Instrumental, Political, Integrative and Ethical Theories - Coursework Example

Corporate social responsibility theories Author name Grade course Institution Tutor Date Introduction Corporate social responsibility is the contribution and impact that a business has to the social and environmental factors. A business or an enterprise should try to improve the welfare of the society and the community at large (Garriga & Mele 2004, p.53). This paper tries to elaborate if implementing corporate social responsibility in a business can balance the needs of all stakeholders. Stakeholders of a company can vary from investors, shareholders, buyers, sellers and brokers. The interest of the stakeholders varies from one group to the other. There are certain theories that elaborate the dimensions of corporate social responsibility. These theories are classified into; Instrumental theory, political theory, integrative theory and ethical theory. Discussion Organizations have different reason to conduct business. In this case, stakeholders of different company will have different interest with the company (Berman, Kotha & Jones 1999, p.492). This interest can be illustrated from a theoretical perspective as will be elaborated. Instrumental theory This theory suggests that the main objective of the corporate is to make profit. It is mainly focused in wealth creation and use the social responsibility as a tool to create wealth (Barney 1999, p.102). With the view of increasing profit, it has to consider every responsibility. Certain responsibility that would lead to losses is rejected. Those that would result to increase of equity are considered if they do not involve any fraud or corruption. The stakeholders are the main people who dictate the kind of responsibility they are going to cater. They thus have to consider their interest in the social responsibility and see if it is beneficial to them (Berman, Kotha & Jones 1999). From this theory, stakeholders take up measures that are going to increase the wealth and capital of a business. They invest in social activity as a way to make money. In this case, the corporate or the firm will earn money out of the activity (Burke & Logsdon 1996, p.497). They therefore, have a competitive advantage over other firms who are involved in the business. The company considers its advantages in the involvement, and thus invests its resources to win the market in order to earn immensely (Berman, Kotha & Jones 1999). In other cases, the world population consisting of the poor people, most of the firms innovate ways to make the poor people as not a problem but as consumers of their products (Garriga & Mele 2004, p.54). In this case, they get means to earn income by trying to help them through providing goods. They may seem to be helping them, but in the real sense, they are benefiting from the income of sales of their products. This is referred to as disruptive innovation (Berman, Kotha & Jones 1999). Some stakeholders use the social responsibility as a cause related marketing. They consider that through supporting various social responsibilities, their products will be viewed as of high quality. Others consider by supporting activities like campaigns exhibitions and concerts, they can market products. In this case, they lead to a win-win situation to both the organization and the community (Garriga & Mele 2004, p.56). The organization attains a competitive advantage over other competing firms and still help the community. In this case, the corporate social responsibility helps to meet the community expectation, and still gain advantage over others. From the instrumental theory, it is clear that with the aim of making profit, different stakeholders will have different ideas to make money out of the social responsibility. There are those that are long term related and want to maximize profit, others want to achieve competitive advantage through cause relation. There are others that would use corporate social responsibility to do ‘cause related marketing’. This would thus result to imbalance of the needs of the stakeholders being met (Stead & Stead 2000, p.317). To meet the balance of the stakeholders, some consideration of the corporate social responsibility should be taken as well. It should meet a long term way of making profit, and which give the organization some grounds of cause marketing. This results to competitive advantage over other competing organization (Yatnaji 1997, p.59). Ethical theory Secondly, it is the Ethical theory. This theory suggests that there are ethical norms that cemented the structure of its foundation. It dictates on the right things that the stakeholders are obligated to do. Unlike the instrumental theory, the stakeholder has an obligation to see that the company or the corporate does the right things (Yatnaji 1997, p.59). They weigh their interest and consider the most important values of the social welfare of the surroundings. Different stakeholders have different interest in the firm. In this case, they must consider all views and come with a normative view. Some principles regarding this view were developed. They include; Rawlsian principle, combination of Kantian and Rawlsian grounds and the doctrine of fair contracts and Phillips (Garriga & Mele 2004, p.59). From this, the stakeholders determine the best social responsible they are going to handle. Stakeholder management is an ethical based theory, it suggest that the manager has a responsibility over the stakeholders interest. The manager has to distinguish the various stakeholders that exist in the organization. Those that have a legitimate interest will thus focus on their interest and not of the society at large. Stakeholders are referred to have intrinsic value, meaning they will always consider on their gain, an advantage they have over others (McWilliams & Siegel 2001, p.119). According to ethical theory, different stakeholders will use different approaches to attain their goals (Garriga & Mele 2004, p.60). Firstly, there will be those that would want to use the universal rights as the base of their framework in the organization. In this case, they would use responsibility that has been accepted worldwide. They include the UN Global compact, which stipulate the nine principles regarding human rights environment and also the human rights (Porter & Kramer 2002, p.58). Another principle that many companies have adopted is The Global Sullivan Principal. The principle supports economic, political, justice and social welfares. In this case, ethical theory considers the Universal Human Rights to formulate its structural responsibility. Before the corporate conducts its business, it must make sure it has fully addressed all the issues. The issues for example, may be to see they do not pollute the environment, whether they honor the human rights of the workers; if they are well paid, they have all the necessary equipments to work, their working condition is appropriate and if they are of the right age. Other social consideration is if the business is if it is legal and if it produces legal goods, if there is balance in gender, ethnic and culture. Lastly, if there is nepotism ad corruption in the business (Garriga & Mele 2004, p.59). Some stake holders would have an interest in a social responsibility that will have a sustainable development to the society. Sustainable development is a key factor that the ethical theory considers that every organization has to honor (Porter & Kramer 2002, p.59). It demands that all corporate company must contribute to the welfare