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Business Ethics- Coperate Responsibility
My A-level notes on Coperate Responsibility in Business Ethics OCR exam board
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Corporate responsibilityThe belief that an organisation has ethical
responsibilities both in its own conduct and to
the wider community. The moral requirement
applies corporately and not just to individuals
Eg. Alton Towers giving away free tickets to those who
live in the local community to combat noise pollution.
COMMUNITY
Eg. Lush acts socially responsible towards the
environment by reducing plastic. ENVIRONMENT
Milton Friedman
Businesses have no other responsibility but to
increase profits (capitalism) and he made the point
that it was actually unethical to do anything else:
taking money away from making profits to fund
corporate social responsibility projects was the
equivalent of stealing money from shareholders.
Friedman would always prioritise the share holders.
This convinced politicians, such as Ronald Reagan
and Margret Thatcher that if businesses were ‘set free’
to pursue profit, the benefits of their growth would
‘trickle down’ to everyone else in the country.
o Eventually, this wealth would be trickled down to
all of society and implying that if you leave
businesses to be successful, then employment
would go up and therefore people would spend
more which would also be good for businesses.
, o It’s a knock on effect essentially.
o Government regulation was reduced. This
happened in a context of increasing social
problems due to rising inequality and increasing
awareness of environmental issues. Instead of
notions of cooperate social responsibility
decreasing, more and more businesses accepted
responsibilities towards the community and the
environment.
Why do business take on corporate
responsibility?
o Improve image with customers or with a certain
type of investor or employee; there are many
investors who only want to put their money
into ethical businesses (good association)
o If they don’t, they’ll be viewed badly by
customers
o Businesses improve facilities for employees or offer
discounts for employees because they’re worried
that if they don’t, employees will work for the
competition
o Without adopting self-regulation, businesses will
face far more restrictive regulation on their
activities from the government
o Want to provide people with ethical products/
services
(These are all driven by wanting the business to
keep going)
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