Business Ethics
Introduction
The article by Friedman confirms that in a perfect free market, no person or corporate is coerced to engage in social responsibility (Freidman 6). Friedman asserts that social responsibility is voluntary but must conform to societal norms and values. The major principle underlying mechanism of politics is conformity. Actions by individual or organizations relating to social responsibility must be for common social interest purpose. On the other hand, there are some organizations that require their stakeholders to contribute to a common social purpose whether they like or not (Friedman 6). This does not follow the set values that come with social responsibility, but rather it is ethical to be socially responsible to the society. The unanimity of socially responsible behaviors is not often practical thereby making some conformity seem inevitable. On the contrary, the social responsibility goes beyond political mechanism’s scope. It is similar to the collectivists’ doctrine, but it demonstrates how collectivists’ ends are achievable in absence of collectivists’ means. Social responsibility is a subversive doctrine practiced in a free society. From a personal perspective, social responsibility of a company is not only channeled to benefit the society, but predominately entails use of resources and actions to increase profitability (Friedman 6). Corporate social responsibility helps companies in obtaining a competitive edge. It also allows companies to engage in free and open competition without fraud and deception.
Business Ethics and Social Responsibility
Social responsibility entails conformation to moral standards and ethics. Ethics refers to a set of values that sets up the grounds of universally tolerable behavior (Sharma 136). The values are put across in statement with reference to how persons should conduct themselves. In this view, ethics refers to a set of attitudes that concerns wrong or right behavior in the society. It engrosses opinion as regards the injustice and aptness of human conduct. Ethical actions conform to universally conventional norms. Similarly, business ethics refers to the study of moral right and moral wrong that highlight moral principles applicable in business organizations and behaviors. Business ethics determines how moral principles apply to the systems of society and the business organizations. Businesses cannot survive in absence of ethics, and ethics is dependable with profit-seeking and moral actions (Sharma 136).
Apparently, every organization in the contemporary world strives to sustain a lead in area of its business. Business organizations employ scores of strategies directed into enhancing their performance. Feasible strategies are employed to guarantee a significant position in the world of business. Most organizations want to attract and retain experienced employees, please their stakeholders, and more importantly lure a great number of customers. Moreover, the most demanding activities in many organizations include maintenance of effectiveness, growth and profitability (Sharma 136). To ensure business efficiency and effectiveness, organizations must extend beyond their limits, and seek recognition from the society and stakeholders. For instance, social responsibility towards employees inspires motivation which consequently increases their level of performance, hence increased growth. On the other hand, social responsibility towards the community increases the society’s confidence in the organization, an aspect that creates a positive image of the organization. Therefore, most businesses employ social responsibility to the public, human resources and to the surrounding environment (Sleeer 100). Organizations whose business actions offer no benefit to the society, employees and stakeholders do not achieve growth and profitability.
Companies embracing social responsibility do so because it is morally right to be socially responsible, and they embrace it as a sign of ethics of care (Sharma 136). Ethics of care emphasizes on caring for wellbeing of the employees, the society and the surrounding environment. Ethics of care does not necessarily lead to any monetary benefit. In this regard, social responsibility is an ethical act that functions to promote the general society. It forms benefits for the society besides the organization. Businesses that are socially responsible focus on doing the best as an organization and give back to the society (Sleeer 100). For example, there are companies that adapt money raising projects for research on sicknesses, helping the needy. Others provide volunteers to work in communities and provide free services. Such organizations do not do so for profits gains, but because it is ethically right to be socially responsible.
