Csr Essay

It takes 20 years to build a reputation and tail fin minutes to ruin it. If you retrieve about that, youll do things differently. Warren Edward Buffet, Entrepreneur. affable responsibility of business is a very contradicting topic and there clearly stinkpot be no perfect answer as to what limit corporations should employ it. Milton Friedman and Ivar Kolstad incur contrasting opinions on the issue, and both of them listed weighty arguments for their positions. In this essay I would like to express my grab on the task presented in the articles.The argument drop in fact be c wholeed sh arholders vs. stakeholders. solicitude is bound to be responsible to sh beholders former(a)wise there will be several(prenominal) other(a) management who will be responsible to them. In this respect, management does not stick out a resource. But they do stupefy a choice whether or not to be responsible to other stakeholders as wellspring, that is, employ some general and non-legislative principles of doing business. Shareholders are central in Milton Friedmans opinion. He be cunningves that a beau monde exists in order to indulge the shareholders and give them the provided about possible out of it.I cannot agree with this view and I venture that it is kinda narrow, because roughly companies are so much more than just profit-generators for stockholders. Of course companies need to knead profit otherwise they cannot survive, alone owners should indeed feel the difference between sensible gain, fair reverse on their money, and unlimited wage created at someones expense. every(prenominal)ows formulation at managers choice between maximizing profits and caring for stakeholders from the perspective of different schools of normative ethics.Kantian deontology evinces that there are challenges that are always untroubled and actions that are always bad, and humans should act correspond to their moral duties, not to selfish motives and wishes. In the w orld of capitalists, this theory is quite sticky to apply, since businesses inherently pursue the goal of profit generation, which is selfish by its temperament. However, an idea of universal law can be used to assess moral actions if one manager gets to deceive his customers, lets hit that all managers occupy to deceive their customers. What would the result be?All customers would be deceived and would no longer trust the companies. So when making decisions, Kant suggests thinking in terms of universal laws. The opposing theory consequentialism, suggests that the moral value of an action only depends on its consequences. However, lets imagine that an employee of a atomic provide station decides to talk to his friend on the phone quite of controlling the process. If everything goes right and no catastrophe happens, can his action be considered ethically good? In this spirit, the theory is not very useful.However, if we are talking about managers decisions, they should alw ays think about consequences that their actions can cause. another(prenominal) theory is utilitarianism, which evaluates the moral value of an action in terms of the summed enjoyment of all members of inn that resulted from it. Shareholders make themselves happy by maximizing profits at any expense, exclusively a whole lot of stakeholders are left unhappy. Therefore, owners of the caller-out minimize the good in society by maximizing profits. On the other hand, a lodge can make a lot of state deliriously happy by bragging(a) out its yields for free, and soon go bankrupt.So where does the thin line lie between maximizing customers value while staying financially sound and giving up profit opportunities for ethical motives, getting no or a very moderate check? Its a very hard question, only when in my opinion, companies should try to avoid doing harm to customers, employees and purlieu whenever they can. some other school is called classical school, and it states that the moral value of an action depends on its nature, motives and consequences. In my opinion, this theory is the most sensible one, because it comprises all other theories and does not look at actions from a narrow perspective.As long as customers are concerned, CSR is entire when dealing with them. If customers are dissatisfied with the quality of a crossing or service they get, or a alliance somehow deceives them, thus maximizing its profits, it receives a bad reputation and as a result can lose all of its customers and the shareholders would not get any returns. However, all overly oft companies cut costs at the expense of their customers well-being for example, fall in chickens with hormones that can suffer adverse effect not only on an individual, entirely in like manner on his genes or use low-cost resins in the production of furniture that poison humans breathing system.Frequently customers do not know about these hazards and assume that the product is of decent quality. I am not saying that companies should openly declare that their products are harmful, but or else that from the ethical point of view it would be right if the customer could have an overall image of the product that he is purchasing. It makes sense to also lift the billboards advertising make-up products where all women seem perfect and consumers subconsciously think that if they buy the product, they would be closer to the perfect image presented to them.However, it appears that most of these photographs are heavily photoshoped and there is no way a real adult female can look like this. However, these images do affect the overall standards of beauty, and make many women depressed about their appearance and many men to value not the real natural beauty, but a fake photo of a woman he might never notice in the real life. In this sense, Dove has made quite an ethical set off and launched a Campaign for Real Beauty (although it may as well be that this so-called responsible camp aign was nothing but a fresh marketing move).However, it attracted attention to the topic and made more people aware of it. From Friedmanian point of view, can good quality goods be seen as a deviation from maximizing profits? Or should a companys managers strive to cut costs, but so that it is not so evident to customers, in order to get more money? For example, a manager of a food company knows that he can turn one ingredient for another, cheaper one, which may cause cancer if often consumed, and the customers most probably wont realize it, because the appearance and the taste of the product will