The paper "Analysis of the Various Perspectives of Corporate Social Responsibility" is a perfect example of business coursework. Corporate social responsibility has aroused great public and business debate in its implementation, and application in the current corporate environment (Garriga & Mele, 2004). Organizations are now adopting social responsibility initiatives as part of their vision, mission, and business ethical values. However, many organizations have been criticized for unethical practices and business externalities that do not represent the desires of shareholders, employees, customers, communities and the environment (Bowie, 1995). Despite these drawbacks in the application, corporate social responsibility is strongly favored as a bridge to sustainable companies, healthier communities and environment (Schaefer, 2008).
This essay will discuss and critically analyze the various perspectives of corporate social responsibility. Corporate Social Responsibility Caroll (1979, p. 500) defines social responsibility as the ethical, legal, discretionary and economic expectations of the society to businesses at any point in time. In later years, this definition was refined by McWilliams and Siegel (2001) to mean corporate engagement in voluntary social efforts that goes beyond the legal regulations to include community service, environmental activism, and charitable giving.
Earlier, Friedman (1970) had proposed that the social responsibility of a business is to increase profits while complying with the law, and ethical customs. The author defended the actions of corporate executives to engage in free and open competition as long as they do not get involved in fraud or deception. The arguments of Friedman suggest that businesses do not have to meet their ethical or social objectives if they are not in the interest of shareholders or demanded by the rules of the game (Husted & Salazar, 2006, p.
82). For example, controlling pollution such as CO2 emissions beyond the required minimum or giving to a charity such as contributing supplies after a hurricane. While concurring with Friedman that a business fulfills its true purpose by making profits, Drucker (2008) goes beyond to assert that businesses have to be aware of social impacts of innovations and products to the society. This view is shared by Kolstad (2007) who argues that corporate executives are not freed of other responsibilities and are not only limited to simply maximizing profits.
Businesses may be having the expertise to create a positive impact where the government is unwilling or unable to attend to specific social causes (Brusseau, 2013). The theoretical understanding of business ethics and corporate social responsibility is underscored by stakeholder and shareholder theories (Garriga & Mele, 2004). Under the stakeholder theory, Jensen (2002) and Schaefer (2008) maintain that companies should make an attempt to solve social problems caused by their actions on employees, the general public, suppliers, customers and others. An extreme version of stakeholder theory, legitimacy theory, prevails in large corporations to bear greater responsibility than smaller firms in social ventures (Garriga & Mele, 2004.
For example, Johnson and Johnson exhibit the stakeholders’ perspective by listing the responsibility of the company in the order of stockholders, customers, management, employees, and communities. On the contrary, shareholder theory defends the existence of corporations for the purposes of maximizing the long-term wealth of shareholders legally (Jensen, 2002). In maximizing future cash-flows, it is unreasonable for firms to engage in unprofitable social causes (McAleer, 2003). Steve Malloy, a critic of social responsibility, and a mutual fund manager was quoted admitting that,
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