Ethical Identity and the Allure of Corporate Responsibility - Essay Example

Name: Institution: Instructor: Date: Corporate social responsibility The corporate social responsibility can be defined as the responsibility for businesses to look for material gain and obey the basic principles of daily courtesy (Mulligan, 1986, p. 45). The CSR can also be defined as the duty for the firm owners to bedrock capitalism since without it will make it wither. The CSR arguments appear to be based on two common lines of thoughts that is; they argue that businesses are obligated to create profits within the ethical compliance and minimal legal boundaries and others argue that there is availability of broader responsibilities. The first argument based on creation of profits was brought about by the Milton Friedman whereby he wrote an article entitled “The Social Responsibility of Business is to Increase Its Profits”. The first thing which can be identified in this article and others of the books he wrote is a convincing statement on the main responsibility for businesses, which is to engage in activities made for increment of profits and also maximize the use of the available resources for gaining more profits so long as the rule of the game is followed. However, Friedman argument does not have any limit since it states that the businesses should prioritize profit maximization and the rest follow and the lack of limit might be misleading. Other of the responsibilities include; they should avoid facing the lawsuit by following rules that govern them which would make them to be trustworthy, firms should follow the ethical customs (Roberts, 2003, p. 89). However, the above mentioned responsibilities of businesses which are under CSR greatly benefit the organizations than how the stake holders and society benefits from it. The arguments on how organizations benefit from the social corporate responsibility include: - The managers are usually employees of the shareholders yet they spend money in areas where profits will not be maximized whereby the shareholders are also taxed without their awareness (Neimark, 1995, p. 32). At first, we will realize that according to the CSR, the stake holders hire managers to be their agents purposely to enhance an increment in their wealth. This can be considered as ethical responsibility given to them because the shareholders have ethical rights to property which they have acquired as they invest in the firm. These moral rights create a responsibility on managers and directors of the organization not to violate it by stealing from the property of the stakeholders of the organization through e.g. giving to charity. This is because the position held by the executives is distinct hence the social responsibility is also distinct from serving as a mediator between the customer and the stockholder. However, the use of money in the wrong way by the managers shows that the businesses or organizations are benefiting from the corporate social responsibility since in most cases they steal it hence the stockholders of the organizations benefit very little (Neimark, 1995). Moreover, the society also becomes a victim of less benefits from CSR whereby the organizations might decide to increase taxes on the products they market hence greatly benefit from it so long as they are doing it while governed by rules of corporate social responsibility. The unexpected and not easily discovered taxation by the agents on their stakeholders happens when the managers of the organizations spend money differently from the way they were expected to spend it (Verbos, 2002, p. 245). The use of money which belongs to the stakeholders by the managers in the wrong way without their knowledge is the unauthorized taxation on them and it is different from imposing taxes and planning for the proceedings of spending the taxes of which it is the right thing to do. Moreover, there are organizations which pursue profits whereby, they eventually end in collective utility maximization. In this case, the interest of society and that of firm is facilitated by the utilitarian approach. The attention of the society is generally attracted by the interest of business firms in providing services to the society. However, the managers usually have the right to decide for the society such as decisions on providing training to the unemployed or pollution hence the interest of the society is protected by the persons qualified for the social decisions made (Weaver, 1999, p. 42). However, the officials willing to give charity are entitled to use money from their own pockets whereby it can be greatly acceptable rather than, practicing it by the use of the money provided by the stakeholders to run their businesses. The activities involving society and the managers by support of the organizations money should not be practiced especially if under CSR since most of the executives doing this pretend to be interested in their responsibility in the society yet they have self interest. Another argument is based on the fact that the government is given the right to make policy decisions. The government usually has the power to make decisions on which rules should be followed by the organizations in the country and its people. The policies made are supposed to be observed whereby if they are violated the organization may face the lawsuit. For example the taxes should be paid by both the society which involves the stakeholders of some organizations and the organizations themselves (Neimark, 1995, p. 65). However, the organizations greatly benefit from the corporate social responsibility because through the top managers, the organizations might pay fewer taxes than the required thus the organization benefiting. Despite these benefits which are achievable by the organizations through the corporate social responsibility, the stakeholders might not benefit at all because this is done secretively by the managers and the excepted amount of money goes to them. They can also decide to the stakeholders a taxation receipt which shows more taxes than the real amount they were taxed thus stilling from them. In this case the stakeholders do not benefit through the corporate social responsibility since the organization is acting irresponsibly (Weaver, 1999). If a firm maximizes wealth of shareholder, it creates its opportunity to engage in broader activities of social responsibilities. Some of these activities include; sustainability, business ethics, corporate citizenship and management of stake holders. This means that firms are not only made for making profits but also the above mentioned responsibilities are part of them. Business ethics means the rules set for businesses and as a social responsibility; businesses should be responsible for the services they offer to the people in the society (Cosans, 2009, p. 78). If they maintain good services, they