After reading Kreitner’s (2008) Chapter 3 and the case study at the end, there are several reasons Chiquita has done the right thing in cleaning up their act. Corporate social responsibility is defined as “A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources” (BusinessDictionary.com, n.d.). The arguments for corporate social responsibility evident in the case of Chiquita are (1) that social action will prevent government intervention and (2) a better society means a better environment for doing business.
An example of social action preventing government intervention is how Dave McLaughlin worked with the non-profit environmentalists Rainforest Alliance to gain their insight and suggestions. Instead of working against them, McLaughlin worked with them (Kreitner, 2008).
The farm workers who worked long hours in dangerous and dirty conditions can probably vouch for the fact that Chiquita made an investment in society by creating cleaner and safer working environment for its workers. The reduction in pesticides resulted in healthier workers and a $5 million dollar savings (Kreitner, 2008).
As Standard Oil Company’s founder, John D. Rockefeller passed out dimes to hungry children over one hundred years ago, “he believed he was fulfilling some sort of social responsibility” (Kreitner, 2008, p.55). Rockefeller may have been the pioneer of enlightened self-interest. When Chiquita partnered with the non-profit environmental group, Rainforest Alliance, to clean up its farms and working conditions, Chiquita was ultimately helping itself by helping its brand image and its own bottom line, not corporate philanthropy with a non-profit. This form of enlightened self-interest is different from other partnerships with non-profits because Rainforest Alliance “does not accept donations from companies that it certifies” (Kreitner, 2008, p. 71).
Chiquita helped its brand image; however, it was not helping Rainforest Alliance’s bank account. In enlightened self-interest, also loosely called cause-related marketing, money for the corporation and the nonprofit is the goal. “Cause-related marketing is corporate America’s lexicon for working in financial concert with a charity. It is marketing that ties a company and its product to a cause.
"The Importance of Cause Related MarketingA Cadbury Schweppes Case Study." What Is Cause Related Marketing. The Times 100 Business Case Studies, 2013. Web. 02 Jan. 2014.
In most cases, profits and social welfare are at odds. In such a case, business executives being answerable to shareholders are likely to focus on the profit-making aspect of the business rather than going against the interest of their shareholders by promoting social welfare at the expense of profits. In addition, research shows that companies actively involved in Corporate Social Responsibility efforts are more likely to be targeted by activists (Kress, 2011). In fact, it has been established that many companies initiate corporate social welfare projects when they stand to gain from those projects. For example, automakers resulted to creating fuel-efficient vehicles when they became profitable; similarly, energy conservation became an important CSR activity when the cost of energy became very costly. As such, the companies are benefiting their society as they follow their own
Throughout Dan Pallotta’s TED Talk he argues that the discrimination against nonprofits is limiting their ability to change the world. He believes that nonprofits operate under one rule book, while for-profits operate under another. And the book for-profits are encouraged to operate under, allows them to attract the best talent, spend money to make money, take risks, pay dividends, and take their time returning profits to investors.
Perhaps Friedman’s most prevalent justification for dismissing social responsibility from business arises from his view on ethical spending. He believed that it was unethical for businessmen to spend other people’s (shareholders) money on other people (i.e. the community), and that transactions of such a nature should be left to government and corporate social responsibility programs. This line of thinking reinforced what is known today as the shareholder primacy model, whereby the primary moral duty of any corporation is to serve the shareholder’s interests, subject to some moral minimum (Smith, 2003). Friedman held that it was the shareholders money being spent, not the corporation 's, as corporations were merely fictional entities. Numerous
Walter, F. and Bruch, H. 2005. The keys to rethinking corporate philanthropy. MIT Sloan Management Review, 47 (1), pp. 49--55.
Introduction: The situation of Chiquita Brands International is serious. Bananas, the main source of revenue from Chiquita, cause an ethically questionable situation. Bananas are a very popular food in Europe and the United States because they are inexpensive and convenient. Especially the price of the fruit can only be provided because the bananas are grown in large plantations along the Equator. These large plantations cause social and environmental problems.
