Theoretical and Practical Issues of Corporate Social Responsibility - Report Example

Running Head: THEORETICAL AND PRACTICAL ISSUES OF CSR Theoretical and Practical Issues of Corporate Social Responsibility [The Writer’ Name] [The Name of the Institution] Theoretical and Practical Issues of Corporate Social Responsibility Introduction Social responsibility is more relevant to managing today's organisations than ever before. Today's organisations are entrenched in a conflict over the two opposing views of social responsibility. The classical view holds that management's only social responsibility is to maximise profits. (Robbins, 2003, p136) The most famous advocate of this approach is economist Milton Friedman who believed the only obligation a company had was to its shareholders. Cooper and Hill (2004:1) also argue that businesses are commercial, and not social or political institutions and the central focus of any business is on building shareholder wealth. Durie (2002:401) however argues that managers who operate with this one-dimensional view of the corporation will not survive in today's changing environment. According to Durie (2002:403), many organisations have been widely criticised by society for being too - overly concerned with profit, and failing to take its broader responsibilities seriously. Skinner (2004:44) argues that to achieve sustainable development managers must plan beyond short term profit considerations and look to deliver on the 'triple bottom line', - known in business as the outcomes of an organisations economic, social and environmental performance. Certain changes reflect a shift in what society expects of organisations today, and the ability for managers to understand and adapt to social and environmental issues is the major leadership challenge they face. The classicist view of corporations seeking profit with disregard to long term social and environmental issues is a way of the past. With the growing expectations that society has towards organisations, social responsibility is more relevant to managing today's organisations than ever before. Managers however need to be careful in pursuing these broader roles if they are at the expense of shareholders, and management need to ensure that while social and environmental outcomes are maintained, it is not at the cost of economic objectives. Social Obligation of a Business To Meet Economic And Legal Responsibilities Mendes (2003:33) argues that current business theory holds that organisations have operated and continue to operate over five different generations. Mendes (2003:32) proclaim that first generation managers believe, like Friedman, that their only obligation is to themselves and shareholders. 'Social obligation is the obligation of a business to meet its economic and legal responsibilities, the organisation does the minimum required by law' (Robbins, 2003, p138) Eisele (2003:543) argues that first generation or classical style management existed in the American Gilded Age (1875 - 1900) where the labour received poor wages and worked in average conditions. 'Strikes were often ended with violence, almost always instigated from the wealthy business managers'(Eisele, 2003, p544). Although most organisations do not adopt the classicist approach today, Eisele (2003:545) argue that there are still those in the business world who operate successfully under first generation issues, and have justified responses to their social irresponsibility's. In 1996 it is stated that then, - united states secretary of labour, Robert Reich estimated over 13,000 American companies used foreign sweatshops as part of their business activities. Comer Industries vice president James Field also argued in regard to foreign sweatshops, stating that 'managers are not politicians or moralists'(Eisele, 2003, p545) and claiming that 'if we don't hire foreign labour, the people will starve'(Eisele, 2003, p546). Mendes (2003:p34) however argues that impact of society's views on foreign sweat shops have changed business practice. Mendes (2003:p34) argues that well publicised boycotts against Wal-Mart and other retailers who carry sweatshop garments demonstrate that price is not the only factor shoppers consider when buying clothes. In order to improve its image Wal-Mart now employ ethicists on their staff, and stepped up penalties for suppliers using sweat shop labour by immediately discontinuing business with those who use it. Wal-Mart realized the poor public perception it was surrounded in and adapted quickly to societal demands by adopting a strategy of social responsibility to improve it status within the community. Profit Factor Profit is proven to be the motive for social irresponsibility's such as 'cheap labour'. 