Social responsibility as Business Ethic

Social responsibility can be termed either ethical or ideological. Kaliski, (2001) gives the definition that, “social responsibility can have a negative impact where it is a responsibility to refrain from acting (resistant stance) or there is a positive impact where it is a responsibility to act (proactive stance)” (Kaliski, 2001). Now in the business aspect of things, I personally wouldn’t use the term social responsibility but I would include what the Corporate Social Responsibility is.

Carroll & Buchholtz (2006), give two definitions to corporate social responsibility which are “ considering the impact of the company’s actions on society” and “the individual to consider his acts in terms of a whole social system, and holds himself responsible for the effects of his acts anywhere in that system. (Carrol & Buchholz, 2006). ” These two definitions are complete opposites but do tie in social responsibility. The first definition of course describes what social responsibility means in a business world, while the second definition ties into what social responbilities main purpose is towards society.

In today’s society businesses must maintain ethical practices to be successful. In (Kaliski, 2001) explanation on Social Responsibility and Organizational Ethics, the author states that businesses can use ethical decisions or responsibilities to strengthen their business in three ways. The first way is stated by increasing businesses productivity. “This can be done through programs that employees feel directly enhance their benefits given by the corporation, like better health care or a better pension program. One thing that all companies must keep in mind is that employees are stakeholders in the business.

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They have a vested interest in what the company does and how it is run. When the company is perceived to feel that their employees are a valuable asset and the employees feel they are being treated and such, productivity increases (Kaliski, 2001). ” Kaliski describes the second way that a business can make ethical decisions are “by making decisions that affect its health as seen to those stakeholders that are outside of the business environment. (Kaliski, 2001)” Lastly it is stated that the third way is “making decisions that allow for government agencies to minimize their involvement with the corporation (Kaliski, 2001).

” I support Friedman’s opinion on social responsibility where he gave the example of the corporate executive giving his own responsibilities to certain things as family, charity and church as recognizable and voluntary but at the same time Friedman concludes that “these are social responsibilities of the people, not the business (Friedman, 1970). ” Now if this example played more into a corporate setting and the corporate executive created certain responsibilities that had an impact on the corporation and society then I would again deem the term corporate social responsibility.

My opinion or definition on social responsibility is easily internalized, where I believe that we either have a responsibility to choose what is right or wrong not socially but in society. So in explaining social responsibility, I would say that social responsibility is more depicted towards society and is more ideological than ethical. To me being social responsible is more about your views and beliefs towards society and the responsible manner you play behind it. Social responsibility is too broad, it doesn’t just look at the business aspects of things but also it looks at governments, organizations, corporations, and even the individual.

Kaliski, (2001) again brings up certain questions that I have tried to presume help in when including social responsibility towards a business, Kaliski puts, and “this brings us to the next question in the search for the meaning of socially responsible ethics and what it means to business. Can a business be socially responsible? If it can be then what criteria does it need to ensure that it is perceived in this manner? For each business it must be a different measure. After all, each business is trying to reach different goals. However, there are four areas that should be measured no matter what the outcome that is needed.

Those measurements are Economic function, Quality of life, Social investment and Problem solving (Kaliski, 2001). ” Again, does this mean if a business reaches these measurements, then they are presented as socially responsible? I think not, I would consider them maybe corporate socially responsible and even though there is the same word usage, the definitions portrait two different meanings. Business Ethics “Business ethics examines issues of right, wrong, fairness, and justice that arise in the commercial realm on business (Carrol & Buchholz, 2006).

” Business ethics is such again a broad term just like it is stated with social responsibility. There are many outlines to business ethics, where business ethics present a company’s general overall view of their philosophy for their business. But it goes much deeper than that and this is where the outline comment comes into play with other ethical identities are presented, such as: Professional Ethics, Ethics in Human Resources, Sales Management, Accounting, Production, International, and Economic Systems, etc… Now don’t get me wrong some of the ethical issues stated in each of these outlining topics probably do overlap.

But the point being made is that there is more business ethics than just a common definition that states what is right or wrong in a business. Drucker gives a very good detailed explanation of what business ethics is and how it has evolved and the different views. But the thing that concludes with my state of business ethics being too broad is shown up in Drucker’s reading. He states these common things “surely “business ethics” assumes that for some reason the ordinary rules of ethics do not apply to business.

“Business ethics,” in other words, is not “ethics” at all, as the term has commonly been used by Western philosophers and Western theologians. What is it then? It’s casuistry, prudence and self-development, interdependence, and organizational (Drucker, 1970). ” Drucker explains all of these points in his writing, but my point is to show that the topic is too broad when it comes down to explaining business ethics in general. Some people believe that business ethics main principle is to maximize return to its owners.

“Under this view, only those activities that increase profitability and shareholder value should be encouraged, because any others function as a tax on profits. Some believe that the only companies that are likely to survive in a competitive marketplace are those that place profit maximization above everything else. However, some point out that self-interest would still require a business to obey the law and adhere to basic moral rules, because the consequences of failing to do so could be very costly in fines, loss of licensure, or company reputation (George, 1999).

” Comparison of the Two Articles Both Freidman and Drucker give great examples and explanations towards their view on the certain topics at hand. My view on the comparison of the two articles is not so much the comparison of business ethics but of social responsibility towards the corporate setting. Don’t get me wrong this type of corporate social responsibility can be categorized as business ethics, but if we are looking to describe just the term social responsibility then let’s look at it from the two sides.

