The debate about corporate social responsibility may be considered in terms of two
extreme positions: the arguments for and against. We shall consider the latter first,
since this is based on the prime objective of the organisation and the case for
accepting social responsibilities needs to refute that argument.
(a) The Case Against Accepting Responsibility
This takes as its basic premise that organisations exist to serve the interests of their
owners. In the case of private-sector companies, their purpose is to provide a return on
investment, which is realised through making profits and ensuring growth. The
owners may be prepared to trade off some element of their expected return to meet the
interests of other stakeholder groups where that will further the ability of the
organisation to continue making profits and growing. However, there can be no
further obligations beyond that, save to act within the law. Any further actions which
are designed to serve the interests of other stakeholder groups, including those of
society, will use resources which could be devoted to developing profitability and
growth.
The argument is not, though, based purely on self-interest. Organisations will always
acknowledge their legal responsibilities and act within the law. The law is enacted by
democratically elected governments who are open to representations from many
different interests in the process of determining policy on legislation. Thus, it can be
argued, the concerns of society are encompassed in the laws of that society. In acting
within the law, therefore, the organisation is fulfilling its societal obligations by
complying with those laws.
Further, exactly what is required of organisations in terms of their acting as 'good
citizens' is unclear. The management and shareholders are not equipped to make such
decisions themselves, and in the absence of any agreed alternative, the law can be
taken to represent what is required.
Finally, there is a strong case for asserting that the concept of 'morality' on which
social responsibility is based refers to the response of the individual to the conditions
of society and derives from such further concepts as conscience. Organisations, as
entities, cannot be said to have a collective conscience or morality. Rather the
obligation to acknowledge social responsibility rests with the individual shareholders
and managers of the organisation, who may use the rewards they receive from the
organisation as they see fit in developing the collective interests of society.
(b) The Case for Accepting Responsibility
The basic premise here is that organisations cannot be divorced from the communities
with which they interact. They receive inputs from their environment and expect to
earn profits from sales of their outputs into the community. They must, therefore, also
acknowledge the legitimate claims of those communities and the environment: claims
that they should not be damaged, and should indeed be helped help in their
development.
The interests of society cannot be expected to be completely covered by the law. At
the very least, there is a delay between common acceptance of a need for obligations
to be created and the enactment of those obligations in legislation. On the wider level,
there are many areas of concern in which it is not felt appropriate for governments to
intervene or for which they lack the necessary resources. In these areas, it is case of
voluntary action on the part of individuals or groups, and organisations have an
obligation to at least come to a view on whether they should support particular causes.
Government policy in certain areas establishes expectations of what organisations
should do, but stops short of compelling them to do it. Using the arguments
previously advanced, this is clearly an expression of the collective agreement of
society and should, therefore, be complied with.
The amount of resources allocated to fulfilling social responsibilities is unlikely to be
so great as to affect the prospects of the organisation and certainly not to significantly
affect the level of return which shareholders may receive.
Finally, meeting social obligations may be seen as a form of enlightened self-interest.
Under this argument, accepting social responsibilities may contribute to the
development of sales by enhancing the reputation of the organisation. Being seen as a
good citizen may make good business sense in a society where consumers are more
willing to support such organisations then others which do not have that reputation. It
may also enable the organisation to influence the conditions within which it operates:
for example through participation in local or national decision-making bodies which
shape policy on, say, education and training. This, perhaps, is the most persuasive
argument in rebutting the opposite position.
Titany answered the question on November 9, 2021 at 06:02