Is Social Responsibility a consequence of human morality or just a corporate jargon?




Eng. Maritza Vargas
TERRA-DEVELOPMENT
Emai: maritza@terra-dev.org

The answer to this question is not nearly as straightforward as many business ethics literature may reflect. It can be debated and argued by different schools of thoughts, ethicists, moral philosophers, sociologists, leaders, social scientists and corporate managers, among others. Therefore, willing to be impartial before resolving the paradox, let’s have a look to some basic concepts such as: moral, values, ethic, altruism, charity and the different types of responsibilities - social, ethic, environmental, civic and corporate responsibilities.

Surfing the web (www) we found that most of big corporations, societies, organizations, governmental institutions, supranational bodies - like UN and EU- and even some small and medium size enterprises (SMEs) pride themselves on their social responsibility. When visiting their websites, one can easily find a tab for “CSR”, “Global Citizenship” or “Sustainability” all of them full of good intentions, with altruistic motivations. There, companies and organizations describe how they contribute to the community, balancing their impacts on the environment. But, why do they do that? What is the purpose of sometimes going beyond legislation adopting an ethical dimension of social and environmental responsibility? Is it to satisfy public demand? Or maybe, because they acknowledge the profit to be made by implementing CSR policies? Or is it because they increase market share by satisfying stakeholders with very little investment, even sometimes just through “green marketing campaigns”.

There is a famous quote by Milton Friedman’s 1970 article that states: “There is only one social responsibility for business – to increase its profits”. He argues that “A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" cannot be said to have responsibilities”.

He explains that if a corporate executive decides to make the organization more “socially responsible” and refrains from increasing the price of the product in order to contribute to the social objective of preventing inflation; or if he makes expenditures on reducing pollution beyond the amount required by law to improve the environment; or if he hires "hardcore" un­employed instead of better qualified available workmen to contribute to the social objective of reducing poverty, he would be at the same time be working against the best interests of the corporation and its shareholders. Insofar as his actions in accord with his "social responsibility" reduces returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending “their money” and that is not “morally correct”, nor it is “socially responsible”.

Even if Milton Friedman’s quote is true and “Social responsibility” is just a corporate jargon, we should recognize that the purpose behind it is to satisfy a human group, an evolved part of the society concerned for the wellbeing of humankind. Those stakeholders that put pressure on corporations to behave more responsibly are the ones accountable for the change, and it is actually their “human morality” who drives them to demand for “Social responsibility”.

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