'Managers of organisations need to recover the money they have invested in the market, and the best way to achieve this is through profit maximisation' (Arrow, 1998, 305). Cooper and Hill (2004:2) argue that the most successful managers of our time do not 'waste their time' with social and environmental responsibility, rather focusing their organisation towards market dominance and maximum returns. For example, in a recent survey by Financial Times regarding the World's Most Respected Companies, the companies that got the top places are not only the ones that act in the society's well being. The business sector does not always function in a black or white framework, where the most socially responsible organisations are rewarded wholly without exception. The argument of General electrics and Microsoft however is not as simple as it may seem. Cooper and Hill (2004,5) goes on to argue that the way in which Jack Welch reconstructed General Electric would play to the kind of agenda recognisable to advocates of social responsibility, - in particular that of employee empowerment. Bill Gates has also put a large majority of Microsoft's earnings towards charitable organisations perhaps realising the need to adapt to society expectations. Even the most successful advocates of classical type management theory are beginning to understand that organisations will not survive by focusing on economic objectives only, but realising the important role social responsibility can play in maintaining a successful organisation. Implications of CSR Janita and Voss (2003:24) argues that organisations who consider a strategy of social responsibility must address the question 'to who are we actually responsible', - of which he states are its stakeholders. To manage a socially responsible organisation, the identification of stakeholders is crucial as without their participation, the corporation cannot survive. 'To a certain extent, management of social responsibility is becoming stakeholder management'(Janita, Voss, 2003, p24). With the entrance of 'stakeholder society', transparency, corporate governance, accountability and public rights are the new maxims for managers today Orlitzke, Swanson, 2002, p121). All organisation within society have social obligations, from being law abiding to not discriminating against minority groups, however the pressure on managers to become socially responsive to issues outside business norms is increasing. 'Social responsiveness is the ability for managers to treat stakeholders carefully and to protect the environment and community within which they operate. (Robbins, 2003, p139) Therefore investing in the relationships of stakeholders can direct to precious competencies that is important in maintaining a competitive advantage. Duncan (2000:3) argues that the role of business in society and the morality of ethics and multi-nationals are not new grounds for public debate. This is a reflection of the spread of education which is creating more informed communities who are better prepared to exercise and analyze choice. "We are now in a world where people are withdrawing their trust from business and other institutions, unless it can be demonstrated such faith is warranted" (Duncan, 2000, p 4). Fonteneau (1999: 165) also argues that a manager’s ability to develop a strategy of corporate social responsibility is a must. A number of social and ethical irresponsible practices has been the attention of increased public perception; 'fraudulent bankruptcies, questionable purchases, cheatings in the accounts, very high manager salaries, disrespect for basic values, deregulation, disconnection between financial and economic activities have been common' (Fonteneau, 1999, p167). It is a managers responsibility to ensure negligent activities do not occur, -notwithstanding financial effects, poor social responsibility can prompt public criticism and loss of goodwill. Consider the long-withstanding global controversy surrounding Nestle's practice of marketing infant formula to developing countries. Duncan (2000:2) argues that some of the world’s biggest energy companies are taking the lead in changing corporate behaviours and responding in profoundly different ways to contemporary societal expectations of business. In an address to the Sydney institute chairman and CEO of Shell Australia Peter Duncan (2000:3) stated that big business has been criticized by being too overly concerned with financial performance and that such accusations reflect a shift in what society expects of business today. Duncan (2000:3) argues that balancing the ongoing role of social responsibility and meaningful management is a challenge many CEO's around Australia are facing. Cooper and Hill (2004:2) argue however that it is easy for large organizations with disposable resources to adopt a strategy of social responsibility while for smaller or struggling organizations, the focus is on survival. 