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Corporate Social Responsibility Theory •Also manifest in Philanthropy/Charitable endeavors (e.g. McDonald’s Ronald McDonald Houses, Mark Kay’s program to combat breast cancer, Becton Dickinson & Co./UNICEF partnership to conquer neo-natal tetanus and the Bill Gates Foundation war on Tuberculosis, and Gulf Power’s support of a wildlife sanctuary)
Corporate Social Responsibility Theory •Progressive benefits for employees (e.g.Xerox’s and Eastman Kodak’s programs to encourage employee participate in community service projects and SAS Institute’s in house child care, etc.)•Public education (e.g. Norwich Union Insurance of Ireland’s free first-aid courses)
Corporate Social Responsibility Theory •“Man … ought to regard himself, not as something separated and detached, but as a citizen of the world, a member of the vast commonwealth of nature … to the interest of this great community, he ought at all times to be willing that his own little interest should be sacrificed.” - Adam Smith
Corporate Social Responsibility Theory •“But what is most important is that management realize that it must consider the impact of every business policy and business action upon society. It has to consider whether the action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength, and harmony” - Peter Drucker
Corporate Social Responsibility •Social Contract Theory: Business does not exist in a vacuum. It involves a series of interdependent, intertwined, symbiotic relationships and coexists with many other institutions in society, including the family, the church, and the political, criminal justice, and educational systems. Each of these institutions contributes toward making capitalism possible: The court system enforces contracts; the political system provides monetary stability; and the educational system trains future employees and prepares them for the workforce. Therefore, the firm is obligated to "give something back" to those that make its success possible. Business exists only because society allows it and therefore it must satisfy the demands of society. This creates an implicit social contract (see “Changing the Social Contract: A Role for Business”, by Melvin Anshen, Columbia Journal of World Business5 (Nov.-Dec. 1070)
Corporate Social Responsibility Theory •There is also the legal maxim of Salus populi est superma lex- regard for the public welfare is the highest law- R.H. Kersley, Broom’s Legal Maxims.
Corporate Social Responsibility Theory •In the words of General Robert Wood Johnson, founder of Johnson and Johnson: “The day has passed when business was a private matter, if it even really was. In a business society, every act of business has social consequences and may arouse public interest. Every time business hires, builds, sells or buys, it is acting for the people as well as for itself, and it must be prepared to accept full responsibility”
Corporate Social Responsibility Theory •Sol M. Linowitz, Chairman of the Board of
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Ethics, moral principles, Responsibility Theory