It is probable that organizations that practices ethical leadership and take part in fulfilling the interests of their employees and the society, attain a competitive edge and increase their level of profitability and growth. Corporate strategy helps in sustaining social responsibility to organizations’ stakeholders (Sleeer 100). Corporate strategy involves workers, leaders, shareholders, clients, society and the natural environment. This strategy facilitates augmentation of sales volume besides enhancement of the organization’s image. More significantly, corporate strategy and social responsibility functions as tools that promote public awareness. This aspect creates an unbeatable podium on organizations products and services. In addition, social responsibility to the society and environment leads to expansion of an organization market share. Apparently, people regard the natural environment as the leading business policy that facilitates and fosters profitability and organizational growth. Corporate social responsibility towards employees augments their output level. Freidman asserts that in a private-property or a free-enterprise system, a corporate leader is a worker of the business owner (Freidman 3). The leader holds direct responsibility to his employer in the sense that he must conduct his roles with respect to the desires of the employer (Freidman 3). However, the executive must conform to the basic societal laws, both legal and ethical rules. While some employers may hold different objectives for their business, social responsibility helps them create a positive image of their organizations besides winning a considerable client base.
However, there are organizations that are non-profit making but still employ corporate social responsibility. Social responsibility entails all obligations that a business holds towards the society which include economic, legal, ethical and discretionary categories of the performance of a business (Sleeer 100). Economic responsibility is social insofar as the society demands that firms produce services and goods efficiently and profitability. Legal responsibility is social insofar as society as the society expects companies to stick to the laws. Ethical responsibility is social because the society expects companies to conform to certain values that are demanded, but socially acknowledged. Companies behave socially responsible because the society requires them to behave morally (Sleeer 100). Companies engage in activities that benefit the society, although their social responsibility acts are neither legally nor economically required. There are moral virtues that govern the activities of a given company. For instance, it is ethical for oil companies to engage in environmental clean up and protest oil spillage during oil drilling procedures. Such companies do not benefit profitably from such actions, but it is ethically right to protect the natural environment from pollution
Social responsibility supports healthy competition. In his capacity as a business person, a corporate executive holds a social responsibility to the employer. He must act in a manner that is beneficial to the employees and the society. For instance, when a corporate lead uses the organization’s money for a social course and imposes the burden on the stakeholders, employees and customers, his actions are politically questionable (Friedman 4). This discrepancy highlights the difference between a civil servant and socially responsible executive. The consequences of a socially responsible behavior that perhaps include the use of stakeholders or employees money in socially responsible actions are for the benefit of the organization. When a company reduces prices of its products, it is does not do so to prevent inflation but rather to lure more customers into buying the company’s products. If a corporate leader spends stakeholders or employees money for social objective course that will lead to profits increase, then the stakeholders and employees do not desert such a leader (Freidman 5). This is because their money is put into profit generating activities that benefits the entire company. According to Freidman, in a perfect market, no one is forced to practice social responsibility. Parties engage in social responsibility because of the benefits they get from such actions (Sleeer 100). Otherwise if there are no benefits, then companies would not participate in socially responsible actions. If there are no values, then there are no social responsible actions. As a result, companies engage in social responsibility through utilization of their resources and activities for purpose of increasing their profits besides wining a competitive edge.
Conclusion
Social responsibility entails a firm’s hard work to lure a more taxing customer base and stockholders. Social responsibility has lead to establishment of key business terms among them ethical trade, and it has wrapped up scores of superior concepts which include, transparency, accountability, principle and consequences. Socially responsible behaviors facilitate presentation, implementation and monitoring of business actions and behaviors (Lange &Washburn 301). Social responsibility is a crucial element in modern businesses and it is used as a strategy that facilities growth and profitability in an organization. It is evident that organizations use its resources and engage its actions to create a positive public image, attract customers and market profits through winning an extensive market. Business ethics supports relations of non-economic concerns and means of maximizing profits. As a result, ethical businesses demonstrate a degree of conscientiousness to employees, the society and environment to remain in business and achieve growth and profitability.
Work Cited
Friedman, Milton. The Social Responsibility of Business is to Increase its Profits,” The New York Times Magazine”, September 13, 1970.
Lange D, Washburn, N. Understanding attributions of corporate social responsibility, “Academy of Management Review”, 37.2 (2012): 300-326.
Sharma, Sanjay. Stakeholder, the environment and society. London: Edward Elgar publishing, 2004.
Sleeer, Juergen. Business ethics and stakeholder management: Developing a structured approach for small business owner-managers. New York: GRIN Verlag, 2012.
