Corporations Can Never be Moral Entities - Coursework Example

Corporations Can Never be Moral Entities Name: Institution: 24th August, 2013 Introduction Over the past three decades, ethicists in the business arena have grappled with questions in regard to whether businesses or corporations can bear moral responsibility as collective entities. It is not clear as to whether Corporate Social Responsibilities should be legally imposed or be regarded as a choice that the individual corporations have to make. A more direct approach has been given to the ongoing debate that is hosted in the journal of business ethics; first they have made attempts to come up with a list of the traits that something has to posses in order to be considered as a moral entity, and then studying the nature of corporations to establish whether they posses each of the required characteristics. To this extent, however, researchers have come up with little consensus in regard what the necessary features are and similarly less agreements over whether corporations are in possession of those features. Opponents and proponents of corporate moral responsibility (CMR) have made stances that are irreconcilable, and the debate is continuously becoming hotly contested. As a result, the notion of corporate moral entity has increasingly become rather knotty. This essay makes use of arguments developed by ethical theories, namely, utilitarianism and Kantianism to come up with a viable resolution in regard to whether corporations should be forced to meet their responsibilities to the society through legal systems or be left to make independent decisions as to whether they should or should not get involved. However, this paper seeks to prove with the help of cited evidences and wide ranging research, that legal enforcement of corporate social responsibilities on corporations is wrong. It begins by drawing clear definitions of the terms ‘moral entity’ and ‘corporate social responsibility (CSR)’ respectively and then developing the link between the two in regard to corporations. Further, the fundamental ethical theories that are critical to this discussion are defined and used extensively to establish rational reasons as to why corporations can never be moral entities, in line with the conclusion. Discussion What are Moral Entities and Corporate Social Responsibilities and how do they relate? A Moral Entity, or other ‘legal entity’, is a corporation, or in other scenarios an individual, that has a legal standing when looked at in regard to the definitive boundaries of law. In this sense, a legal or moral entity has a legal ability or capacity, to enter into bargaining activities, make entries into agreements or contracts, assume responsibilities, acquire and pay back debts that are due, make legal pursuits or sue and alternatively be sued under its own legal bindings (in rights), and to be held accountable or responsible for its actions. This definition suggests corporate autonomy or self-governance where companies reserve the rights to make decisions or choices as they deem fit. This is commonly known under business practise as corporate citizenship (Banerjee 2008, p. 52). In contrary, Corporate Social Responsibility refers to the relationship between business and society (Banerjee 2008, p. 52). According to Banerjee (2008, p. 52), “whereas the primary relationship between business and society has been and continues to be an economic one, rising public concern about the social and environmental impacts of economic growth and increased legislation in areas of social welfare and environmental protection have led many corporations to assess the social and environmental impacts of their business activity.” This confirms the fact that CSRs are specifically activities or promises that a corporation owes or is expected to owe its stakeholders, mainly the community that it serves (Singer, 2008, p. 263; Visser 2010). When corporations are now looked at as moral entities in regard to corporate social responsibilities, a more definitive relationship is created in that corporations can only exist as moral entities if they possess the capacity or right to come to a decision as to which legal contracts or promises should they get into or make respectively with reference to the corporate social responsibilities that they may expected to meet, either under law or an expectation from its stakeholders (Banerjee 2008, p. 59). Corporate Social Responsibilities are often meant to better the welfare of the society under which a corporation is located or its internal stockholders such as directors (Banerjee 2008, p. 59). These activities may be owed to various segments of the society that include consumers, competitors, communities, governments, employees and trade unions, and shareholders and creditors (Weyzig 2009, p. 419; Benerjee 2008, p. 60). These corporations, according to Weyzig (2009, p. 419) can meet these responsibilities by avoiding, amongst others, the breach of contracts, the employment of minors, supervision of boards by non-executive directors, respecting community rights and minimising waste generation (Lamberti 2008, p. 156; Visser 2010). Ethical Perspectives Ethics can be used in the business arena to issue guidance that pertains to addressing non-market issues, which include safety of products, employment practises, environmental regulations or policies and product safety (Masaka 2008; Banerjee 2000). In this regard, it is evident that issues that are associated with ethics and corporate social responsibility can be used as an alternative to, or similarly pre-empt, interventions and regulations that may come from the government (Banerjee 2008; Weyzig 2009, p. 419). Moreover, while ethics is looked at as a feature that is concerned with moral standards and normative issues within