Corporate Social Responsibility is Not a Choice
Why corporate social responsibility is required for businesses to succeed.
Final Paper
By
Tara Carling
Business 1050-002
Jeanne Westgard
December 16, 2011
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Corporate Social Responsibility is Not a Choice
Why corporate social responsibility is required for businesses to succeed.
‘We are going green! Help us save the whales! Donate for children in need! These are all
slogans companies are using today to promote their business. Companies are trying to show that
they help the community around them and make a contribution to the world. This obligation can
be thought of as Corporate Social Responsibility or CSR, as it will be referred to in this paper.
CSR can be defined by Howard Bowen as, “the obligations of businessmen to pursue those
policies, to make those decisions, or to follow those lines of action which are desirable in terms
of the objectives and values of our society” (Lee 57). This paper will look further into the
definition of CSR and examine the evidence for and against companies practicing CSR using
Heilbroner and Freidman as examples. The paper will also examine the Harvard Business School
Case Study involving pesticides as a look at poor CSR in action. Finally this paper will discuss
why it is important for companies to practice CSR to be successful in today’s corporate world.
Freidman and Heilbroner were not the first, but one of many who have started a debate
about CSR. Heilbroner was for CSR and Freidman was against CSR. Heilbroner’s claim was that
by starting a corporation that individual or corporation took on the social responsibility that came
with starting a business in a certain community. That would mean a corporation started in Salt
Lake City already accepts the responsibility they have for the city by opening a business here.
Freidman, on the other hand, is against CSR because he believes that corporations do not have a
responsibility to the community, but rather to their stock holders. He argues that corporations for
many years have been established to make money and that is their main purpose. The cycle of
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using customer’s money to improve their own community and have them continue to buy from
their business and start the cycle over again is not something Freidman agrees with.
However, questions arise when a corporation does not just disregard helping a
community, but instead, starts to damage a community. This can be examined through the case
study by Harvard Business School Note on the Export of Pesticides from the United States to
Developing Countries. As a summary, this case study looks at the argument of the exportation of
pesticides. The argument begins because some United States companies began distributing
pesticides that were not approved in the United States to developing countries. These pesticides
were considered dangerous in the United States and were not allowed to be sold in the country.
Yet, in other countries with lesser standards, they were legal and bought in abundance
(Whiteside 1-19). The questions arises as to whether the corporation who sold the pesticides still
sell the products with full understanding that they are dangerous and could cause irreversible
harm to the food, workers, or country in general.
This question has several different answers. CSR is a wide subject that has multiple
definitions. The definitions change as does the way our society thinks about CSR through the
past few decades. A true discussion or theory regarding CSR was not even established until the
1950’s by Bowen. The discussion has since continued, slowly but surely, and CSR is now a
widely accepted practice. Yet, it is still difficult to agree on one solid definition of CSR and that
makes it difficult to see where the legal line is drawn. Such as with the pesticide case study, there
are some who believe that the pesticide companies should be held responsible for any harm done
to the workers or consumers because of the direct use of dangerous pesticides. Corporations
contend that once they sell the product to a willing party, they are no longer held responsible. It
can be compared to selling a knife. Many would say that it is not reasonable to hold the
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corporation that made a knife responsible for a death caused by someone using it. Pesticide
companies try to use the same argument. There is a fine line that has not been clearly set as of
now.
Naturally those who believe corporations should adhere to CSR have a multitude of
reasons as to why it is so important. One of those reasons is the fact that large corporations have
so much influence in the community. These corporations usually have a steady stream of
customers that have gained some level of trust in the company. That company now has an
opportunity to influence its customers. People will ignore a mass e-mail sent to thousands of
people about a family in need, but as soon as a large local business puts up a sign, people begin
to pay attention. As in any case, this influence can be used for the greater good, or disregarded
by the business.
In addition, corporations can use CSR to benefit their business. In the ever changing
world, a large array of customers will only purchase from companies who use part of their profit
to make a contribution to the community. Years ago this was not the case, but in today’s society
how you interact with your community makes a difference to consumers. This is partly based on
the fact that consumers have a larger choice of companies to choose from than ever before. Also,
consumers at times have a somewhat tainted view of large corporations as heartless money
makers. Large corporations need CSR to provided consumers that warmth and caring they expect
them to have. It is not a difficult assumption to make that when one CEO is known for donating
money to a children’s charity and another is known for keeping all his money to himself and
buying a yacht, consumers will choose to purchase with the CEO that gives back. Along the
same lines, if a company with several entities has recently been in the news about one bad
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business decisions, such as selling dangerous pesticides, all the other entities of the business will
suffer as well.
Finally, the argument continues that companies have a moral and ethical responsibility
for CSR simply for the fact that they are a company. Set aside for a moment the thought that
companies should provide extra for their community and examine the issue that they should
simply not cause any damage. This section of the argument states that companies have a moral
responsibility to do everything in their power to not knowingly cause any harm to their
consumers, employees and community. It is important to examine where the companies
responsibility lies. Even the groups of individuals who agree with CSR have different thoughts
regarding this part of the argument. Some argue that companies have sole responsibility for
products that they sell. This would include adding any warnings to their products as to any
dangers it may pose. There are others who argue that the company only has responsibility to the
point of sale. After that, the consumer would assume any responsibility for the product. A solid
answer for this has yet to be determined and countless lawsuits are brought upon corporations for
this debate every day.
Yet, in conclusion, there is a definite answer to all of these questions. Companies have a
responsibility to add positive results to their community. Any company who is causing harm or
damage to the community they are established in or the community they are selling to should
cease production immediately. Any company who knowingly sells a harmful product should be
held responsible. It should also be their responsibility to inform the consumer clearly of any
potential harm caused by the product. CSR should be deeply regarded by all companies, big or
small. With excess wealth, it is morally sound to put that money back into the community and
help fellow citizens. Just as an individual must work to keep their community clean and safe, a
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corporation needs to do the same. Working for a large hotel corporation who holds CSR as an
important business tool, one can learn many ways it can help your business as well as the
community. This hotel chain has a strong tradition of community service. This gains the trust of
the community and gives back to the business when those individuals recommend the hotels. In
addition, the corporation believes in helping the environment which also gains the trust of the
community and offers the same results. When a corporation gives to the community, they also
give back to their business.
Along the same idea, corporations who blatantly disregard CSR and cause harm to other
individuals, should be held to stricter punishments. Fines and consequences should be on a fitting
scale of the damage they cause from their products. Corporations should not be given any
licenses to create harmful products in this country to export to other countries. Corporations who
continue to make harmful products should be ordered to cease production immediately. We must
hold companies to high standards of CSR to see exceptional results. CSR is what our country
must adhere to now to keep our businesses above other countries. The knowledge we have
gained over the years cannot be ignored and brushed off for a profit.
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Bibliography
Lee, Min-Dong Paul. "A Review of the Theories of Corporate Social Responsibility: Its
Evolutionary Path and the Road Ahead." International Journal of Management Reviews
10.1 (2008): 53-73. Print.
Whiteside, David E. "Note on the Export of Pesticides from the United States to Developing
Countries." (1983): 1-19. Print.