Initial discussion (completed):
After reading Barnes and Smith, what are your thoughts on whether Corporations have a responsibility to society beyond maximizing profit? Do you agree with Peter Drucker that if corporations are to continue to enjoy success managers must step beyond self-interested behavior and assume responsibility for the public good? Or, do you agree with Milton Friedman, that spending shareholder's property against their wishes is immoral? Support your conclusions with outside references and resources.
I agree that any organizations and corporation’s responsibility is not limited to increasing its product line and merchandises and maximizing profit only, but also to the society and its people based on the readings of Barnes and Smith. I believe that every corporation is part of the society and its activities influence the external environment beyond economic, legal, ethical and discretionary expectations from them. The organization activities may have impact on the consumption of natural resources as an element of its production process as well as the enrichment of the communities by providing and creating employment opportunities . On a similar note, Peter Drucker’s claim equally suggests that the success of a manager, not only through his operation and his team, must go beyond the company but also benefit the public as well. A responsible leader, according to Roome and Bergin, refer to people with highest integrity and has a profound understanding of concepts related to the public such as sustainable development, at the same time has innate sense of purpose . I also believe that a total fulfillment of the success of a company should not only revolve around the four corners and pillars of the company. Its values should involve sharing and extending its success and commitment to continue supporting the lives of the people it serves. On the other hand, I believe that it is immoral to spend a shareholder’s property against their will as the law protects its wealth and possessions and everyone in the company has the legal obligation in it. Spending their property must take due process and consider all legal procedures and based the decision to sell the property from the result of the rigid investigation.
References:
Crowther, D., & Aras, G. (2008). Corporate Social Responsibility. Ventus Publishing.
Roome, N., & Bergin, R. (2006). Sustainable development in an industrial enterprise. Business Process Management, vol.12, issue 6 , 696-721.
What needs to be done: Respond to a minimum of two of the following students posts with substantive (at least 80-100 words) responses:
- Write a response to these two (2) students (at least 100 words) with 1-2 references:
An idealist would state that businesses should embrace social responsibilities because it serves the greater good, and ultimately people are good. A realist, on the other hand, would say that running a business is all about making profits, because, in the end, a business is all about making profits – it would cease to exist if not. I tend to agree with both views, but ultimately it is impossible to disagree completely with Friedman’s (2007) realistic and rational view.
Considering the view of an idealist, running a business in today’s modern world requires that the organization embraces social responsibilities. And when we say modern, it is not necessarily recently. Weicker (1932) noted, over 80 years ago, that businesses are not just money-making entities, they are a part of the society, and the social consciousness among businessmen is increasing. An organization, even though an intangible entity, utilizes the society to run its businesses. It utilizes, amongst other things, the surrounding natural resources and people. As such, utilizing the resources made available by the society, brings on a responsibility to give something back (i.e. the social responsibility). In addition, an organization that would refuse to take on any social responsibilities would probably in the end go out of business, because they would violate laws, or people (i.e. the customers/demand) would despise them. In the end, people (i.e. the managements) are good and enjoy giving something back to the society. If people did not have a good heart, we would probably not be here today.
On the other hand, looking through a realist’s glasses, it is all about profits. Organizations would probably not give away money to the society just to be good. Imagine a board meeting where it is decided that the organization should donate a couple of millions just because they are kind. It would be naïve to think so at least, as I am sure that most board members would be thinking that the donation could benefit the organization in some way (e.g. being perceived as an organization that donates money to something good could lead to increased demand for their products, or the government could give them easier treatment in terms of law, regulations, and taxes). Also, one could argue that there is no need for an organization to take on any social responsibilities, as these responsibilities would inevitably come into being in terms of laws, regulations, taxes, and customer demands, as a result of the dynamic markets and world it is operating within.
In sum, I am sure that there are people with a good heart in the managements and boards of any organization. Nevertheless, I am also certain that these people in the end are focusing on the profits. Because, if a business is not profitable it will eventually cease to exist. Ultimately, Klein (1998) makes a good, and perhaps a concluding, point when he proposes that realism is necessary to make idealism effective.
References:
Friedman, M. (2007). The social responsibility of business is to increase its profits (pp. 173-178). springer berlin heidelberg.
Klein, S. (1998). Don Quixote and the problem of idealism and realism in business ethics. Business Ethics Quarterly, 43-63.
Weicker, T. (1932). Idealism in Business. Religious Education, 27(3), 214-216.
Comment:
Both the idealist and the realist have logical point of view, and I agree with it. The social responsibility is a matter of obligation that one has to accept within themselves based on their values. From a neutral platform perspective, I believe that any organization whose business gain income or merely achieve a break-even profit should take into account that the earnings that they gained also come from the consumers who are part of the society where their business operates. Those individuals who patronize their products and services are the same people, who live around the vicinity and proximity of their offices and buildings, thereby, it is logical that these businesses return the favor to the people who spend their money to make their business profitable by protecting them as well.
After reading “Do Corporations a Have a Responsibility to Society Beyond Maximizing Profit” I agree with Peter E. Drucker. In my opinion building a strong social responsibility is the way to success and profitability of the enterprise. As Peter Drucker (as cited in Barnes & Smith, 2014) mentioned, “The public responsibility of management must underlie all its behavior. Basically it furnishes the ethics of management.” As an example I would like to bring up one of the most famous enterprises of our time – Google. Google, being a giant in many fields of technology, helps to make the world people live in better using all its resources. Dr. Larry Brilliant, the former Head of the Philanthropic Arm in Google once said, “ It is very hard to find another company that starts out on a conscious path to do good and not do evil” (as cited in Delaney, 2006). Google has a lot of social projects in the fields of education & computer science, the environment, development and human studies. One of the main issues Google provides funding for is the lack of clean water in the world. About one third of hand pumps in remote countries are not working. About 11% of people in the world experience a scarcity of clean water. Google has provided $5 million as a Global Impact Award to Charity: Water, non-profit organization. That money is being used to install remote sensors, in isolated places, that keep track of the water supply in that area. Furthermore, Google is helping to beat human trafficking. Google has granted Polaris $3 million dollars for the purpose of creating a new worldwide affiliation that exchanges data and best practices between different human traffic organizations to lower the growing number of victims. All of those actions help people all over the world in a number of different countries to improve their lives. Google is positioning itself as a goodwill organization and builds positive brand awareness by investing money in those lifesaving projects. According to Michael King (as cited in May, Steven K., Cheney, George, and Roper, Juliet, 2007), “the aggregate performance of “sustainable: companies is better than their peers”
We can think of that as karma - “Whatever you do will eventually come back to you”.
References:
May, Steven K., Cheney, George, and Roper, Juliet. (2007). Debate over corporate social responsibility. Cary, NC, USA: Oxford University Press
Delaney, K. (2006, Feb 22). Google names head of philanthropy; physician Larry Brilliant, a former tech executive, will lead google.org arm. Wall Street Journal Retrieved from https://ezproxy.callutheran.edu/login?url=http://search.proquest.com/docview/398929538?accountid=9839
Barnes. K & Smith. G (2014) Taking Sides : Clashing Views in Management. Oxford:McGraw-Hill
Comment:
I admire how Google, as one of the most profitable company in the work, take extra steps to return a favor to the people who utilize their services 24/7. It only goes to show that the foundation of this corporation is not merely about the money, but it shows the world it also takes responsibility of serving not only their employees but also the entire nation with the innovations and technological power that they gain. I support the idea that Google has been a good role model for every company who literally applies the adage that says “Great minds come with great responsibility.”