the business setting or environment, corporate social responsibility contrarily refers to or is looked at as a management idea under which companies or corporations integrate social and environmental issues or concerns in their daily business operations and relations with their stakeholders (Banerjee 2008; Masaka 2008). Therefore, ethics very much more deals with issues that determine how businesses and their managers should behave to promote the welfare of the society in which they operate (Masaka 2008). There are very many ethical perspectives that have been used before to answer questions pertaining to whether businesses are moral entities or not. These ethical theories include utilitarianism perspective of argument and the moral rights perspectives of Kant and Rawls (Crane & Matten 2007). However, utilitarianism principles and Kant’s theoretical perspectives are given a close consideration in this particular essay. When choices are made within the society, the most common question that is often asked is, ‘was it the right decision (Crane & Matten 2007)?’ For centuries, scholars have struggled with the idea of the morality of actions executed by corporations, and this dates back to 1950s (Masaka 2008). This has brought about various theories in regard to the nature of these actions (Howell 2010). Looking upon to utilitarian principles, the end of an action executed by a corporation justifies the means, and these actions are judged based on the results, not on the motives or intentions of those actions (Howell, 2010). In a contrary opinion, the antithesis of the Utilitarian principles is the ethical theory of Immanuel Kant. In regard to Kant, the end results of actions executed by corporations are not important in determining whether these actions are wrong or right (just or not), but motives or self interests define everything (Masaka 2008, p. 18). In addition, there are very strict views by Kant concerning the process of making these judgements. As such, these two theories narrow down to applying the basic principle that governs ethics, which is determining whether an action is right or wrong based on a set of societal values or beliefs (Carroll 2004). In the business society currently, utilitarianism has become part of the game played. The fundamental philosophy of utilitarianism, the notion of the utmost good for the greatest quantity, is one of the fundamental building blocks of the self-governing systems (Banerjee 2008, p. 60). If a corporation is guided by the principles of Utilitarianism, it disregards the intention, motive or purpose involved in an action or decision that it executes (Carroll 2004). Utilitarian corporations strive to separate the action from the actor, and look at the greater picture over the corporation. Strict followers of Kant, amongst others, oppose this kind of approach, and suppose that in this system, marginalised groups and individuals are many a time overlooked and sidelined (Masaka 2008, p. 18). According to Kant’s argument, any action executed by a corporation cannot be considered just or moral but for moral intentions or motives (Masaka 2008, p. 18). For each of these philosophies, the question of whether a corporation should be legally ‘forced to undertake a corporate responsibility’ is an intricate part of the theoretical system (Alzola 2008; Banerjee 2008). For the Utilitarian, executing decisions that benefit as many members of the society as possible, in essence, a decision that causes the largest amount of benefit or profit to the community or an organisation is considered a just action (Barenjee 2008), thus a fundamental argument for proponents of the idea that corporate social responsibilities should be imposed merely for the reason that they serve to benefit the stakeholders of the organisation (Masaka 2008, p. 18). For instance, if a corporation feels that cleaning a river based on environmental regulations would improve how the society views their public image, then that is reason enough to execute this responsibility since they would benefit from it (a greater good). For Kant, the only moral action or decision that a corporation can make is the one that is done exclusively because of responsibility or liability (Masaka 2008, p. 18). He also makes a clear distinction between motives, indicating that a corporate action or decision can be “in agreement or concurrence with duty” and still turn out to be immoral (Masaka 2008, p. 18). A good example of this would be if a corporation owes money to a bank. If the corporation pays back the money simply because it owes it, then Kant would say the action is moral (Masaka 2008, p. 18). But if the corporation paid the money to the bank because it feels it would have another opportunity of borrowing more money later on, or that their public image would be negatively affected, Kant would regard its action as immoral (Masaka 2008, p. 18). This is a clear contrast to a Utilitarian analysis of the same scenario. A Utilitarian would suppose that either way, the money owed to the bank was paid back. The bank received what they wanted, and the corporation (borrower), whatever its motives, protected its public image and met its obligation or promise to pay back the money (Masaka 2008, p. 18; Howell 2010). Looking at the example given above, the bank is considered part of the society which the company owes a contract to pay back a loan. This qualifies this as a corporate responsibility. When the company pays back the loan simply because it aims at protecting its public image, then according to Banerjee (2008), the company is meeting a self-interest which is not a greater good to the society. In this given sense, it would be immoral to impose a corporate social responsibility on the corporation because it is serving the interest of the stock holders