of the community. They should consider long term development to the society at large. The development should be long term to the future generation and the generations of the future. The World Commission on Environment and Development published a report that made the term ‘sustainable development’ a worldwide term. It was expanded to relate the social dimension and development as not separable (Payne 2006, p.387). The long term development should be in a manner that integrates social, economic and environment aspects in its conduct (Moon 2007, p.398). In this case, it would provide a development that is sustainable, inclusive, prudent and secure. Sustainability means that the development will create values that are consistent with economic, social and environmental factors. From this, organizations do not gain at the expense of the community. It should contribute positively to the growth of the society (Kolk & Tuldor 2010, p. 397). In other cases, some stakeholders would take the approach of the common go to the society. The stakeholders are usually much concerned about the good welfare of the community rather than the gain of the organization. In Aristotelian’s tradition, the common good is as a key aspect to mould the business ethics (Payne 2006, p.388). The tradition views business as an institution that is not supposed to be harmful to the society, or gain in expense to the community. It should only be contributing to benefiting the society. In reference to Balmer, Fukukawa & Gray (2007, p.10) contribution of the common good may be through the provision of wealth, services and goods for either consumption or usage. In the provision, it should see that it respect the dignity and respect the society. It should also promote to the harmonic living in present and in the future. From the ethical theory, there would be an imbalance of the needs of the stakeholders being met. This is because different stakeholders would take a different approach while conducting their ethical value. Some would want to consider universal rights to be the frame work of their organization. Others would consider social responsibility that sustain development as the best option, while others would consider the common good as the main framework of the establishment of the social benefits. In order to strike a balance between the needs of the stakeholders, the organization has to consider the social responsibility that consider the universal rights, sustain development, and that which is of common good to the society (Kolk & Tuldor 2010, p. 398). Integrative theory The third theory that explains the reason that lead to an organization involving itself in social responsibility, is integrative theory. This theory suggests that any business organization is depended on the society for its survival. In this case, the management should consider social demand and values to form an integral feature of the organization. In this case, the organization has to focus on the response to social demand, which lead to social legitimacy and create social acceptance and prestige (Garriga & Mele 2004, p.61). This theory suggests that certain stakeholders would use different approaches to manage the issues that affect the society or would contribute to the help of the survival of the organization (Garriga & Mele 2004, p.62). In this case, the organization should consider its gap and what is expected. In this case, the shareholders would seek all the best structure that formulates the best mechanism that handles social issues. According to Payne (2006, p.390) an organization needs to identify, evaluate and respond to social and political issues that may impact its conduct of business. According to Valor (2005, p.193) Stakeholders being compost of various groups, some management is needed to address their interest. Certain corporations are pressured by community, non-governmental organizations and media to take up some corporate responsible practice. The corporate gets into dialogue with the stakeholders to realize the task they can undertake. The organization enhances its sensitivity to the environment and understanding dilemmas facing the organization (Payne 2006, p.388). This would lead to imbalance of the stake holders since they are forced to take the task they may not intend to want. Some practice may not be favorable to them and may reduce their income. According to integrative theory, stakeholders would be imbalanced if they take different approaches. In reference to Payne (2006, p.391) there are definitions of the certain obligations that an organization has to meet. These obligations regard economics, legal, ethical and discretion. From this definition, organization will try to balance between the social requirement, responsiveness and mange the corporate social responsibility. Valor (2005, p.194) extended that the definition would lead to a good management of stakeholders and tries to strike a balance of the needs. Political theory The last theory is the political theory. This theory shows the connection between the business, society and power to the society. In this case, the stakeholder will have different ways to attain power in the context of taking up the corporate social responsibility. To attain this, they would use different approaches. They include; corporate constitutionalism, or corporate citizenship. Using its powers, the organization would influence the equilibrium of the market and the price stability. In this case, they can gain from the price instability and make a profit. To manage this Valor (2005, p.195) formulated ways to enable the management of their powers. The principle included; iron law of responsibility and social power equation. These principles help in regulating the powers of the business and limit stakeholders (Garriga & Mele 2004, p.62). From this theory, we find that stakeholders with powers would want to use their powers to influence the market to make a profit. By formulating ways to manage these powers, they are restricted to use their powers accordingly. This would result to imbalance of the needs of the stakeholders. In conclusion, the needs of all the stakeholders will never be accomplished. There are those that are ethical and only concerned with the well being of the society. There are others that use the corporate social responsibility as a tool to increase their wealth. In other cases, there are those who use the social responsibility to attain powers that will help in achieving some political position. Lastly, there are those that consider social responsibility as a means of ensuring survival of their organization. The best implementation is to consider the corporate social responsibility that will increase the organization wealth and have all the ethical values being considered. The corporate social responsibility should be used as a tool in reasonable ways and make sure powers are not misused to attain any advantage in expense of the society. References Balmer J, Fukukawa K & Gray E, 2007, The Nature and Management of Ethical Corporate Identity: A Commentary on Corporate Identity, Corporate Social Responsibility and Ethics, Journal of Business Ethics, vol.76, no.1, 7-15. Barney J, 1999, 'Film Resource and Sustained Competitive Advantage", Journal of Management, vol. 17, pp 99-120. Berman SL, Kotha W & Jones T, 1999, 'Does Stakeholder Orientation Matter? The Relationship between Stakeholder Management Models and the Firm Financial Performance", Academy of Management Journal, vol. 42, no.5, pp 488-509. 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