The paper 'Corporate Social Responsibility and Business Ethics' is a perfect example of a Management Literature Review. The issue of corporate social responsibility (CSR) has been under debate for a period of more than 50 years. A recent analysis that was done by Secchi (2007) indicated that the definition of CSR has been changing both in practice and meaning. The view of CSR that was limited to philanthropy then shifted on the relationship between the business and the society, especially referring to the corporation contribution to finding solutions to social problems. According to Lee (2008), the current CSR represents a concept where business organizations put into consideration the society’ s interests by being accountable to the impact of the business activities on employees, customers, shareholders, suppliers, communities, environment, and other shareholders.
Based on this definition, it is clear that organizations need to comply with the laws and take the initiatives voluntarily to improve the well-being of the local community, employees, and the society at large. Thus, CSR involves strategies that corporations conduct business in an ethical and socially friendly manner. Activities of SCR include the development of organization-employee, relationships, partnering with the local community, environment protection, and sustainability among others. This article is aimed at discussing utilitarianism as the most useful theory for guiding decision making in a company, the company’ s aim of making a profit rather than addressing social responsibilities, and the code of ethics as the most effective technique of instilling ethical behavior in within a company. Theory of utilitarianism and decision-making According to Secchi (2007), the theories of utilitarianism can be divided into two: the corporation’ s social cost and the idea of functionalism.
Based on CSR, the social cost theory the non-economic forces of the corporate influence the socio-economic system in the community. Thus, this theory suggests that the corporation is required to accept the social rights and duties to participate in social cooperation. The functional theory advocates that the corporation is supposed to be part of an economic system where profit-making is one of the goals. A company is seen as an investment where this investment must be profitable to both stakeholders and investors. Thus, CSR serves as a defense tactic against the external attacks of the industrial system because there needs to balance social objectives and profit-making for an equilibrium economic system. According to Frederiksen (2010), the ethical principle of the humanitarian theory is to determine if the operation of a business would affect any stakeholder.
By doing this, it will be able to make decisions based on what can be regarded as morally right action, that is, the action that will bring the overall positive effects on every stakeholder. This means that the stakeholders will examine every aspect in order to evaluate the potential positive and negative outcomes of the organization's operations.
If positive outcomes outweigh negative ones, then the activity can be executed and vice versa. Based on the above definition, it is clear that utilitarian theory drives the organization towards getting the possible outcomes in regard to its actions. This means that the companies that make decisions using utilitarian theory and CSR leading to the best outcome. Thus, based on this theory a company makes a decision in regard to what is the greatest possible good for the community by satisfying the shareholders, suppliers, employees, and customers as well as observing the aim of the company of making a profit (Angus-Leppan, Metcalf, & Benn, 2010).
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