Profit Maximisation v/s CSR
Economists are of the view that the social responsibility of business should be limited to its economic duty. Discuss.
In broad terms, social responsibility is an ethical theory that an entity, be it a company or an individual has an obligation to conduct its activities to benefit society at large. Carroll, in his 1991 article "The Pyramid of Corporate Social Responsibility, identifies four areas that make up a corporate social responsibility pyramid: legal, economic, ethical and philanthropic. According to Carroll, “corporate social responsibility involves the conduct of a business so that it is economically profitable, law abiding, ethical and socially supportive”. This particular pyramid identified by Carroll adjusts the economic responsibility of a company as the base of the pyramid where all the other three responsibilities lie. Yet, is it such that the social responsibility of business is limited to its economic duty or should a company consider its other social responsibilities of adequate importance? An analysis is guaranteed to shed light on the issue.
(Importance of business ethics)
First and foremost, we can argue that the social responsibility of a business must go beyond its economic duty. The most obvious reason is that a business must be ethically responsible. The ethical responsibility brings us to what is generally expected by society over and above economic and legal expectations. Should a company only focus on profit maximization of its activities without a conscience of the consequences of its activities? It is today a prerequisite for a good corporate image to execute in a custom consistent with social standards and ethical norms.
Ethics are the principles and values an individual uses to govern his activities and decisions. In an organization, a code of ethics is a set of principles that guide the organization in its programs, policies and decisions for the business. The ethical philosophy an organization uses to conduct business can
In broad terms, social responsibility is an ethical theory that an entity, be it a company or an individual has an obligation to conduct its activities to benefit society at large. Carroll, in his 1991 article "The Pyramid of Corporate Social Responsibility, identifies four areas that make up a corporate social responsibility pyramid: legal, economic, ethical and philanthropic. According to Carroll, “corporate social responsibility involves the conduct of a business so that it is economically profitable, law abiding, ethical and socially supportive”. This particular pyramid identified by Carroll adjusts the economic responsibility of a company as the base of the pyramid where all the other three responsibilities lie. Yet, is it such that the social responsibility of business is limited to its economic duty or should a company consider its other social responsibilities of adequate importance? An analysis is guaranteed to shed light on the issue.
(Importance of business ethics)
First and foremost, we can argue that the social responsibility of a business must go beyond its economic duty. The most obvious reason is that a business must be ethically responsible. The ethical responsibility brings us to what is generally expected by society over and above economic and legal expectations. Should a company only focus on profit maximization of its activities without a conscience of the consequences of its activities? It is today a prerequisite for a good corporate image to execute in a custom consistent with social standards and ethical norms.
Ethics are the principles and values an individual uses to govern his activities and decisions. In an organization, a code of ethics is a set of principles that guide the organization in its programs, policies and decisions for the business. The ethical philosophy an organization uses to conduct business can