will benefit very much since they will be able to attract more customers to purchase their products. Sustainability is also important to organizations since if the organizations’ high quality of the products is not maintained at that level if not improved, the organization might end up losing its customers hence fewer profits are made. However, the Corporate Social Responsibility rules have made many organizations keep their standards high thus facilitating more profit generation for the organization. In addition, some of the arguments which support the broad Corporate Social Responsibility involve consideration of the society and stakeholders’ rights which are violated by a large number of the organizations. However, when the broad CSR is allowed to take place these issues which have been taking place are expected to stop. Some of the happenings include the changes expected on the game rules or the rules governing the society. The rules based on the society and also those based on the businesses should be set in a way such that if they are put in to practice they do not cause a negative impact on both the businesses and the society. If this is practiced there will be almost equal benefits to both the organizations and the society. If the corporations claiming citizenship in the society and it is granted to them, they should ensure that as they enjoy the Corporate Social Responsibility benefits they have considered the non-owner shareholders in the organization by ensuring that they don’t steal from them through charity work and this is applicable if they are faithful to the shareholders. They should also work for the shareholders willingly as their agents. The Corporation of corporate social responsibility should create a chance for the shareholders to go beyond the targets made. This is because of the upcoming movement on social and ethical responsibility whereby the activities of corporate social and ethical responsibilities are interpreted. The shareholders have obligations which are ethical with respect to the firms they own. The shareholders have the responsibility for ensuring the assets of the firm are used in the right way but in most cases this responsibility is violated since they hand in their responsibilities to other people who may not be able to handle them in the right way. The managers are able to make decisions under uncertainty issue thus they are also qualified to create policy decisions for the shareholders whereby their firms are affected by those decisions. To avoid these effects on the firms the decisions should be made by the shareholders since it is their responsibility (Mulligan, 1986, p. 56). The organizations are responsible for giving support firms in the society hence making difference. The CSR should consider the situation whereby the government in which the organization is situated at is unable to protect the citizens’ rights due to lack of knowledge or even when it is unwilling to do so. The consideration is done through inheritance of more ethical obligations purposely to protect the share holders. However, I support the statement that corporate social responsibility benefits organizations more than it does to the society and shareholders because, as I have disused above, managers of organizations act as agents of shareholders since they are their employees hence that is a pure interpretation of corporate social responsibility (Schwartz, 2012, p. 80). The society is facing challenges because the corporate social responsibilities are not being observed since there is a lot of fraud and deceptions in the firms which is pulling back their growth. This is due to lack of enough ethical obligations among the people in the society. For equality, the actions which are termed as unethical to the people in the society, they should also be unethical to the organizations since equality is granted equally to citizens as well as the organizations. In addition, the shareholders should always be made accountable to any action taken by the managers since they work as argents so they are also responsibility. This would help in preventing the managers from exploiting the shareholders of the organization through stealing which they do it indirectly (Verbos, 2002). The assets in the organization would be taken care very well if the employees in the organization realize that the shareholders of the organization are very strict through their investment. Through this they would start experiencing great profits from the organization. Moreover, the managers should avoid actions which are unethical hence should avoid giving reason for behavior which is not ethical especially due to notions which are misguiding people thus making them think of business environment as a place in which the ethical standards in the society are abrogated in order to serve the objectives of finance principals (Weaver, 1999, p. 67). Organizations, shareholders and society need to be transparent to each other thus enhancing great and equal benefits to the three parties and also enhance competition between firms or organizations. In addition, the ethical criterion shows that there should be utilitarianism, the shareholders morality and trustworthiness as components of honesty which would improve equality in corporate social responsibility benefits (Roberts, 2011, p. 21). In some countries there is a lot of corruption. In this type of countries the citizens are not protected by the government since it only focuses on the issue on maintenance of control and order in the country. The business organizations may decide not to carry their businesses in that country or to do businesses in them if there is any critical engagement in the country such that they have as minimal threshold of society as possible thus the human rights being maintained. The shareholders are supposed to be given a chance to make their own decisions directly by their firms and it would not make much profits. This would mean that even if the organization makes a profit it will be very little. During the colonial times, corruption in countries would lead to fewer benefits of corporate social responsibility since when the government collect some amount of money from the people in the society in the wrong way, they do not return the money to them even after they find them innocent of what they were being charged as punishment (Cosans, 2009). Also the government that subsidized the railway roads and other small investors were not given the profits they made but the financiers and executives were given the profit and this is a clear indication of corruption. This was due to the concentrated wealth hence power comes due to wealth. Social scientist have done some research on the causes of corruption and all the blame goes to the wealthy persons since they have money and power for bribing hence also corrupting the humbled