Essay, 2011, 23 Pages
Corporate social responsibility (CSR) activities have been used
to address consumer’ social concerns, create a favourable corporate image, and develop a positive relationship with customers and other stakeholders (Yoon, Gürhan-Canli and Schwarz, 2006, p.377).
The notion Corporate social responsibility (CSR) has provoked an extensive history of academic debate whether corporations have a social as well as financial responsibility to the community or not. The main conflict in this field has been associated with the evolution of the concept and the definition of CSR. Even though this concept has a long and varied history, which arose centuries ago, the formal writing on social responsibility, however, is mostly a product of the past 50 years. During that time, there have been many papers published by academics and business practitioners. Bowen (1953) marks the beginning of the modern period of literature and argued that centralised power of big corporations had influence on the lives of citizens, by company’s actions and decisions. Davis (1960) became famous because he emphasised the correlation between social responsibility and business power and justified socially responsible business decision in light of a good chance of bringing long-run prosperity to the corporation. In arguing against CSR, Milton Friedman (1970) seems to be widely accredited. In fact, he does not dispute the validity of CSR, but rather argues that when these activities are carried out for reasons of self-interest, then they are merely profit-maximization under the cloak of CSR. He set forth that the social responsibility of business is to increase their profits and its managers’ responsibility to act solely in the interest of its shareholders (maximising shareholders-value). This being said as a short introduction to the academic development of CSR, highlights that CSR is not at all common sense and therefore needs further theoretically examination.
Besides these debates in the academic world, there has been also a development in practise. The business world offers numerous examples of companies not only focusing on short-term profit without considering social and environmental issues. There have been an increasing number of companies containing ethical and moral values in their corporate strategy and considering their society and environment as
important factors towards a long-term success. Successful companies such as Body Shop, Stonyfield Farm or Ben & Jerry’s have been establishing strategies which main focus relies on Corporate Social Responsibility and appreciated CSR as a business driver.
The aim of this paper is to critically evaluate social responsibility of business in a global economy. First this paper will put its focus on defining CSR and evaluating whether corporations can even have responsibility. In addition, the author would like to draw attention to CSR theory. Furthermore, this paper should illustrate that the theory of Corporate Social Responsibility helps corporations to differentiate its products and to improve their corporate reputation by acting socially responsible. A company that is actively recognised in that field should prove this argument. The chosen firm is Ben & Jerry's Homemade Inc.
Blowfield and Frynas (2005) betoken CSR as an umbrella term because this theory enfolds a range of concepts and practices. They consider CSR as a heterogeneous and incoherent concept which recognizes
... (a) that companies have a responsibility for their impact on
society and the natural environment, sometimes beyond legal compliance and the liability of individuals; (b) that companies have a responsibility for the behaviour of others with whom they do business (e.g. within supply chains); and
(c) that business needs to manage its relationship with wider society, whether for reasons of commercial viability or to add value to society (2005, p.503).
Some of the theory associated with CSR such as the stakeholder- and shareholder theory will be lighted thereinafter. First it is necessary to define the term CSR and deepen into this notion.
In literature, there are multiple approaches for defining Corporate Social Responsibility. Therefore it is crucial to define the notion of CSR. Joseph W. McGuire was an important contributor to the definition of social responsibility during the 1960s. He sated, “The idea of social responsibly supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society which extend beyond these obligations” (1963, p.144). This definition shows its remarkableness, if one compares it to a more recent published definition by McWilliams and Siegel. They define CSR ““ as actions that appear to further some social good, beyond the interest of the firm and that which is required by law” (2001, p.117). These definitions are similar and both encompass that a corporation has far more obligations than just obey to law. Whilst these definitions emphasise the responsibility of corporation, Friedman argues that “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” (1970). This leads to the question whether a Corporation could even have certain types of responsibility. Therefore it might be helpful to define the term corporation and to scrutinise whether a corporation can be morally responsible for its actions.
Defining the term Corporation may seem to be obvious, but there have been many discussions about whether a Corporation can be morally responsible for its actions. A corporation identified by Crane and Matten ““ is essentially defined in terms of legal status and the ownership of assets” (2010, p.46). In legal terms, a corporation is considered as independent from its people who work for them, invest in them, manage them or receive products or services from them. This implies that a corporation can survive the death of any individual, which were in relationship with the entity, by only recruiting new ones. Therefore, corporations are regarded as having perpetual succession. Besides the legal status, the entity is owned by the public, e.g. by the shareholders. However, this does not encompass that the shareholders possess the assets of the corporations, such as factories, offices, computers and machines. These kinds of assets are owned by the entity. Furthermore, these ramifications are important towards the understanding of
Master's Thesis, 128 Pages
Master's Thesis, 128 Pages
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