'Organizations fighting for survival simply do not have the ability to support social and environmental issues' (Cooper, Hill, 2004, p3). McWilliams and Siegal (2000:605) however argue that if the process of managing social responsibility leads managers to disregard core business activities, the problem is manager related, - not an issue of social responsibility. It is therefore not only the responsibility of large organizations to adopt a strategy of social responsibility in today's changing environment, but managers of small business can also benefit financially from focusing on societal demands and environmental issues. Waste management increases profits and improves a firm’s ethical status within the community. The Relationship between Financial Performance and Social Responsibility Janita and Voss (2003:4) argue that incorporating a social responsible strategy within an organization is profitable. There have been many studies into the relationship between Financial Performance and social responsibility, with more recent studies confirming a positive relationship between the two, however firstly we need to consider a neutral relationship. McWilliams and Siegal (2000:608) argue that there is an ideal level of social responsibility 'depending on an organizations size, level of differentiation, research, development and advertising. It is also in the best interest of the management to operate an organization in a socially responsible manner with such evidence confirming a positive link between a firm's financial performance and corporate social responsibility. Challenges to a Regulated CSR and Global Ethics Companies that emerge from a single domestic environment usually adopt ethical norms and values from the host culture. In other words, the cultural context influences organizational ethics for example, if national practice is bribery, then most companies in that nation will use bribery (Cuervo-Cazurra, 2008 web). Another example, from the perspective of those in the ‘developed’ world, questions are raised about the ethicality of working practices, for example, in ‘sweatshop’ factories as illustrations of ‘unethical’ business practices, but it may evoke very different responses in those directly affected (Cairns, 2007, 306-10). The challenge of business ethics lies in asking business enterprises and the people who run them to develop a hierarchy of what is good or "right" to do in a world where there are few widely accepted absolutes. The opponent of the view that the global ethical rules and regulated CSR are needed may view the its as an end rather than a beginning, in the sense they can depress innovation and creativity since rules are static but globalization is dynamic. Some argue that the introduction of prescriptive regulation with regard to CSR matters is unnecessary (Kercher, 2006, web) as CSR involves a voluntary business endeavour to address social and environmental issues beyond legal compliance, therefore, governments cannot impose hierarchical command-and-control policies to support it. CSR and Ethics Internationally Historically international law remedies in relation to CSR of the multinational corporations are considered weak especially due to the issues of jurisdiction (Kercher, 2006, web), or where the national law provided that the inappropriate conduct occurred is either inadequate or the judicial system or government is not motivated to commence action against the offending corporation (Cuervo-Cazurra, 2008, web). In order for a company to be a social citizen, they must hold a strong belief for ethical decisions and behaviour. Normative ethics uses several of styles to describe the values for directing ethical decision making. The approaches require an organisation to be just and moral in its methods, in order to produce and promote the greatest good for the greatest number. CSR takes on this positive approach. It allows the company to satisfy more of its stakeholders if CSR is adopted by the organisation. From a social responsibility perspective, organisations view their internal and external environment as a variety of stakeholders. A stakeholder is anyone who has a stake in the organisation's performance. They can affect or get affected by the company, so it is very important to keep them in mind when a company makes its decisions. McWilliams and Siegel categorize the demands from multiple stakeholders into two main groups. The first one is the "ultimate group" which consists of demands from consumers, employees and suppliers; and the second is the "penultimate group" which is demand from other stakeholders such as the government. (Bies, 2007, 788-93) A company should treat all its demands seriously, regardless of which group has brought it up. When a company is confronted by a specific social demand, it is very important on choosing the right method of handling it. Some management professors have developed a scale of responses that organisations use when a social issue confronts them. Actions can be "obstructive, defensive, accommodative or proactive" (Kimber, 2005, 178-210). A socially responsible organisation would try to seek an accommodative or a proactive response. Exxon took an accommodative response when there was an oil spill in Prince William Sound, Alaska. After being