The Definition of Corporate Social Responsibility - Coursework Example

Student ID number   Student Name Unit name   Unit number   Name of lecturer/tutor   Assignment name   Due date   Student declaration I certify that the attached assignment is my own work. Material drawn from other sources has been appropriately and fully acknowledged as to author/creator, source and other bibliographic details. Such referencing may need to meet unit-specific requirements as to format and style. Corporate responsibility Introduction Corporate social responsibility (CSR) or corporate responsibility (CR) can be perceived as a concept which is highly contested and has existed in the last seven decades. Some authors best epitomized by Carroll (268) have traced the evolution of this concept beginning in the 1950s which marks the contemporary era of CR. It has thus been under practice in diverse countries as well as being a subject of study in different realms of academia. CR is thus a concept which has not received universal acceptance based on the diversity in its understanding despite the pressure for its incorporation into the operations of various businesses (Freeman and Hasnaoui, 419). Nonetheless, the definition of CR which will be adopted in this paper for purposes of analysis is the one forwarded by Smith (3) who defined it as a business system which permits wealth generation and distribution geared towards benefiting its stakeholders. This is through the execution and integration of ethical mechanisms as well as management practices which are endowed with sustainability. It is also worth noting that different there have been various viewpoints of corporate responsibility which have formed the foundation of discourses in this field among scholars as well as practitioners. Against this backdrop, this paper will primarily focus on three viewpoints of CR in respect to the ethical obligations of the tobacco companies (case study) and the extent to which they met these obligations. The narrow view of CSR This has been cited as a traditional view of CSR which conceptualizes a business as being solely under the preoccupation of the generation and maximization of profits. One of the major proponents of this view is Friedman (1983) whose work depicted the doctrine of CSR as a well-concealed bid for the irresponsibility of the management. This author alluded that the shareholders who are the owners of a corporate institution primarily hire the managers for the sole reason of elevating the profits of the firm. This is aimed at ensuring that these owners can be in a strategic niche to gain reasonable and maximum returns from their investment. In the analysis of the above work, Masaka (15) revealed that since the efforts by the corporate organization to alleviate poverty culminate in the reduction of profits and subsequently the returns for the investment by the shareholders, then the managers who make such contribution in the name of CR are in neglect of their core responsibility to the owners and thus acting against their contractual obligations. Therefore, such actions by the management organ of the organization are perceived to be intrinsically irresponsible and a deviation from the sole reason of engaging in a business venture. This view is applicable to the U.S v. Philip Morris et. al case which was placed the Department of justice (DOJ) against Philip Morris and other eight cigarette companies. This is whereby the managers of these companies prioritized the aspects of profit maximization of the owners of these firms. In this case, they dedicated millions of dollars in investments towards promoting their products in the market, with disregard of the responsibility to inform the members of the public about the probable dangers like health issues and addiction which are associated with the usage of these products. Additionally, the evidence by the DOJ also revealed that these companies also went to the extent of researching on how to target the advertisements of these products to children aimed at increasing and maintaining their market share both in the short and long-term. These tobacco companies also supported misleading adverts that nicotine is not addictive and proceeded to adjust the amount of nicotine in the cigarettes so that they could make it more addictive to new users. All these activities point the elevated efforts by the cigarette companies to maximize their profits in the market even at the expense of the users’ health which they did not consider as their primary responsibility. This is founded in the narrow view of CR which is highly applicable in this case. On the other hand, Friedman (cited in Masaka, 16) forwarded an argument that the corporate expenditures aimed at providing a solution to the social problems in the society are not a privilege of the corporate bodies but instead the obligation of the government. In this case, the corporate managers who spend sums of money on social welfare solely act like the decision makers of the government without the prerequisite feature of undergoing an electoral process to fortify their legitimacy. In this case, there is an argument that since the government imposes taxes on the corporate bodies, then it would sum up to double taxation is the managers in the corporate institutions were to make contributions towards solving the diverse problems in the society. This argument underpinned in the narrow view of CR is apparent in the case under analysis whereby these cigarette companies can be perceived to have abandoned the role of solving some of the health problems prevalent in the society and left it at the hand of the government of the day, which indeed taxed them. Subsequently, these companies failed to conduct any research on the potential risks of their products, a role which they left at the hand of the government. These companies thus proceeded to market as product which killed approximately 400,000 to 500,000 Americans per year. Thus, this view is highly applicable in this case. Socio-economic view of CSR In this view, different scholars have argued that the social responsibility of the firms refers to a phenomenon whereby the actions and decisions which are undertaken by businessmen for various reasons extend partially beyond the economic and technical interests (Davis, cited in Carroll and Shabana, 87). This was fortified by Frederick (cited in Carroll and Shabana, 87) who argued that the resources which are in a given firm are also supposed to be used for the broader social goals. Thus, social