DesJardins, 2007). The society and the tobacco companies should understand the problem exists and there is no else who can address the problem except themselves (Zu, 2009). Production and selling of tobacco in itself is not wrong because of economic benefit and social satisfaction based on people who are smoking but these different players should understand that they are the last resort (Banerjee, 2007). This means that the people should introduce and embrace measures that ensures each individual or group is responsible for the outcome of the any action (Carroll and Buchholtz, 2009). Broad Social View (KGP) According to the broad social view, the responsibility of any organisation surpasses maximisation of profit and hence ensures the society benefit from the organisation (Hartman and DesJardins, 2007). Many organisations aim to satisfy the requirements of the society and environment with the aim of ensuring the business sustains for a longer time (Carroll and Buchholtz, 2009). According to the view, no organisation can succeed without factoring the requirements of the society (Hartman and DesJardins, 2007). For example, the tobacco companies did not consider this aspect when they advertise or how they approach the society (Long, 2007). The ignorance depicted by the tobacco company is that they could continue making profits because they advertise to children who have longer periods of life to live and hence consumer base (Banerjee, 2007; Bruhn, 2011). However, the tobacco industry only concentrates on making profits for the shareholders and do not consider the diseases and other complications that the society would have to face. According to the theory, the tobacco industry should inform the consumers on the risks associated with smoking (Hartman and DesJardins, 2007). This would allow the consumers to make informed decisions on whether to smoke or continue smoking. Such information would have benefited both the society and the tobacco industry because smoking is seen as a luxury (Hartman and DesJardins, 2007). In addition, the tobacco industry and the smokers do not place into consideration the indirect effects of smoking to non-smokers or other people whom could face challenges if complications such as diseases occur (Zu, 2009). Therefore, the tobacco industry should consider the views of the society in formulating and implementing strategies that may affect the society (Hartman and DesJardins, 2007). Conclusion Corporate social responsibility has been embraced by numerous organisations because of the benefits associated with it. In addition, numerous theories and views have been championed by different writers and authors. Milton Friedman addressed the issue stating the aim of any organisation is to maximise on shareholders equity. Such idea presents opportunity to the shareholders to maximise revenue without consideration of the society. However, socio-economic view has presented by Kew Garden Principles opinions that organisations should operate in a manner that harm should not be caused and hence the tobacco industry should operate in this manner. A similar view is shared by the broad social view stating at the end, both the organisations and the society should benefit to ensure sustainability is achieved. References Hartman, L., and DesJardins, J. 2007. Business ethics: Decision-making for personal integrity and social responsibility. California: McGraw-Hill Publishers Zu, S. 2009. Corporate social responsibility, corporate restructuring and firm's performance. New York: Springer Publishers Banerjee, S. 2007. Corporate social responsibility: The good, the bad and the ugly. New York: Edward Elgar Publishing Sun, W., Stewart, J., and Pollard, D. 2010. Reframing corporate social responsibility: lessons from the global financial crisis. London: Emerald Group Publishing Carroll, A., and Buchholtz, A. 2009. Business & society: Ethics and stakeholder management, 7th Ed. London: Cengage Learning Long, D. 2007. Ethics for the real estate professional, 3rd Ed. London: Cengage Learning Monks, R., and Minow, N. 2012. Corporate governance, 5th Ed. New York: John Wiley & Sons Bruhn, J. 2011. The sociology of community connections, 2nd Ed. London: Springer Publishers Velasquez, M.G. 2012. Business Ethics: Concepts & Cases (7th Ed). Upper Saddle River, N.J.: Pearson Education Inc., (p. 316). Read More