hassled by the public, it decided to do a clean up and open environmental awareness programs. This eventually put the company in a good light, rather than a bad. Environmental and Social Concern by Stakeholders With the growing popularity of environmental and social concern by stakeholders, adopting CSR is becoming a common choice among organisations. Having a good environmental and social ethic means more than just simply donating money to the community. It means for the company to partner with the community and to get involved in fundraising. It also means to have a long term goal, which is to "operate the business with as little environmental impact as possible and with minimum consumption of materials of natural resources" (Nagler, 2007, 179-87). Even though Rio Tinto is a mining company, it is still admired by the staff at Business for Social Responsibility, for the way it operates and contributes to the local community (Windsor, 2006, 93-114). Not only is CSR beneficial for consumers and special interest groups, but to employees as well. Employees are an important asset to a company, so it is essential to maintain their well-being while working. Research has found that 32 per cent of employees would like to work in a better environment (Simmons, 2002, 1-7). Furthermore, the study revealed that a growing number of employees wished their company were more socially responsible. A socially responsible company can eliminate those distractions, as it also takes interest in the welfare of the employees. This improves the productivity of the employees and hence the output from the company. Shareholders are now also evaluating the performance of a company through the way it operates and reports its profits (Windsor, 2006, 93-114) Shareholders favour a company who has CSR than one that does not. Shareholders assume that a socially responsible company would not omit any information from the balance sheet, thus creating a reliable performance of the company. A company can generate profit through building a good reputation to consumers. CSR is important to marketing as it "provides an opportunity for creative and powerful marketing campaigns that reach different pockets of the community that may have been inaccessible through regular business practices" (Cuervo-Cazurra, 2008 web). However, it is more than just a "marketing gimmick tool". Concepts like "values, ethics, responsibility are not tools in the ordinary sense of the word, for the user and the tool are intimately related... A leader cannot maintain the trust of his/her stakeholders if ethics and responsibility can be just like ordinary tools...and be thrown away" (Brown, 2005, p15). In the future, the value of a corporation will not only be derived from its financial success. The value of a corporation will also be drawn from how well it distributes some of its wealth back to the stakeholders and the community, and as well as how it contributes to both social and environmental issues. CSR in Australia is still a new area that needs to be more thoroughly researched. However, one thing is for sure. CSR has a positive impact on both the company and the community. By demonstrating leadership in balancing commercial and social responsibility, corporations can be regarded as an employer of choice. If there is such a growing emphasis on CSR, why are most Australian companies not willing to meet these competing demands from stakeholders? The Millennium Poll showed that 45 per cent of Australians believed that companies should set higher ethical standards and assist in building a better society. However, only 2 per cent of businesses leaders agreed with this statement (Eisele, 2003:545). Corporate Social Responsibility (CSR) and Government Role Organisations, governments and activists currently face the challenge in how to respond to the growth of Corporate Social Responsibility (CSR). CSR has now grown swiftly and relatively smoothly over the last two decades as the numbers of companies take up the standards of CSR in attempt to make their operations more moral (Hancock, p27, 2005). CSR is closely connected with the principles of sustainable development in declaring that business organisation should be obliged to make decision not only based on its financial and economic factors but also on the social and environmental factors. CSR could be in various forms such as, healthcare initiatives, and community relations, preservation of cultural heritage and volunteer assistance programs (Theaker, 2001, p.15). The philosophy of CSR is to give back to the society, what the organisation had taken from it to achieve its objectives. Views on CSR There are two opposing views of social responsibility. On one hand there is the classical view and on the other hand there is the socioeconomic view. The classical view that is purely economic, states that the management’s only social responsibility is to work on maximising the profits. At the social level, classical view identifies the