We all know that profit an enterprise earns is not only made by itself, but also by a result of the interaction between consumers, politics and the society environment of the enterprise being at. If an enterprise wants to operate in the long run, it needs to be concerned about the problem of its surrounding environment. Also, only a corporation which can shoulder responsibilities of society and obey the rule of ethic deserves to obtain support from the society. In this essay, I am going to discuss about whether if the strategy of Corporate Social Responsibility is relevant.
The concept of Corporate Social Responsibility (CSR), like ethics, is easy to understand: it means distinguish right from wrong, and doing right. It means being a good corporate citizen. The formal definition of social responsibility is management’s obligation to make choices and take actions that will contribute to the welfare and interests of society as well as the organization (Szwajkowski, 1986: Davis et al.
, 1979). CSR is a kind of philosophic conception, it does not have tangible executive criteria and rules. A lack of the spirit of CSR, we cannot find the meaning and reputation of why this enterprise exists.
Companies and people need profounder meaning of exist. Nowadays, CSR strategy is overall acceptable by the managers of every enterprise. However, there are numerous of people have been arguing about their different beliefs, many of the experts debate about CSR. Milton Friedman and others have argued that a corporation’s purpose is to maximize returns to its shareholders, and that since (in their view), only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. Milton Friedman have pointed out this in his book, Capitalism and Freedom: “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Friedman, 1962). Most of the managers and laws supported this concept in the early days. “Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but ‘business’ as a whole cannot be said to have responsibilities, even in this vague sense”. (Friedman, 1970)
In addition, in the 1996 speech of Roger Kerr, the argument that “the activities of private business are socially beneficial so long as they are conducted under the rule of law and within a framework of open competition. When subjected to those disciplines, business by and large promotes its interests in a way that promotes the interests of the whole community, and, moreover, promotes the community interest more efficiently and reliably than any other economic arrangement.”(Kerr, 1996) If the corporate business take too much responsibility of society, then Basically, the function of an enterprise organisation is to create profit, and government should solve the problem of society by the taxes it imposes. I wonder if the more responsibility the enterprises take, then there are no much differences between an enterprise and government, moreover the enterprise will end up being a monopolizing organisation.
On the other hand, R J Hubbard presents a different point of view from Milton Friedman and Roger Kerr. “shareholders aren’t the only group of people that have a stake in the success of a company and that other stakeholders are employees, customers, suppliers.”(Hubbard,1996) And “business owners and business managers should try and reconcile the interests of the various stakeholders.” (Hubbard,1996) “as shareholders in a company one gets certain privileges from society as delivered through government.” “limited liability, the ability to earn a dollar over and above that of the average wage or salary earner and a host of other benefits.” Thus, “one should not only receive these privileges but also give back to the society that has made them available.”(Hubbard, 1996) The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time. (Carroll, 1979) To sum up, I consider Corporate Social Responsibility to be a sensible strategy.
But we should not solely put emphasis on CSR without considering business’s goal of maximizing profit. CSR will be desirable if corporate increase its profit though such conduct and society as a whole is the beneficiary. Nevertheless, how much responsibility should a corporate burden with? This is a constantly difficult problem to grasp. To a corporate, it should evaluate capacity itself and balance the benefits inner and outer before taking certain responsibilities. Word count : 769 Reference List Friedman, M. (2002) Capitalism and Freedom. Chicago: University of Chicago Press. Hubbard, R J. (1996)The business of business is not just business Samson, D., Daft, R L. (2003)Management South Melbourne, Victoria