Social And Global Implications Of The Corporation's Board Of Directors

What is the corporation’s social responsibility? Many might say the main idea is that a corporation must go further than carrying out their basic function of purely making profits. A corporation must create wealth in ways that avoid under minding society, and instead enrich the society it operates in. The term “corporate social responsibility” has been defined in numerous ways; from the constricted economic perception of increasing stockholder wealth (Friedman, 1962), to economic, legal, ethical and flexible strands of accountability (Carroll, 1979) to good corporate social responsibility to citizens (Hemphill, 2004). These disparities differ from fundamental assumptions of what corporate social responsibility involves. However, one has to keep in mind that the CEO of any corporation is legally the agent of the stockholder, and must focus on what the shareholder wants. More often than not, the shareholder would prefer profits for individual gain rather than spending their money on social projects. Stakeholder groups have increased their influence to enact their agendas. Using profits to fund schools and partake in fixing the environment are all great and wonderful things, but this social tax of using profits for social ends projects goes entirely against democracy. Or does it? Who should truly be held responsible for stakeholders around the corporation? Is it the responsibility of the government, philanthropists, employees, its

Because corporations are established to profit and shareholders invest money with expectations of a greater return, managers cannot be given a directive to be “socially responsible” without providing specific criteria of checks and balances to which needs to adhere. Therefore, it is imperative to the success of a corporation for managers to not act solely but rather to act within the policies of the shareholders.

There are conflicting expectations of the nature of a company’s responsibilities to society. However, those companies that undertake what may be termed ‘Corporate Social Responsibility’ must decide; what are the actual social responsibilities of these companies? I will present a possible paradigm. Also, I will look at the benefit to the business that employs proper management as compared the business with poor management. This research paper describes my view of corporate social responsibility and compares the social responsibilities of Delta Air Lines and Spirit

Many believe that business entities should have an ethical duty to be socially responsible, to work towards increasing its positive effects on society while decreasing its negative effects. Many organizations look for opportunities to be socially responsible while also creating shareholder wealth.

Business corporations are a dog eat world. Business is made up of many aspects from political, social, and environmental responsibilities to those of ethics and responsibility. Every business and major corporation has to deal with these in a much different way. For example, small business’s need more of the social responsibility in order to have more trade and an increased profit. For the major corporations the focus is on what is going on in politics, social, and environmental due to the economy or the state of their countries.

Archie B. Carroll created a pyramid model to describe the economic responsibility, legal responsibility, ethical responsibility and philanthropic responsibility that a company should have toward the global economy (Kreitner and Kinicki, 2013). Within these four domains, a corporation is expected to be profitable, be legal, be ethical and be a good corporate citizen. There are expectations of the model in which economic, social and environmental responsibilities are fulfilled simultaneously (Shum and Yam, 2011). However, it is not feasible to expect the economic responsibility to automatically translate into the social responsibility aspect. Corporations can be led to engage in social responsibility voluntarily to achieve social good when appropriate legal and ethical influences are established (Shum and Yam, 2011).

What is the responsibility of a business or corporation? Is it to meet stakeholder expectations and follow legal guidelines, or is there a higher responsibility? While Milton Friedman asserted in his famous essay that “the social responsibility of a business is to increase profits,” it can be argued that companies also have higher moral responsibilities. The question in each ethical dilemma is, “To whom do we have a moral responsibility?”

Globalism has resulted in a number of changes for the economic viability of the modern corporation. As both the developed world evolves in their new market structure, the developing world adds to the pressures and changes necessary to do business in the contemporary environment. Doing business is not the same worldwide, and the citizens of the global village realize that there are different cultural norms, behaviors, and expectations that stakeholders of all types have when thinking about the modern corporation. Business ethics sets up standards for organizations to act in a way that may be considered right or wrong, or at the very least acceptable or unacceptable. As trade barriers are falling around the globe, differences in morality are gaining more interest regarding such issues as human rights, political behavior or even environmental conservation. The core purpose of a multinational business is to continue to grow the organization, find more resources, develop more product and convert new customers. Without fiscal advantages, organizations would not have the impetus to expand globaly greater profits, less regulation expense, tax incentives, larger universe of workers, etc. Multinational corporations do, however, need to keep in mind that customs, laws, and expectations may very well change by country, but that there are still remaining overall global moral standards of behavior (Mayfield, 2003).