managers as individuals responsive to market conditions and responsible to follow the laws and the societal norms (Brown, 2005, p15). Some people have different views on why corporations take social responsibility. There view is that, the corporation gets commercial benefit by raising their reputation with the society and the Government. Friedman also argues that when managers make decisions to spend the organisation’s resources for social responsibility, they are raising the costs of the organisation and therefore reducing the profits (Robbins et. al., 2006, 135). However, the costs can be passed on to the customers by raising the prices or the costs can be contributed by the shareholders by reducing the organisation’s profit margin. The socioeconomic view states that management’s social responsibility is not only making profits but it goes beyond to include protecting and improving the society’s welfare. The supporters for the socioeconomic view debate that managers should be looking forward to maximise the financial returns over the long run and to do that, they must take on social responsibility and its costs (Robbins et. al., 2006, 137). The socioeconomic view argues that the role of recent modern organisations has changed and that society expects the organisation to follow certain moral and social responsibilities. The modern organisations are seen as more than just economic institutions as they are involved in the society’s political, social and legal environment (Keller, 2003, 44-50). As such, all organisations are responsible not only to the owners (shareholders) but to all stakeholders of the organisation. The stakeholders of the organisation are all those affected by the organisation’s operations. The stakeholders not only include the shareholders but suppliers, customers, government, creditors and the people residing in the neighbourhood. In this view, it is not just a moral and social argument, but also financial one. There is an argument that an organisation maximises its profits in the long run only if it takes into account the ethical and social responsibilities (Brown, 2005, p15). An organisation’s reputation and the organisation itself will suffer if it ignores the interests of the wider community and fails to protect the society’s wellbeing. The examples of an organisation in Australia who take into consideration the use of CSR are Westpac, BHP Billiton and Mc Donald’s. Westpac has an approach to community investment through employees volunteering. “Corporate responsibility influences on employee performance and employee commitment and helps secure organizational attention to managerial issues, such as employee turnover and occupational health and safety, which in turn drive business performance” (Westpac, 2005 web).Westpac has implemented initiatives to employ Ageing Workforce, making good progress against its own targets for recruiting mature employees. Westpac adopts socio economic view by investing in the community through its financial programs such as fee free banking for low income earners, developing business skills for small business, and work opportunity programs. It offers staff paid leave to undertake voluntary work and has also introduced family orientated policies, such as paid maternity, paternity and adoption leave, and assists staff in obtaining childcare facilities and hence customer loyalty ( Westpac, 2005, web). BHP Billiton is an example of an organisation that enhances socioeconomic view because it has a long term commitment to sustainable development and has taken a mutual approach to issues and helping the disadvantaged across the world including Australia, South Africa, and South America, Pakistan. In this view, it is not just a moral and social argument, but also financial one. There is an argument that an organisation maximises its profits in the long run only if it takes into account the ethical and social responsibilities (Montana and Charnov, 2000, 98-101). An organisation’s reputation and the organisation itself will suffer if it ignores the interests of the wider community and fails to protect the society’s wellbeing. Conclusion In conclusion a manager's main purpose was to generate profits, but with the spread of consumer concerns in the general environment, managers have needed to change the way in which they do business. It was discussed that in a less well-informed time such as the American Guilded age, there was no need for ethical behaviour, but today's public demands more of its companies than simple profit margins. The expectations are increasing with time, with the world becoming more aware of business practice, there is more of a need for business to operate in a socially responsible manner. The example of Microsoft and General electrics Bill Gates and Jack Welch understanding the need to change their narrow minded view from profit maximisation towards environmental and social issues is evidence to suggest the increasing importance social responsibility