at the expense of other segments in the society. Thus corporations use corporate social responsibilities to meet their own objectives (Masaka 2008, p. 17). Proponents of the idea that corporations are legal entities argue that corporations have the capacity to act because they can commence secondary actions taken by individual representatives (agents) of the corporation, as authorized by the corporation, as indicated in the corporate charter and by-laws, as construed and amended by the corporate management, market forces and board of directors (Masaka 2008, p. 17; Shaw, Barry, &Sansbury, G 2009). These are actual actions of the corporation because they cannot be re-described in regard to the actions of components (Masaka 2008, p. 17). Therefore corporate structures take into consideration corporate intentions or motives (Masaka 2008, p. 17). Inherently, however much corporations are not moral persons, they “like individuals”, are and should be, held morally accountable for actions within their direct control (Masaka 2008, p. 17). This therefore acts in support of the idea that corporate social responsibilities ought to be legally implemented. In contrary, opponents of the idea that corporations can exist as legal entities postulate that proponents of CMR had not indicated that corporations could structure or create intentions by alleging that they prevaricated the meaning of ‘intention’ (Benerjee 2008; Masaka 2008). They argued that individuals in the firm may have lusts, malice afterthoughts concerning decisions, and others. In addition, they indicated that corporations do not have the integration of body and mind necessary for intentional action because the intentions are in the mind of the corporate agents and not the corporation, thus fail to meet the conditions of being a moral entity (Benerjee 2008). According to Longsdon (2005) and Waddock (2004), the concept of Global Business Citizenship are written in papers and presentations at conferences such as Business Ethics Network, International Association for Business and Society and the International Labour Standards document amongst others. Since the principles that govern GBC were first articulated in these conferences, they political inclinations since governments always have dominion over the decisions that are made. As Masaka (2008) argues, governments are charged with the responsibility of protecting clients, providing employment for citizens, and conserving the environment (Benerjee 2008). In the event that corporate social responsibilities defined under GBC are imposed, then governments will be using corporate as a stepping stone to meet their own obligations, which is immoral. However much proponents argue that corporate social responsibilities should be legitimised to give the corporations a chance to influence policies that relate to business ethics, opponents indicate that this will be serving the interests of the government and few individuals that control it (Masaka 2008; Benerjee 2008). Conclusion In view of the above arguments, it is evident that with legitimization of CRS, corporations cannot exist as legal entities because they lack the mind and body to make decisions as to whether they should get involved in corporate social responsibilities or not. Since CSRs are meant to improve the societal welfare, corporate may spend on them with an intention of making better their brand or selling products expensively. This proves beyond reasonable doubt that CSRs will play a major role in serving the interest of the government, and self-interests of corporate stockholders at the expense of the wider society. This illustrates a state of CSRs failing to meet their main objective, which is to profit the community as a whole and corporate wealth accumulation interests and government scapegoats. Therefore, imposing CSRs via establishing corporations that exist as moral entities is immoral as the intention of creating them is to benefit a few segments of the society and not the whole community. References Alzola, M 2008, “When Urgency Matters. On non -discretionary corporate social responsibility”, Human Systems Management, vol. 27, no. 273-282. Banerjee, SB 2008, “Corporate Social Responsibility: The Good, the Bad and the Ugly”, Critical Sociology, vol. 34, no.1, pp. 51-79. Carroll, AB 2004, “Managing ethically with global stakeholders: A present and future challenge”, Academy of Management Executive, vol. 19, no. 2, pp. 114-120. Crane, A & Matten, D 2007, Evaluating Business Ethics: Normative Ethical Theories, In A. Crane & D. Matten (Eds.), Business Ethics (pp. 86-115). New York: Oxford University Press. Masaka, D 2008, “Why enforcing corporate social responsibility (CSR) is morally questionable”, EJBO, vol. 13, no.1, pp 13-21. Howell, R 2010, “Choosing Ethical Theories and Principles and Applying Them to the Question: 'Should The Seas be Owned?'”, International Journal of Tran disciplinary Research, vol. 5, no. 1, pp. 1-28. Parker, M & Pearson, G 2005, “Capitalism and its Regulation: A Dialogue on Business and Ethics”, Journal of Business Ethics, vol. 60, pp. 90-101. Shaw, WH, Barry, V &Sansbury, G 2009, The nature of morality. In W. H. Shaw, V. Barry & G. Sansbury (Eds.), Moral Issues in Business (pp. 3-18). South Melbourne: Cengage Learning. Shaw, W H, Barry, V &Sansbury, 2009, The Environment, In W. H. Shaw, V. Barr& G. Sansbury (Eds.), Moral Issues in Business (pp. 386-409). South Melbourne: Cengage Learning. Shaw, WH, Barry, V & Sansbury, G 2009, The nature of capitalism. In W. H. Shaw, V. Barry & G. Sansbury (Eds.), Moral Issues in Business (pp. 127-176). South Melbourne: Cengage Learning. Visser, W 2010, CSR 2.0: The Evolution and Revolution of Corporate Social Responsibility, In M. Pohl & N. Zadek, S 2007, The civil corporation. Londra: Earthscan. Read More

