The Business of Great Power and Great Responsibility

Corporate social responsibility (CSR) is the idea that businesses have a greater role in society than just making money - they are also responsible for the wellbeing of their stakeholders - (people who are affected by the success or failure of the business). This involves action that is socially, environmentally and economically moral. Some people, like Friedman, believe that the sole purpose of a business is to make a profit and that to do otherwise is unethical - the argument ultimately comes down to whether the business has a greater duty to its shareholders or stakeholders. The role of corporate social responsibility in business is not so much to hide greed, as much as it is to maintain a good relationship with all of its stakeholders - especially consumers, who are becoming increasingly aware of the ethical practices of businesses and are allowing this to influence their decision on where they spend their money.

A business’ key role is to make a profit. Friedman argues that this is the sole purpose of a business and to do otherwise is unethical due to the responsibilities of businesses to society. The world that we live in depends on the profit made by businesses. It allows them to: pay wages on time, pay taxes and dividends to shareholders, to whom they have the greatest duty. To Friedman, CSR is “hypocritical window-dressing” - a disingenuous front. This is not to say that successful whilst practicing in a way that is beneficial to society and the environment. Body Shop has a Fair Trade agreement with its suppliers and sustainably sources their raw materials, like shea butter - which would otherwise harm habitats and have repercussions on local communities - yet the corporation is thriving. It is a strong argument consider stakeholders outside of just the people directly affected by the profit made by the company, because of the broad and significant impact that any one business has on society as a whole. This is not to say that the argument isn’t flawed: it is greatly weakened by the counterargument that businesses don’t act ethically out of self-motivation, but as a marketing scheme, although this fails to take into account that good is being done regardless of how it comes about. Friedman’s entirely inferior view also fails to see this, as well as the benefit that comes from being ethical in an era where 77% of consumers say that they would be more likely to shop somewhere that has a background of ethical practice. CSR allows businesses to remain relevant amongst consumers - it’s role is no longer all about profit.

CSR also has a role in protecting basic human rights. Ford Pisto cars were being manufactured with a fault concerning gas tank relocation that proved to explode 8/11 cars upon testing. The company decided that the £80 million extra for recall was not worth the 180 lives that their decision would cost if they could just cover the law suits and be done with it. Act utilitarians might argue that the company was right to act in this way due to the money they would save that could then be invested into the company, benefitting employees and shareholders in the future (the fecundity of the pleasure) and the immediate gratification that the money could offer (the propinquity). In contrast, Kantian ethicists would be appalled at the use of people as a means to an end, which is a much stronger argument due to the subjectivity that the hedonic calculus serves due to the difficulty of quantifying qualitative data, like pleasure and pain, as well as the obvious violation of the basic value of human life that could be argued as ethical. CSR acts to protect people from businesses' unethical practices and save businesses from messy legal battles if they act ethically.

The role of CSR in a business depends on a number of factors. Julian Baggini says that the growth of CSR in the practices of corporations is largely in response to consumer concerns, but this only applies to the businesses whose practices customers are aware of. MacDonald's is a tremendously popular fast food chain, which means that it is always in the spotlight. It is likely that it is for this reason that the company has had to turn to ethically sourced goods, like free-range eggs and Rainforest Alliance coffee, for their products in order to keep controversy at bay. However, smaller companies in the same market, like Burger King, are much less careful with how they carry out their business, because they are not under the microscope as much, so their profits do not suffer if they act immorally. Based on this example, it could be argued that CSR is only beneficial to larger companies, and only applies to them. A major weakness in this view is the implication that smaller businesses do not face consequences for their unethical actions. There are significant business risks that come with ignoring CSR, including losing partnerships with other companies that don't want to be involved with firms that develop an unethical reputation. Equally, companies are more likely to run into legal troubles, like mass corruption or accounting fraud scandals, if they forego moral operations, which could potentially bankrupt growing businesses, costing people their jobs and depriving society of the service that they provide. Act utilitarianism, in this instance, recognises the overwhelming pleasure that comes with the responsible participation of businesses in society due to the extent of people that benefit from their operation (extent of the pleasure), the lack of lawsuits it will produce (purity) and the indefinite utility that its application will provide (duration). CSR benefits a company in a much greater respect than bringing in greater profits, regardless of the size of the business.

In conclusion, CSR is seen by many, like Friedman, as a marketing-scheme, which has the sole purpose of increasing profits under the guise of actively aiding society in moral issues, like the climate crisis and employee exploitation. However, this view is inferior to the recognition that CSR has a much greater role in the protection of businesses from lawsuits and preservation of human rights for workers and consumers, for which companies are rewarded by positive attention from customers and a noble reputation.