DSST Business Ethics and Society 2

46 csr legal responsibility when a company strives to

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46) CSR Legal Responsibility – when a company strives to meet its contractual obligations a) The public expects companies to obeying laws even when they disagree with them 47) CSR Ethical Responsibility – actions society regards as fair, in keeping with the protection of the stakeholders moral rights a) Activities that are because of the result of laws 48) Thomas Petit – argued for CSR – he believed businesses should work to solve problems they created a) According to Petit, industrial society faces many problems caused by big businesses 49) Avoiding future government regulation and intervention is a compelling incentive for companies to act in a socially responsible manner a) One of the few practical reasons to justify a corporations CSR expenses 50) Archie Carrolls’ definition of CSR includes, economic, legal, ethical and philanthropic responsibilities a) Companies donating computer equipment to a local school is an example of a company fulfilling philanthropic responsibilities a.i) Philanthropic responsibilities are voluntary and include service donations, corporate giving, and partnerships with local government organizations (a.i.1) Another term for Philanthropic Responsibility is Discretionary Responsibility 51) Business for Social Responsibility (BSR) – an organization created in 1992 – encourages socially responsible corporate policies a) Members include: Hasbro, Reebok, Honeywell and hundreds of others 52) Stakeholders – anyone who can affect an organization or be affected by it, a stockholder, employee, customer, even the community 53) Classical Economics – most compelling argument against CSR – a) business exists solely to maximize profits for shareholders and owners b) another argument against CSR – it puts the US at a disadvantage in the international market b.i)the cost of complying with the plethora of complex laws, rules and regulations at the state, local and federal level have a significantly increased the cost of doing business in US 54) Milton Friedman – classical economist – who believed that social issues should be resolved by the workings of the free market system not the responsibility of businessmen a) “responsibility of management to make as much money as possible while conforming to the basic rules of society, as embodied in law and ethical customs” 55) Keith Davis – believed that because business has the resources they should solve social problems
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a) Such as safe work environment, fair advertising, safe products b) Especially since government has tried and failed to solve many general social problems, businesses should use their resources to try and solve them 56) Business Week Poll conducted in 2000, 95% of those surveyed believed companies should sacrifice profit to demonstrate social responsibility to employees and the community a) This would tend to indicate that the public is very much in support of CSR policies 57) Ethical Investing – also known as Social Responsible Investing - includes the selection and management of investments based on
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46 CSR Legal Responsibility when a company strives to meet...

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