is becoming in managing today's organisations. The identification of organisations stakeholders is the key to managing a socially responsible organisation and with the growing expectations of society on business today, the list of a company's stakeholders is increased. Assuming responsibility of organisations shareholders is vital, but managers of social responsibility need to look beyond shareholders themselves, by investing in local neighbourhoods and the environment to ensure a positive image in the marketplace. Company's are under increasing pressure to act responsibly towards communities and the environment, with the spread of information technology bringing business issues to the attention of consumers. Society has developed distrust for organisations that act irresponsibly such as the controversy surrounding Nestle developing infant formula for under-developed nations and it is in the best interest of the company, the consumer, the employee, the shareholders and the environment in general to incorporate social responsibility into today's organisations. In summing up, the corporate social responsibility is a current cost for an organisation. However, it is also a way of generating long term profits for the share holders. It all depends on whether the organisation is considering classical view or the socioeconomic view. The arguments for and against social responsibility, there are more arguments for CSR compared to against CSR which can prove that CSR should play a role in influencing how the managers make the decisions as they plan, organise, lead and control to. However, business can be socially responsible only when it pursues its economic wellbeing. Social actions are the right thing to do but pursuing these responsible actions dilutes business’s principal purpose which is economic productivity. References Arrow (1998) "Social responsibility and economic efficiency", Public Policy, Vol.21, pp.303-317. Bies, R. J., Bartunek, J. M., Fort, T. L. & Zald, M. N. (2007). Corporations as social change agents: individual, interpersonal, institutional, and environmental dynamics. Academy of Management Review, 32, 3, 788–793 Brown, M, T. (2005), Corporate Integrity: Rethinking Organisational Ethics and Leadership, Cambridge University Press, United States of America, New York: p.15 Cairns, M. (2007, October). Bringing Ethics to the Non-Ethical: Can International Business Overcome its Past? [Electronic version]. International Review of Business Research Papers, 3 [4], 306-10 Cooper and Hill, (2004) "The Opposing Views of CSR" Journal of Business, pp1-19 Cuervo-Cazurra, A. (2008). The Effectiveness of Laws against Bribery Abroad. Journal of International Business Studies. Retrieved November 6th, 2008 from SSRN: http://ssrn.com/abstract=1059001 Duncan, P (2000) Corporate Social Responsibility, A Shell View Peter Duncan, Chairman and Chief Executive Officer of Shell Australia, addressed The Sydney Institute on Wednesday 29 March 2000. pp1-4 Durie (2004) "The Writing on the Wall, the CSR imperative", 'Journal of Business ethics.' Pp 400-412 Eisele (2003) Should We Measure Corporate Social Responsibility?", 'Corporate Social Responsibility and Environmental Management', Vol. 10, pp 543-545 Fonteneau (1999) "Corporate Social Responsibility: Envisioning Its Social Implications" Akron Business and Economic Review,Vol. 22, No. 2, pp. 165-167. Hancock, J, (2005), Investing in Corporate Social Responsibility, Page 27, Great Britain and United States. Janita, M, Voss, B (2003) "Value for money", Australia CPA, Vol. 72, No. 3, pp. 24-25. Keller, W.D. (2003) the Essentials of Business Law 1, Research and Education Association, United States of America: 44-50 Kercher, K. (2006, December). Corporate Social Responsibility: Impact of globalisation and international business. Bond University Corporate Governance eJournal. Retrieved January 10, 2008, from http://epublications.bond.edu.au/cgej/4 Kimber, D. & Lipton, P. (2005, June). Corporate Governance and Business Ethics in the Asia-Pacific Region. Business & Society, 44[2], 178-210. McWilliams, A., Siegel, D. S., and Wright P. M. (2006). Corporate Social Responsibility: Strategic Implications [Electronic version]. Journal of Management Studies, 43 Mendes (2003) "The social responsibility of corporate management: A classical critique", 'Mid-American Journal of Business', Vol. 18, pp 33-38 Montana, P, J and Charnov, B, H (2000), Management, 3rd Edition, Barron’s Educational Series, United States of America: 98-101 Nagler, J. (2007). What are the achievements of the United Nations Global Compact. working paper, The University of New South Wales. 179-87 Orlitzke, M, Swanson, L, (2002) 120 "Value Attunement: Toward a Theory of Socially Responsible Executive Decision Making" 'Harvard Business Review' pp120-123 Robbins, S, Bergman, R, Stagg, I, & Coulter, M. 2003, Management 3rd edn, Pearson Education Australia, French Forest. 137-40 Robbins, S., Bergman, R., Stagg, I., Coulter, M., 2006, Foundation of Management Foundation of planning. 