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Psychological egoism essay
Corporate social responsibility views
Arguments for and against the concept of corporate social responsibility
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Recommended: Psychological egoism essay
Economists say that the main goal of a business is to maximize its profits. According to the canonical view a business or a corporation has completed the task of the social responsibility with this maximization, always of course by obeying the laws. But the question that arises under this consumption is whether or not a company must be ethical and behave to its employers and its customers as if it was a good and moral citizen; or as the book says `'a good citizen''.
From the theory of the psychological egoism we know that human beings are selfish and self-interested. They care only about themselves, they are not capable for unselfish altruistic actions and they do not care for anyone else unless they have to gain something from them. Of course all these are in the nature of every human being and actions like those are not making people mean. Likewise corporations care about the maximization of their profits and not more those of another company. In the case of the people, they desire to improve them selves and to satisfy their desires. They can achieve that by using different methods, one of which is work ; since the money one earns satisfy his needs and desires and finally it makes him happy. In the case of a company, again money is the answer to the problem since it is the mean for profit maximization. We can say that both people and companies act almost in the same way: by their self-interest, which is the descriptive claim because this is what is happening in the reality.
Based on this descriptive claim now, the canonical view of business social responsibility is trying to identify what we ought to do,in other words it changes this descriptive claim into a prescriptive one. According to this people have to be self-interest and companies ought to maximize its profits by obeying the law. A corporation is swan as a society. A good organized society would take care of its citizens. It would protect them by making a fair distribution of the wealth and capital and would solve the problems with new regulations and laws that will help not only people but companies as well to achieve their goals (Personal and professional).
From all the above we understand that the canonical view of corporation responsibility is against the `'laissez-faire'' theory that says that it would be better if the government did not get involve into businesses.
According to Mallor, Barnes, Bowers, & Langvardt (2010) “modern corporation law emerged only in the last 200 years, ancestors of the modern corporation existed in the times of Hammurabi, ancient Greece, and the Roman Empire. As early as 1248 in France, privileges of incorporation were given to mercantile ventures to encourage investment for the benefit of society. In England, the corporate form was used extensively before the 16th century. In the late 18th century, general incorporation statutes emerged in the United States” (p. 1009).
“There is only one and only one social responsibility of business- to use its resources and engage in activities designated to increase its profits so long as it decides to stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
To supply the wants and needs of a consumer, society entrusts wealth-producing resources to the business enterprise.” (Santayana, George. Is The Tyranny Of Shareholder Value Finally Ending? So before we go into greater detail on the different perspectives related to social responsibility, one might question the meaning of social responsibility. It is generally agreed that social responsibility is defined as the business obligation to make decisions that benefit society.... ...
In business the primary focus is on maximizing returns to owners or shareholders. The manner in which a business conducts itself while attempting to make its profit can be considered ethical or not. For instance, a business that has a positive sense of social responsibility will make some effort to have a positive impact on society, contributing to the welfare of the community in which it operates in some way or another. Unethical practice in business could include the converse of this, where a business is solely concerned about its profit and does not attempt to mitigate the impact of its operations in that society. For example, a mining exploration company that does not attempt to ease discomfort and inconvenience of the people that are displaced by its operations could be considered unethical.
Every business has a social responsibility toward society. That means to maximize positive affects and minimize negative affects on the society. Social responsibilities includes economic-to produce goods and services, that society needs at the price, that satisfy both-business and consumers, legal responsibility-laws that business must obey, ethical responsibilities-behaviors and activities that are expected of business by society, but are not codified in the law, philanthropic responsibilities-represent the company’s desire to give back to society (charietys, volunteering, sponsoring).