Milton Friedman was an American economist, statistician and writer, who had a massive impact on the research agenda of the economics profession. His famous words “the only responsibility of business is to increase its profits” (Friedman, Milton. 1970) led to many controversial debates on whether businesses should have ethics or if profit should be their main goal. Corporate social responsibility has many definitions, as its interpretation is quite loose, so I have chosen one that relates the most to this essay, given by the World Business Council for Sustainable Development, in 2000: “Corporate social

Corporate responsibility is ultimately about the reasons and ways in which a company sets its values, moral standards, ethical considerations and states an organizational purpose that is based in greater societal good. After this course, I believe the “best practice” of corporate responsibility in a high tech global economy leverages several course methodologies but ultimately 1) the tenets of Gilligan’s Ethics of Care model which balances care for self (or corporation) and care for others, 2) takes triple bottom approach to running a company considering financial performance, social practices and environmental impact and 3) ultimately one defined by Porter and Kramer’s Corporate Shared Value (“CSV”) where economic success is based on a model where societies’ needs are addressed and improved. CSV allows the self-interest necessary for a company to thrive in a competitive and fast changing environment. At the same time, CSV considers that the end game is about creating shared value. Altogether, my definition of the “best practice” of corporate responsibility happens when the company’s bottom line and society’s bottom line are simultaneously served because the societal needs are also at the center of the company’s profit driven goals.

Corporate social responsibility has been one the key business buzz words of the 21st century. Consumers' discontent with the corporation has forced it to try and rectify its negative image by associating its name with good deeds. Social responsibility has become one of the corporation's most pressing issues, each company striving to outdo the next with its philanthropic image. People feel that the corporation has done great harm to both the environment and to society and that with all of its wealth and power, it should be leading the fight to save the Earth, to combat poverty and illness and etc. "Corporations are now expected to deliver the good, not just the goods; to pursue

This business study will analyze the ethical and legal importance of social responsibility in corporate culture. Friedman (1970) defines the dangers of ‘social responsibility” as a threat to the individualism and profit motives of corporate executives that must serve the corporation before the larger society. More so, Friedman argues that the corporation is an “artificial person” that relies on the free markets to correct problems with non-productive, hazardous, or useless products may interfere with the stability of society. Glasbeek’s (2002) critique of Friedman’s “artificial person” defines the problematic propaganda of the corporation

Carroll’s pyramid model inspired debate between “how people ought to behave and how people are likely to behave” and that “behavior may come to dominate theory by appeal to the desirability of material outcomes” (pg. 235). The historical reflection Windsor provided led him to his thesis of the three emerging alternative or competitors to responsibility. Economic conception of responsibility, emerging alternative #1, links wealth and social welfare. By definition, organizations that do not focus on financial profits are labeled “not-for-profit” organizations. Windsor’s second cited emerging alternatives to responsibility focuses on recent movement involving global corporate citizenship. He explains this alternative as a “marriage” of societal expectations of corporations to their community and management obligations to their firm. “The more powerful and wealth the firm, the greater that firm’s responsibilities to neighbors and the community must be” (pg. 242). Windsor’s third emerging alternative is regarding stakeholder management practices. Management psychologies vary widely amongst theorists yet revolve around prioritization of profits.

It has been a long time since I defined the most fundamental and strong motivation of corporations is maximizing business profit. Even after the proposal of corporation social responsibility, I assumed that only the result of unharmed business operation can make company start to consider social responsibilities and until they increased their profits they will remain no more than a bystanders from external issues be it social or environmental.

Companies with extensive responsibilities even argue about the system in pursuing social responsibility of business. According to Ulrich Steger, the company should prioritize the shareholders’ incessant interest but they should also be concerned of their social responsibilities, morals and environmental goals that the public expects them to be. Without a doubt, companies’ primary goal is to earn a profit. Emphasizing on profitability affects the fundamental values in the company, its morality. Companies ignore the ethics just to earn a mountainous income. This often causes extensive repercussions in the companies.