Hello Professor and classmates,
Happy Memorial Day! Hope you have enjoyed your day.
Profits and general welfare are not incompatible. They can be reconciled by using corporate social responsibility.
Corporate Social Responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. As per (Chen, 2020), Companies that practices corporate social responsibility are conscious of the kind of impact they are having on all aspects of society, including economic, social and environmental.
I believe that doing whats best for society means sacrificing profits. And usually large successful corporation that have grown their business to the point where they can give back to society adopt CSR programs. Corporate responsibility programs are also a great way to raise morale in the workplace.
An example of such company is Starbucks. They are committed to sustainability and community welfare. One of their milestones include reaching 99% of ethically sourced coffee, creating a global network of farmers, pioneering green building throughout its stores, contributing millions of hours of community service, and creating a groundbreaking college program for its partner/employees. (Chen, 2020).
Large companies claim that they are not in business just for the profit, that they also plan on serving some large social purpose. Companies have commitment towards society where they perform their business activities by paying for social cost like pollution.
If you believe CSR requires the sacrifice of some amount of profit, what amount is appropriate? Is that amount the same for all firms in all industries? How should the CEO decide?
I believe there should be sacrifice of some amount of profit. The amount appropriate I believe will depend on the size of the organization and also maybe years of existence. As per (Hill-Landolt), there is a long list of potential intangible benefits available to firms that act ethically. These includes, better commitment from employees and customers, ease of business improvements resulting from increased levels of trust between businesses and stakeholders, employees moral satisfaction and strong moral identity attracting higher quality recruits.
There is a believe that firms selling experience goods and experience and credence services are more likely to engage in CSR than those selling search goods. It comes down to firms being responsible as supposed to being profitable.
The most sustainable firms seem to have a strong set of core values and an entrenched clearly defined purpose beyond profit. They understand why they exist, which takes precedence over how they exist and drives what they sell to exist. They understand the importance of long-term thinking, which usually appears to be in conflict with profit motives
Bola
References:
Chen, James. (2020, Feb. 22). Corporate Social Responsibility (CSR). Retrieved from
https://www.investopedia.com/terms/c/corp-social-responsibility.asp (Links to an external site.)
Hill-Landolt, Julian. (2012, Oct. 29). Ethics and Profits. Retrieved from
https://www.sustainablebusinesstoolkit.com/ethics-and-profits/
(FOR THE REPLY AT LEAST ONE OF THE LINKS BELOW NEED TO BE USED)
http://business-ethics.com/2010/09/01/1714-the-case-against-the-case-against-csr/
ProQuestDocuments-2014-03-05 (6).pdf
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