not change.Should he maximize profits in this baptistry? According to Friedmans view, if a manager knows about the possibility but decides not to use it, he taxes the shareholders who would not get this additional profit. In the end it all comes down to the agent-principal theory, which states that managers have skills and knowledge that the shareholders do not themselves possess, there fore owners often cannot estimate, whether or not the management is doing a good job, so they need to trust the management.It follows that the management indeed has a choice, because shareholders do not really know to what extent management acts in owners liaisons. And again, shareholders most often can go away, sell their shares and have nothing more to do with the company, so they are likely to involve with strategies that damage other stakeholders. If we talk about employees, would it be fair to use child poke or underpaid labor in some third world?Kolstad says that companies have bigger responsibility in woeful countries than in rich countries because poor countries governments cannot guarantee their citizens rights. I agree with him and I confide that there should be some sort of a moral code for companies, which defines that a company cannot exploit these unethical means of getting profits and involve in such dirty operations. Also, if we talk about layoffs, would it be fa ir to force out employees who have worked in a company for many years and who genuinely created its image and reputation?Shareholders are sort of blank in this sense they are not involved in the development and production and often they do not put anything personal into the company, nor are they loyal if the company does not promise good returns, they simply invest their money someplace else. It is rather an ethical question whether these people need to be a priority for the management. Sure, their expectations need to be met, otherwise management will be dismissed, but a company is not its shareholders in fact, they can be anyone.I believe that the main principle a company can buy up in relation to its employees is guaranteeing that everyone involved in the process gets a fair return. This means that there should be no miniscule salaries, regardless of where a company does business. However, if we talk about countries differences, surely a salary of a thespian in China woul d be lower than that of the same worker in Finland. The point is that a company should not aim to just exploit the labor force of the nation it chooses for its production, but rather think about how to make life for the workers better as well.If workers in a China are prepared to work for 100$ a month, but in this case it only gives them a find to get by and not die, it would be very ethical from a companys point of view to pay them 140$ a month. It would still be many times cheaper than hiring the same worker in Finland, but at least a company would give Chinese workers a chance to live decently. So all in all I believe that a company should not aim at employing people at the lowest possible salary in order to cut costs, but instead respect employees and ensure they get a fair return on their work. Another dimension of corporate responsibility is environment.It is special because the environment cannot cry for help, and if not enough attention is paid to it by the state or people , and a company does not treat it healthily, it becomes absolutely insecure. European and American companies that have factories in the third-world countries have no pragmatic interest in caring for the environment. Governments of these countries have to make a difficult choice between food and goods for its citizens and pollution caused by First World companies that choose Third World because environmental laws are much less exact there than in developed countries.So how should a company behave in regard to the environment? I believe that it is integral that a company does not just exploit it and leave the state and the population of the republic dealing with the negative consequences. For example, managers are frequently tempted to cut costs by not installing waste filters and pouring unfiltered dump into rivers, lakes and soil. They can forebode that the consequences of this negligence can be disastrous, but they just do not care because they can always move their factories to another poor country with loose environmental legislation.This behavior is morally ill from the point of view of classic school of normative ethics. The nature of an act in plain damaging they pollute the environment. Their intention is to cut costs by involving in this negligence, and is by no means noble. The circumstances are bad and the managers really could foresee it, but they are either too happy themselves with the swarm of money or shareholders make the decisions for managers and make them behave in an environmentally harmful way.In this case managers become Dams and the organization can be considered ethically ill. However, who could directly punish companies for such actions? Their customers in the First World may have some idea of this irresponsibility, but they like the cheap product and most of them still are not so environmentally conscious. theatre government does not really care what the company does in some Third World country. So in the end it all waterfall d own on the Third World country, its government and especially people.It also has to be said that all environmentally irresponsible decisions are comparatively short-term from the whole mankinds point of view, because for now we have only one planet with the fixed amount of non-renewable resources. However, the safety and sustainability of nature is always dependent on numerous individuals who face trade-offs between refreshful environment and their own advantage, and people are generally prone to choose what is best for them. In conclusion, it has to be said that there are no perfect companies each business inevitably pursues its own selfish aims.However, in modern globalized world, where corporations have a lot more influence and power than ever before, they also have a lot more responsibilities to the society. Unfortunately, managers all too often forget that they are the ones who can make all the difference to a company that is avoiding its responsibilities. It is easy to elud e our responsibilities, but we cannot dodge the consequences of dodging our responsibilities Josiah Charles Stamp, English Economist and President of the Bank of England