Corporate Irresponsibility: Is this still happening?
Abstract
Debate about responsibility of business is once again topical and relevant due to
considerable adverse publicity surrounding reports of unethical business practices by
corporations. Consequently, there has been an exponential rise in both interest and
community concern about ethical dimensions of the behaviour of business (Brunton & Eweje,
2012). Regardless of where corporations operate, it seems the allege irresponsibility of
business is getting louder as against the responsibility of business whereby corporations are
expected to behave in a responsible, ethical, and moral manner. Are we back to the era
posited by Vogel (1992) that in the pursuit of profit, businesses have exhibited all sorts of
socially irresponsible corporate behaviour, such as “deceiving customers, swindling
investors, exploiting and even brutalising employees, putting consumers at risk, poisoning
the environment, cheating the government, and more” (Campbell, 2007, p.947).
Thus, one could argue that the integrity of business is once again questioned.
Interestingly, as argued by Foster (1993), integrity has appeared in about 20 percent of
company mission statements. This begs the question: does the concept of integrity adequate
to guide the many kinds of everyday decisions crucial in the business world (Audi & Murphy,
2006)? Following on this argument, does it mean that the perpetual irresponsibility of
business as we are seeing in the 21st century is a direct result of lack of integrity in business
as the term has been “credited with underlying numerous morally positive dispositions, and it
absence has been blamed for myriad wrongs” Audi et. el., (1993, p3).
Corporate ‘responsibility’ is continuously debated in academic and business
communities due to pressure from stakeholders to demonstrate social and environmental
responsibility. The pressure is further compounded by the belief that businesses should ‘give
something back’ to the community in which they operate. The call to be responsible is
complicated further by the global reach of the business environment. Recent events serve to
highlight the importance for organisations to ensure that they behave in a responsible manner,
irrespective of the context in which they are undertaking trade. Despite the increased
academic interest and the recognition by corporates that they need to conduct themselves in a
responsible manner, this ideal is not always achieved. There are many complex factors to be
considered in increasing our understanding as to why this might be the case.
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This paper investigates the applicability of legitimacy theory and stakeholder theory
in the context of corporate responsibility and irresponsibility. The aim is to develop a deeper
understanding of the circumstances under which organisations might be seen as responsible
or irresponsible. The present study examines the reasons behind the so called irresponsibility
of business in the 21st century by investigating two recent cases in New Zealand (NZ) where
businesses have been perceived to behave in an unethical and irresponsible manner.
Specifically, this paper examines Fonterra , the largest NZ company and largest global diary
company, and Zespri, a NZ largest kiwi fruit exporter. As argued by Maignan & Ralston
(2002) that the tendency toward socially responsible corporate behaviour varies across
countries, and that much more research is needed to understand why. Thus, this paper
provides a fantastic opportunity to understand responsibility and/or irresponsibility of
business from NZ context. Two cases from NZ are used to explore the implications of
organisational responsibility and irresponsibility in sectors that by the nature of their
consumption impact heavily on end consumers in the course of their business. Each
theoretical perspective enriches our knowledge of how organisations relate to their
stakeholders to create a position that is mutually beneficial. More specifically, the focus of
this paper is to reflect on how corporate social responsibility (CSR) and corporate social
irresponsibility (CSI) align with empirical reality using examples from the contemporary
business environment. We do this by building an in-depth case profile of two widely-reported
incidents that have come under some scrutiny. The paper demonstrates that despite the
business intentions to be seen as socially responsible, their recent behaviour appears to be the
opposite.
References:
Audi, R., and Murphy, P. E. (2006). The many faces of integrity. Business Ethics Quarterly,
16 (1), 3- 21.
Brunton, M. A. & Eweje, G.: 2012. Communicating Ethics: The Role of Culture in Ethical
Perceptions. Journal of Business Ethics Education, 9, 7-26.
Campbell, J. l. (2007). Why would corporations behave in socially responsible ways? An
institution theory of corporate social responsibility. Academy of Management Review,
32 (3), 946-967.
Foster, T. R. (1993). 101 Great mission statements: How the world’s leading companies run
their businesses. London: Kogan Page
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Maignan, I. and Ralston, D. A. (2002). Corporate social responsibility in Europe and the US:
Insights from businesses’ self –presentations. Journal of International Business Studies,
33, 497-514.
Vogel, D. (1992). The globalisation of business ethics: Why America remains distinctive.
California Management Review, 35(1), 30-49.
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