This definition suggests corporate autonomy or self-governance where companies reserve the rights to make decisions or choices as they deem fit. This is commonly known under business practise as corporate citizenship (Banerjee 2008, p. 52). In contrary, Corporate Social Responsibility refers to the relationship between business and society (Banerjee 2008, p. 52). According to Banerjee (2008, p. 52), “whereas the primary relationship between business and society has been and continues to be an economic one, rising public concern about the social and environmental impacts of economic growth and increased legislation in areas of social welfare and environmental protection have led many corporations to assess the social and environmental impacts of their business activity.

” This confirms the fact that CSRs are specifically activities or promises that a corporation owes or is expected to owe its stakeholders, mainly the community that it serves (Singer, 2008, p. 263; Visser 2010). When corporations are now looked at as moral entities in regard to corporate social responsibilities, a more definitive relationship is created in that corporations can only exist as moral entities if they possess the capacity or right to come to a decision as to which legal contracts or promises should they get into or make respectively with reference to the corporate social responsibilities that they may expected to meet, either under law or an expectation from its stakeholders (Banerjee 2008, p. 59). Corporate Social Responsibilities are often meant to better the welfare of the society under which a corporation is located or its internal stockholders such as directors (Banerjee 2008, p. 59). These activities may be owed to various segments of the society that include consumers, competitors, communities, governments, employees and trade unions, and shareholders and creditors (Weyzig 2009, p.

419; Benerjee 2008, p. 60). These corporations, according to Weyzig (2009, p. 419) can meet these responsibilities by avoiding, amongst others, the breach of contracts, the employment of minors, supervision of boards by non-executive directors, respecting community rights and minimising waste generation (Lamberti 2008, p. 156; Visser 2010). Ethical Perspectives Ethics can be used in the business arena to issue guidance that pertains to addressing non-market issues, which include safety of products, employment practises, environmental regulations or policies and product safety (Masaka 2008; Banerjee 2000).

In this regard, it is evident that issues that are associated with ethics and corporate social responsibility can be used as an alternative to, or similarly pre-empt, interventions and regulations that may come from the government (Banerjee 2008; Weyzig 2009, p. 419). Moreover, while ethics is looked at as a feature that is concerned with moral standards and normative issues within the business setting or environment, corporate social responsibility contrarily refers to or is looked at as a management idea under which companies or corporations integrate social and environmental issues or concerns in their daily business operations and relations with their stakeholders (Banerjee 2008; Masaka 2008).

Therefore, ethics very much more deals with issues that determine how businesses and their managers should behave to promote the welfare of the society in which they operate (Masaka 2008). There are very many ethical perspectives that have been used before to answer questions pertaining to whether businesses are moral entities or not. These ethical theories include utilitarianism perspective of argument and the moral rights perspectives of Kant and Rawls (Crane & Matten 2007). However, utilitarianism principles and Kant’s theoretical perspectives are given a close consideration in this particular essay.

When choices are made within the society, the most common question that is often asked is, ‘was it the right decision (Crane & Matten 2007)?’ For centuries, scholars have struggled with the idea of the morality of actions executed by corporations, and this dates back to 1950s (Masaka 2008).

Read More