The first thing that caught my eye in the whole comparison of the pieces of literature was that both authors consider a social responsibility to be more of a political statement than that of the market statement. Drucker first writes “In the first place casuistry must end up becoming politicized, precisely because it considers social responsibility an ethical absolute. In giving primacy to political values and goals it subordinates ethics to politics. Clearly this is the approach “business ethics” today is taking.

Its very origin is in politics rather than ethics. It expresses a belief that the responsibility which business and the business executive have, precisely because they have social impact, must determine ethics-and this is a political rather than an ethical imperative (Drucker, 1970). ” While it is stated in Freidman’s view point that “social responsibility involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scare resources to alternative uses (Freidman, 1970). ”

Drucker compares business ethics and social responsibility towards the term “casuistry” which he explains with a ruler and their responsibility to themselves and their kingdom, he is quoted by saying “casuistry asserted that rulers, because of their responsibility, have to strike a balance between the ordinary demands of ethics which apply to them as individuals and their “social responsibility” to their subjects, their kingdom-or their company (Drucker, 1970). ” Now something that seems really comparable to this from Friedman’s standpoint is the same view in a way but just the use of a different explanation.

“The corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily -- to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, and even to leave his job, for example, to join his country’s armed forces. If we wish, we may refer to some of these responsibilities as “social responsibilities.

” But in these aspects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not of business (Freidman, 1970). ” The comparability to these to view points is as follows that as much as the situations are ethical in a business environment, that each of the individual examples each have a responsibility to his one self (individuality) and to his or her company at hand.

To me the two comparison examples that preaches more on social responsibility than anything proves that again social responsibility is more evaluated and accepted not in a business practice term but towards the actions and responsibility that one has on certain societal situations. I have tried to open and see the other aspects of views that maybe institutes social responsibility into a business aspect, but have yet to put the two pieces together.

The comparison is in the writings, even though there is social responsibility towards a person’s “kingdom” or “business” it does represent more of an aspect to the persons willingness to be responsible to society. Contrast of the Two Articles When comparing the two articles, more comparison was on the view point of social responsibility but the contrast of the two articles focuses more on aspect of business ethics. Drucker spends far more time finding out the meaning of business ethics, and as stated earlier he breaks it down into more of different types of samples and other meanings than just the overall view of business ethics.

Again, Freidman’s view was more on social responsibility being the term that faces and encourages business ethics, but what I found interesting was a little excerpt from George, (1999) in his titled book “Business Ethics,” here George is explaining the issues that approach business ethics, and even though this quote was used earlier in the writing, he states “some point out that self-interest would still require a business to obey the law and adhere to basic moral rules, because the consequences of failing to do so could be very costly in fines, loss of licensure, or company reputation.

The noted economist Milton Freidman was a leading proponent of this view (George, 1999). “ If this is the case, then it is noted that Freidman was a view point on that ethical decisions are made on the basis of consequences and not just on their social responsibility to their company and their actions. Now one could argue in depth that it is ones social responsibility to adhere to basic moral rules and the consequences that follow. But the contrast is that while Drucker believes that business ethics comes from one’s social responsibility to himself and his kingdom,

Casuistry, “Business ethics undoubtedly is a close parallel to casuistry. Its basic thesis that ethics for the ruler, and especially for the business executive, has to express “social responsibility” is exactly the starting point of the Casuist. But if “business ethics” is casuistry, then it will not last long-and long before it dies, it will have become a tool of the business executive to justify what for other people would be unethical behavior, rather than a tool to restrain the business executive and to impose tight ethical limits on business (Drucker, 1970). ” Conclusion So what does this all mean?

My view on the contrast is that one is using the philosophy that business ethics is based on decisions and behavior from Drucker’s standpoint, to the contrast that, business ethics is based on consequences of certain business situations. Business ethics is broader in its term and uses more than just right and wrong in business aspects. There are far more things that cause business ethics to be a stable-ford in the business world. One’s behavior and responsiveness to situations is a main component to business ethics but that can’t be the determining factor when trying to pursue the actual meaning and how it affects a business.

And even when social responsibility is a main component to business ethics and is quite equal on some aspects of the term, there will always be the argument that if it leans towards someone’s responsibility, is the decisions that are being made ethical, and if so is it more towards the person’s responsibility to society or to one’s business?

References

1. Carroll, A. B. , Buchholtz, Ann K. (2006) Business & society: Ethics and stakeholder management Mason, Ohio: South-Western ISBN: 0324225814

2. George, Richard T. de (1999). Business Ethics. Prentice Hall Publishing, ISBN: 01307977723

3. Drucker, P. (1970) What Is Business Ethics New York, N. Y. New York Times Magazine pp. 32-33, 122-124, 126

4. Friedman, M. (1970) The Social Responsibility of Business to Increase Its Profits New York Times New York, N. Y. pp. 32, 33, 122-124, 126

5. Kaliski, B. (Ed. ). Social Responsibility and Organizational Ethics. (2001). Encyclopedia of Business and Finance (2nd ed. , Vol. 1). New York: Macmillan Reference.

6. Kaliski, B. (Ed. ). Ethics in Management. (2001). Encyclopedia of Business and Finance (2nd ed. , Vol. 1). New York: Macmillan Reference.

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