2nd Edition, Pearson education, Australia Social funds: BHP Billiton Named 'Company of the Year 2005’ 134-38 Simmons, (2002) "Balancing Performance, Accountability and Equity in Stakeholder Relationships: Towards More Socially Responsible HR Relationships" 'Journal of Business, John Moore University' pp1-7 Skinner, (2004), "Head of Corporate Responsibility and Sustainability, Westpac Banking Corporation." Journal of Academy of Management pp40-51 Theaker, A, (2001), the Public Relations Handbook 2nd Edition, Routledge, Taylor, and Francis Group, p15 London and New York Westpac - A Case Study in Socially Responsible Banking (2005) [Website Online] http://www.mallenbaker.net/csr/CSRfiles/page.php?Story_ID=821 Date accessed: 06/11/2008 Windsor, D. (2006). Corporate Social Responsibility: Three Key Approaches. Journal of Management Studies, 43 [1], 93-114. Read More

Comer Industries vice president James Field also argued in regard to foreign sweatshops, stating that 'managers are not politicians or moralists'(Eisele, 2003, p545) and claiming that 'if we don't hire foreign labour, the people will starve'(Eisele, 2003, p546). Mendes (2003:p34) however argues that impact of society's views on foreign sweat shops have changed business practice. Mendes (2003:p34) argues that well publicised boycotts against Wal-Mart and other retailers who carry sweatshop garments demonstrate that price is not the only factor shoppers consider when buying clothes.

In order to improve its image Wal-Mart now employ ethicists on their staff, and stepped up penalties for suppliers using sweat shop labour by immediately discontinuing business with those who use it. Wal-Mart realized the poor public perception it was surrounded in and adapted quickly to societal demands by adopting a strategy of social responsibility to improve it status within the community. Profit Factor Profit is proven to be the motive for social irresponsibility's such as 'cheap labour'.

'Managers of organisations need to recover the money they have invested in the market, and the best way to achieve this is through profit maximisation' (Arrow, 1998, 305). Cooper and Hill (2004:2) argue that the most successful managers of our time do not 'waste their time' with social and environmental responsibility, rather focusing their organisation towards market dominance and maximum returns. For example, in a recent survey by Financial Times regarding the World's Most Respected Companies, the companies that got the top places are not only the ones that act in the society's well being.

The business sector does not always function in a black or white framework, where the most socially responsible organisations are rewarded wholly without exception. The argument of General electrics and Microsoft however is not as simple as it may seem. Cooper and Hill (2004,5) goes on to argue that the way in which Jack Welch reconstructed General Electric would play to the kind of agenda recognisable to advocates of social responsibility, - in particular that of employee empowerment. Bill Gates has also put a large majority of Microsoft's earnings towards charitable organisations perhaps realising the need to adapt to society expectations.

Even the most successful advocates of classical type management theory are beginning to understand that organisations will not survive by focusing on economic objectives only, but realising the important role social responsibility can play in maintaining a successful organisation. Implications of CSR Janita and Voss (2003:24) argues that organisations who consider a strategy of social responsibility must address the question 'to who are we actually responsible', - of which he states are its stakeholders.

To manage a socially responsible organisation, the identification of stakeholders is crucial as without their participation, the corporation cannot survive. 'To a certain extent, management of social responsibility is becoming stakeholder management'(Janita, Voss, 2003, p24). With the entrance of 'stakeholder society', transparency, corporate governance, accountability and public rights are the new maxims for managers today Orlitzke, Swanson, 2002, p121). All organisation within society have social obligations, from being law abiding to not discriminating against minority groups, however the pressure on managers to become socially responsive to issues outside business norms is increasing.

'Social responsiveness is the ability for managers to treat stakeholders carefully and to protect the environment and community within which they operate. (Robbins, 2003, p139) Therefore investing in the relationships of stakeholders can direct to precious competencies that is important in maintaining a competitive advantage. Duncan (2000:3) argues that the role of business in society and the morality of ethics and multi-nationals are not new grounds for public debate.

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