responsibility asserts that corporations ought to assume particular responsibilities within the larger societal set-up which extend beyond their economic as well as legal obligations. In this case, within the Kew Garden Principles, an affirmative corporate social agenda can be created in a business. This affirmative agenda is focused beyond the expectations of the community towards the opportunities aimed at achieving socio-economic benefits in a simultaneous manner. This moves beyond the mitigation of harm to finding mechanisms which can fortify the corporate strategy through the advancement of social conditions (Carroll and Shabana, 94). Additionally, it is also apparent in this view that that in the economic responsibility of a firm, the measurement of profitability measures not the maximum profits which can be produced by a firm which underpins the narrow view of CSR, but rather the morally acceptable minimum profit it must produce. The socio-economic view of CSR is applicable in the case under analysis. This is whereby these tobacco companies exhibited total failure of considering the socio-economic conditions of the society, despite this not being their legal or economic obligation. This is best epitomized whereby though it is apparent that these companies were not either legally or economically bound to conduct or fund any research to explore on the health risks of smoking, they ignored this responsibility altogether and thus failed in their socio-economic responsibility. Instead, they invested their resources on researches and advertisements which advanced their economic and technical in disregard of the societal welfare. This is best exemplified by their despite published researches which were conducted previously revealing that there is a great linkage between smoking and cancer, this group of cigarette manufacturers spent millions of dollars in later years advertising that there is no formidable proof that smoking causes cancer. They went beyond in this and conducted a research to show that even family physicians, nose and throat specialists, surgeons and doctors in diverse realms of medicine who are entrusted with human health constantly smoke their favorite cigarette, Camel. This was only aimed at maximizing their economic and technical welfare in the market in disregard of their larger socio-economic responsibility of informing the public, despite this not being their economic or legal obligation. Broad maximum view of CSR Nirvathi et. al. (4) asserted that this view of CSR was primarily proposed as a self-regulation mechanism geared towards ensuring that the social control of business is apparent without necessarily depending on the uncertainties of the coercive authorities of the governments or individual ethics. In this case, corporate and business citizenship can be perceived as an extension of CSR across borders. Additionally, Donaldson and Preston (cited by Nirvathi et. al., 4) forwarded an argument that the act of balancing the views of various stakeholders plays a key role in balancing the perceptions of justice in the representation, and thus reducing any possible violation of rights. This is deeply embedded in the stakeholder theory instituting the CRS agenda and is visualized from diverse points of view of individual, institution and organization. This surmounts the criticism that only individuals have this responsibility in the firm. This view is also apparent in this case under analysis whereby the companies in this group of cigarette manufacturers failed to institute self-regulation mechanism aimed at ensuring social control of this larger industry, without being coerced by the government. This includes mechanisms of solving societal problems associated with substance abuse among both adults and children. Moreover, these companies failed to have any ways founded on their individual ethics to test their products, design products which are safe as well as warning the users about the apparent dangers of using these products. In this case, these companies were deficient in solving the diverse problems confronting the societies which surrounded them, mostly those related with addiction to cigarettes. This failure to test the suitability of their products to human health, for instance, reducing the level of nicotine in these products aimed at reducing the rate of addiction can be perceived to have played a key role in the death of approximately 400, 000 to 500,000 Americans per year despite the lack of government coercion to do so. This trend continued until they were forced to do so by the government in 1969. Conclusion From the preceding analysis, it is apparent that the prominence of CSR has increased in the recent decades despite ambiguity in its definition. In the U.S v. Philip Morris et. al case, the three views under CSR analyzed above have applicability. It is evident that this companies tended to focus on profit maximization as embedded in the narrow view of CSR in disregard of their social responsibility to address prominent social problems in the society as embedded in the broad maximum view of CSR as well as moving beyond their economic and technical interests as underpinned in the socio-economic view of CSR. Works cited Carroll, Archie. ‘Corporate Social Responsibility; Evolution of a Definitional Construct’. Business and Society 38.3 (1999): 268-295. Print. Carroll, Archie and Shabana, Kareem. ‘The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice’. International Journal of Management reviews 2010: 85-105. Print. Friedman, Milton. ‘The Social Responsibility of Business Is to Increase Its Profits’. Business Ethics and Corporate Values and Society. Ed. Snoeyenbos, M., Almender, R. and Humber, J. New York: Prometheus Books, 1983. 73-79. Print. Freeman, Ina, and Hasnaoui, Amir. ‘The meaning of corporate social responsibility: the meaning of four nations’. Journal of Business Ethics 100 (2011): 419-443. Print. Masaka, Dennis. ‘Why Enforcing Corporate Social Responsibility (CSR) is Morally Questionable’. Electronic Journal of Business Ethics and Organization Studies 13.1 (2008): 13-21. Nirvathi, Sarangapani et. al. ‘Developing Ethical and CSR Standards in Indian Corporate Sector: A Conceptual Analysis.’ 2011. Web. 21st April 2013. < http://anzmac.org/conference/2011/Papers%20by%20Presenting%20Author/Nirvathi,%20Sarangapani%20%20Paper%20629.pdf>. Smith, Richard. ‘Defining Corporate Social Responsibility: A Systems Approach For Socially Responsible Capitalism’. Thesis, University of Pennsylvania, 2011. Print. Read More