Is Csr Profit Rather Than Ethics?

...

Schwartz and Carroll (2003) presented the three-domain approach of CSR, which includes economic, legal, and ethical domains. The economic domain motives the maximizing shareholder value or profit of the company, while the legal domain motives to obey the law (Carroll,1993). Despite from these two categories, the ethical domain motives to sustain legitimization, which concern about the organization’s social and ethical responsibility to the society. There are also other domains, such as legal economic, legal economic ethical, legal ethical and economic ethical. Carroll (1993) says the economic ethical domain is about the organizations offer both economic and ethical approaches to the charity, which is not about legal concerns but is ethical and economic simultaneously. Starbucks, an American global coffee company, is a well-known respected organization by its social responsibility actions. We already know that Starbucks is the economic profit company, on the other hand, it also concerns about the environmental responsibility. Since 1985, they been giving discounts to their customers if they bring their own tumblers. They have been practicing recycling and reducing waste method in order to save our environment from natural disaster. Moreover, they focused on offering ethically purchased and produced good quality products.

The organizations which do not apply economic and ethical approaches, not only they don’t really concern about maximization or minimization of profit but also they act unethically in their environment. This organization can determine as the corporation of failure CSR. The only domain implied here is the purely legal domain, which only consider about obeying the law. There are three categories in the legal domain, which are compliance, avoidance of civil litigation and anticipation of the law. The first category of the legal domain, compliance is again divided into three types, such as passive, restrictive, and opportunistic. The Volkswagen’s emissions scandal is one of the failure cases of CSR, which did not make the profit and not in an ethical way. But Volkswagen described its case as mistakes, which is a wrong statement. They equipped the defeat devices to 11 million diesel cars start from their 2009 model. Those cars emit up to 40 times the allowable levels of nitrogen oxide pollution, but they cheated on emission tests and ignored the environmental issues. This emission scandal affected their customers, the health, governments, and welfare of people in the society. In September 2015, their market value decreased up to 23 percent, as soon as they admitted the emission cheating case. Accordingly, Volkswagen faced the long term indemnities of the company, for example, negative effect on brand trust, the satisfaction of their customer, their reputation, and worker loyalty.

In conclusion, the CSR has been argued about the organizations and public interest, whether CSR is about corporate maximization of profit or the public welfare imperative to improve environmental society. The supporters of the shareholder theory say that CSR is mainly focused on the profit maximization of the company. On the other hand, stakeholder theory supporters argue that corporate profit is not an essential one, it is just a result of the organization’s action. According to their perspective, CSR is to meet the necessities of the stakeholders and the social interest also takes part in practicing the profit of the organization. Moreover, CSR also can have regarded as either both profit or ethics and neither profit nor ethics, where economic and ethical approaches do not imply. In my opinion, I believe that a business organization should worry about the idea of natural sustainability in the environment, for example, pollution control, and on affecting the life of individual and having positive outcomes in the communities without expecting anything in returns. This is completely the good human intention that tends just to bring some help and support to improve things in the environment that the company is part of. If a company develop good CSR ethically, that would sooner or later gain the great reputation of the company and even profits in the long run. Therefore, the organizations should primarily focus on the stakeholders’ interests, environmental issues by obeying the law in order to practice in an ethical way.

(1888 words)

References

Carroll, AB 1979, ‘A Three-dimensional conceptual model of corporate social performance’, Academy of Management Review 4, pp. 497-505.

Carroll, AB 1998, ‘The four faces of corporate citizenship’, Business and Society Review, v. 100, n. 1, pp. 1-7.

Carroll, AB 1999, ‘Corporate social responsibility: evolution of a definitional construct’, Business and Society 38, pp. 268-295.

Carroll, AB 1991, ‘The pyramid of Corporate Social Responsibility: toward the moral management of organizational stakeholders’, Business Horizons 34, pp. 39-48.

Corporate Social Responsibility: The Shape of a History 1945-2004. Rep. N.p.: Center for Ethical Business Cultures, 2005. Web.

Enrique Dans 2015, ‘Volkswagen and The Failure of Corporate Social Responsibility’, Forbes, blog post, 27 September,

http://www.forbes.com/sites/enriquedans/2015/09/27/volkswagen-and-the-failure-of-corporate-social-responsibility/#62ed558a6128>.

Freeman, ER 2008, ‘Managing for stakeholders’, in T Donaldson & P Werhane (eds), Ethical issues for Business, Pearson Prentice Hall, Upper Saddle River, pp. 39-53

Friedman, Milton 1970, ‘The Social Responsibility of Business Is to Increase Its Profits’, The New York Times,13 September 1970, pp. 32-33, 122-124.

Husted, B.W, Allen D.B., & Knock N. (2015), ‘Value creation through social strategy, Business & Society, Vol.54, No.2, pp. 147-186

IKEA. 2004b, ‘Social and Environmental Responsibility’, IKEA Services AB: Helsingborg, viewed 17 August 2016, http://www.IKEA.com/>

IKEA. 2004c. Social and Environmental Responsibility Report 2003. Inter IKEA Systems BV: Delft.

Karnani, A 2010, ‘The Case Against Corporate Social Responsibility’, Wall Street Journal Europe, 23 August 2010.

Schwartz, MS & Carroll, AB (2008) ‘Integrating and unifying competing and complementary frameworks; the search for a common core in the business and society filed’,

...