As due to globalizations and the growth of internet, the world has become smaller. Any news good or bad spreads immediately. Hence the business needs to be very cautious about their actions. They need to behave ethically for the common good for the society. The companies which ignore the common good have to pay a big price for same such as in case of Nestle. Nestle has lost huge business due to manufacturing and selling unhealthy food products in developing nations. The businesses operate in society and derive all resources from society; hence morally they are responsible towards society. Any company which impacts society in negatively has to bear the strong negative response from the
there are variables that take place at a macro scale that no average business man has any place trying to dictate. Things don't work the same at a macro level as they do at a micro level, even if you're an international oil giant you don't even hold a candle to the economy of the U.S. at large, and all the potentially destructive roads that it can go down. Pure libertarian ideals work at a smaller scale but they've been shown in multiple instances to cause massive inequality and instability in money markets. An overpowered government is dangerous, but a corporation that is allowed to operate with impunity with no incentive for social good (for which of course no profit can be derived i.e. helping a hopelessly poor person gain financial mobility through schooling or allowing them to receive medical care without strapping them down with crippling debt and destroying their credit, creating a vicious cycle and, morals aside,
Milton Friedman presents a compelling argument in “The Social Responsibility of Business is to Increase Profits” by arguing that businesses need to focus only on increasing their profits and integrating social responsibility will only hurt them as a company. Since “only people can have responsibilities” (Friedman 52), Friedman argues that businesses as a whole do not have any type of real responsibilities because there is not a singular person for these responsibilities to fall on. Corporate executives are people as well and may feel they have social responsibilities to society but these “are the social responsibilities of individuals, not of business” (51). In terms of corporations, the businessmen are the ones that hold the responsibility of the company. Friedman argues that the only responsibility these managers hold is to those who own the corporation, the shareholders. If the individuals themselves want to contribute to social responsibility they must do it with their own money in their personal lives, but they should not use social responsibility in
The article “The Social Responsibility of Business is to Increase its Profits” is written by a famous economist Milton Friedman. Friedman in this article implies that shareholders are the main drivers of the corporations and he believes that it is to them corporations must be socially responsible to. The goal of any corporation is to maximize profits and return the portion of these profits to shareholders for investing in the corporation. The shareholders can themselves decide which social causes to take part in rather than assigning a corporate executive to decide on their behalf. Friedman argues that a corporation must have no social responsibility to society because its only concern is the increase profits for itself and its shareholders.
Covey & Brown (2001) “the role of business in society has progressed over the years, from being primarily concerned with profit for sharehold¬ers to a stakeholder and community approach with a focus on corporate social responsibility”
Friedman, M., (2007). The Social Responsibility of Business Is to Increase Its Profits. In W.
...can be an arbiter of business responsibility to society through the application of tax incentives or tax credits. In good corporate governance, the management should be able to meet their social responsibilities, these include making sure that their products are not hazardous to people and to the environment, sharing their profits for the good of the community as a natural person or human being would do, donating to social causes, organizing activities to benefit the community.
When the problem became serious two main views formed: the “narrow” view and the “broader” view, based on different ideas. The “narrow” view is based on the proposition that corporations have no social responsibility and they have only one main purpose, to make a profit (Friedman, 1970). So corporations should remain socially independent and all conflicts must be solved through the individual responsibility concept. On the contrary the “broader” view states that corporations have social obligations as all existing participants of market, persons and entities are tied together and are mutually dependent. So corporations cannot ignore some serious events or problems, which take place, and must help society, as profit is not their single purpose.
A company has an economic obligation. It must earn a favorable return for its stockholders in the restrictions of the law. But, corporate social responsibility means that organizations have also ethical and societal responsibilities that go past their economic responsibilities. CSR needs organizations to develop their documentations of their responsibilities to include other stakeholders such as workers, customers, suppliers, local societies, state governments, international organizations, etc. Ethics could be seen as a fundamental component of individual and group activities at the heart of organizations’ errands.
However, there can be more definitions about what Corporate Social Responsibility can be. For example, Corporate Social Responsibility can be the commitment which is continuing for a business to behave ethically and bring to economy the development to improve the workforces’ of the whole society and local community and their families’ quality of life. Corporate Social Responsibility is also known as the obligation of a company to serve the society’s interest and of course its own. With the help of the Corporate and Social Responsibility, social and environmental concerns companies can integrate into their business and stakeholders operations.