Since the onset of the industrial revolution during the 19th century, humanity has rapidly stripped the earth of its natural resources and dumped countless byproducts into our environment. While 97% of climate scientists agree that climate change is real as well as man made (Proceedings Of The National Academy Of Sciences) there is still debate as to the validity of this in the public debate. Philanthropic individuals and organizations play an important role in influencing public opinion as well as directly conserving at risk land and species in addition to fighting projects that could have disastrous environmental impact. These individuals play a major role in providing funding for environmental groups due a general lack of available government subsidies for the issue relative to subsidies provided for many other issues. (Kimble Pg. 2) These philanthropists come from varying sectors including finance, alternative energy, high technology, broadcasting, development and real estate.
Other types of non-profit organizations founded by individuals such as foundations should exist and should be allowed to operate without the burden of taxes. Whatever the motives of their owners were to found them in the first place, they should not get in the way of the much greater possibilities these foundations offer when it comes to helping society in numerous ways. Together with governments’ efforts to increase the average living standard, and companies’ effort when it comes to reducing pollution, we are on a good path of preserving our planet and securing a safer future for the future generations.
For many organizations and companies, philanthropic engagement has been strictly a business exchange in which corporations give money, and nonprofits give reach. Unfortunately, this does not necessarily mean that this exchange will produce results.
As a part of overall business strategy, organizations undertake philanthropic efforts as a means of marketing and promoting social responsibility. As a tool that business executives can utilize to drive corporate goals, philanthropy not only helps to support communities, but also empowers employees and creates excitement in the workplace towards a common purpose (Muller, Pfarrer, & Little, 2014). Philanthropy is also big business, particularly in the United States of America. Through a survey conducted on 2013 donations, the Aluminum giant Alcoa and its foundation donated 12.1% of its profits, equating to $39 million dollars. Conversely, Walmart donated only 1.4% of its corporate profits, but this amounted to
Chiquita 's corporate responsibility (CR) program is no exception and indeed creates conflict between the stakeholders and the shareholders. That is natural when a corporation takes new action of any type. In this case, an ethical action is being placed in the interest of stakeholders. Explaining this to shareholders is important which displays a new transparency attitude of being upfront with how the company is trying to do good to their stakeholders. It is part of balancing the two sides of the conflict.
While the concept of an individual having responsibility is commonly recognized, modern views have lead to the emerging issue of corporate responsibility. Business Directory.com defines corporate social responsibility as, “A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.” But such a concept has been much disputed since at least the 1970’s.
Both of these areas are the lifeblood of the company, and any benefit to them should not be overlooked. Before a company can become proficient at corporate social responsibility, they must first know its definition. Corporate social responsibility is defined as actions that can be taken by a company to ensure they are adhering to ethical and social responsibilities of the day. These corporate social actions are self-regulatory, as a company strives to adhere to guidelines while also going above and beyond being a Good Samaritan in the business world (ECA, 2015). This can place certain businesses at the forefront in customers mind because of the example they are setting in the marketplace. A company going above and beyond the call of duty to work towards a more philanthropic approach in the surrounding community is a perfect example for corporate social responsibility. Going deeper into the definition, corporate social responsibility acts like a “double bottom line” for a company, as they strive to achieve financial goals, but also achieve their social mission out in the community. Once a company is aware of what the concept of corporate social responsibility is, they can now implement it and start to reap the many benefits of its
Corporate social responsibility is an altruistic deontology established as a self guiding framework structured to establish trust across a range of stakeholders. The intent to uphold corporate social responsibility (CSR) within a business is noble. However, considering numerous ethics violations documented by the U.S. Securities and Exchange Commission, U.S. Federal Trade Commission, and U.S. Department of Labor, the loosely guided CSR deontology appears to be a public relations front for capitalistic extremists who caress their egos for greed. Consequently, thousands of stakeholders lose their jobs, their retirement, and their families respective to ill business practices similar to the documented cases of Ford Motor Company 's Pinto, Arthur
Corporations that place an importance on corporate social responsibility usually have an easier experience when dealing with politicians and government regulators. In compare, businesses that present an irresponsible disregard for social responsibility tend to find themselves fending off various reviews and probes, often brought on at the assertion of public service organizations. The more positive the public insight is that a corporation takes social responsibility seriously; the less likely it is that innovative groups will launch public campaigns and claim government inquiries against it.