persons. However, instead of the blame befalling the wealthy people they blame the persons serving in the organization. Corporate strategic responsibility has helped Pack Co to undergo tremendous growth where it saw an increase of million dollars since its formation in 2003. Since its formation as a private company, Pack Co increased its employees up to 1800 working in more than twenty cities in New Zealand and Australia (Verbos, 2002, p. 76). It had both industrial and retail customers with many sales helping over beverage and food markets in many countries. Its growth was catalyzed by a series of antagonistic acquisitions and since its inception back in 2003, and has been acquiring many packaging companies making it a leading industry wide trend in consolidation. Its group of managers identified a good story in environmental responsibility enabling them to see instrumental pursuit profitably enabling its staff to grow in moral. Its managers ensured that they delivered continuous environmental responsibility while they celebrated a profitable performance constantly. Many managers liked their stories but minority argued that being more honest needs simple emphasis on financial benefits emanating from environmental savings (Roberts, 2011, p. 43). Though corporate responsibility here was initially created to serve financial purposes, in the face of management these purposes could more enthusiastically be justified since they were achieved via environmentally responsible conduct. Logic of causality would then be flicked so that profit would be viewed as an engine of Pack Co’s moral pursuits. Different quotes expressed a widespread belief amongst top managers that without making profit there is absolutely no ability to assist the environment (Verbos, 2002). Beyond the material, financial reimbursement that accrued from competitive and cost advantages of Pack Co’s clinch of environmental responsibility, their environmental strategy brought by means of its symbolic benefits (Weaver, 1999, p. 87). Through categorizing with the Chairman’s mission of environmental responsibility, top management gained a kind of moral lucidity that reconciled the inexorable pursuit of improved monetary returns with societal anxiety for environmental responsibility. Amusingly, this response is compassionate not just to employee’s lack of acceptance of management strategy, though also to existing administrative views of responsibility. When the problem stands not in managers’ abandoning their responsibility for workers, but slightly in a need of worker’s understanding of the significance of waste in the environment, followed by the failure of administration responsibility for employees might thereby be reframed extra benignly as a collapse of management communication (Mulligan, 1986, p. 23). With this result of this correction of the survey outcome was the growth of an action arrangement which included the instigation of an ‘awareness movement’ involving a placing of the Pack Co technique, and the improvement of better corporate social responsibility documentation. This ‘awareness movement’ sought to educate employees about the realization of corporate responsibility within Pack Co (Cosans, 2009, p. 46). A key characteristic of the movement, communicated through a arrangement made to personnel at all levels in the organization, was its spot on what was now explicitly obtainable as Pack Co’s ‘Noble Aim’. A proliferation of corresponding documentation was also formed and posted on this company’s website, which endeavored to reassert the link between corporate social responsibility in addition to the ‘‘Pack Co way’’. This included the different assertions of corporate sincerity. This means that corporate responsibility helps Pack Co as an organization compared to workers and stakeholders (Bannerjee, 2008, p. 45). If corporations have the authorized right to expand the social and ecological costs of its dealing activity with power, its responsibility to surrounding larger community becomes less clear and absolutely not one directed in law in the new system of incorporation? As the property rights in the private ‘representatives of transportation’ has to be treasured, the ‘necessary externalities’ ought to be dealt with rather than by the corporation other than by someone else. Present-day notions of social corporate responsibility and corporate nationality that install the ‘legal fiction’ dispute of the company in order to construct a legal character for the artificial company’s person run the peril of conflating citizenship including personhood (Bejou, 2011, p. 71). A corporation could not be a citizen in a way a person could. A corporation can though be considered an individual so long as its legal rank is concerned. Current ideas of corporate citizenship vary with a citizen arguing a business corporation could not be a person (which a company can be but simply as a legal benefit to the organization). Therefore, ‘fictional person hood is not a resonance basis for managerial benefits since theories of social corporate responsibility that adopt the stakeholders approach will be liable of limited definition of the responsibility scope. The problem is instituted in the issue of multinational organizations where there no legal or constitutional basis for multinational organizations to become profitable (Weaver, 1999, p. 98). References Bannerjee, S., 2008. The Good, the Bad and the Ugly’, Critical Sociology, . In: Corporate Social Responsibility:. s.l.:s.n., pp. 51-79. Bejou, D., 2011. Compassion as the New Philosophy of Business’,. Journal of Relationship Marketing, , Volume 10, pp. 1-6. Cosans, C., 2009. Does Milton Friedman Support a Vigorous Business Ethics?’ . In: Journal of Business Ethics,. s.l.:s.n., pp. 391-399. Mulligan, T., 1986. A Critique of Milton Friedman’s Essay “The Social Responsibility of Business Is to Increase Its Profits’’’,. Journal of Business Ethics,, Volume 5, pp. 265-269. Neimark, M., 1995. Accounting, Auditing & Accountability Journal,. In: ‘The selling of ethics: The ethics of business meets the business of ethics’. s.l.:s.n., pp. 81-95. Roberts, J., 2003. Organization,. In: ‘The Manufacture of Corporate Social Responsibility: Constructing Corporate Sensibility’, . s.l.:s.n., pp. 249-265. Roberts, M. B. J., 2011. ‘All in the Mind? Ethical Identity and the Allure of Corporate Responsibility’. Journal of Business Ethics, Volume 101, pp. 5-15. Schwartz, M. &. S. D., 2012. Business and Society Review. In: ‘Should Firms Go “Beyond Profits”? Milton Friedman versus Broad CSR’. s.l.:s.n., pp. 1-31. Verbos, A. K. G. J. A. F., 2002. The positive ethical organization: Enacting a living. Journal of Business ethics, Volume 76, pp. 17-33. Weaver, G. R. T. L. K. &. C., 1999. Management commitments, external pressures, and corporate ethics practices. Academy of Management Journal,, Volume 42, pp. 539-552. Read More