Extremely high-detailed and comprehensive A* business ethics notes including not only the content/arguments but also a whole range of relevant scholars, responses and pros and cons of the different arguments. Tonnes of relevant examples for CSR, whistleblowing, globalisation, does good ethics lead ...
Corporate social responsibility, and is it just ethical window dressing?
Corporate social responsibility is the idea that companies have a duty to protect and care
for all of their stakeholders. These include shareholders, employees, customers, suppliers
and then on a bigger scale: the rest of society and the environment.
The situational and collectivist nature of Utilitarianism leads to inconsistencies regarding
CSR.
- What Nike are doing is morally wrong under the theory because they are exploiting
workers (through harassment, violent intimidation, low pay, poor conditions and
long hours) to be able to produce products as cheaply as possible. However, because
they still charge premium prices for these products then they are also exploiting the
consumers. This is wrong because they are valuing profit and the happiness of their
stakeholders over the happiness of their other shareholders. The pain and suffering
of thousands of workers and the exploitation of millions of customers outweigh the
happiness of a few owners.
- However, what Primark are doing is morally acceptable. They also exploit their
workers in sweatshops, but this then allows Primark to sell their products incredibly
cheaply. Cheap products make consumers happy and as there are far more
consumers and shareholders than workers in these factories, exploitation creates
the most happiness.
The Kantian approach to CSR is more absolute.
- Both Nike and Primark are bad because exploiting workers, or any shareholders, is
always morally wrong. Kantian ethics is based around the idea of duty: doing the
right thing for the right reasons irrespective of outcomes, and the duty of companies
is their CSR - to treat all stakeholders with dignity and respect, regardless of the
effect on profit. Kant’s second formulation states that people should be treated as
“an end in themselves” not a “means to an end.” Actions that looks to use others for
some gain is immoral, so the exploitation of workers is immoral. As well as the
responsibility to treat all stakeholders with dignity and respect, Kantian ethics
believes that CSR includes:
- Keeping promises. This is a categorical imperative, so businesses are duty bound to
honour their contracts and commitments.
- Telling the truth. Lying is not a categorical imperative but telling the truth is a duty.
Companies should be honest about their products in advertising neither
exaggerating the benefits or underplaying the dangers/negative effects.
Lots of people consider paying tax to be part of the CSR and a moral obligation to society.
However, many companies have created inventive ways of avoiding paying tax. In 2010 for
example Amazon made a UK turnover of £3.3 billion but paid no UK corporation tax. This
is wrong in Utilitarianism as it increases how much everyone else has to pay and decreases
the amount of money the government has to spend on beneficial projects. It is also wrong in
Kantian ethics as it does not pass the Universalization of Maxims formulation.
, Corporate social responsibility is nothing more than ‘hypocritical window-dressing’ and an
attempt to make more profit:
1. Free-market economist Milton Friedman believes that “The social responsibility of
business is to increase its profits.” A company’s only responsibility is to its shareholders and
any additional ethical responsibilities distract from its core purpose of making money. He
believes that an executive spending company money on social causes is like stealing from
the shareholders and that “the stockholders or the customers or the employees could
separately spend their own money on the particular action if they wished to do so.” For this
reason Friedman hopes that corporate social responsibility is just ‘window dressing’ to
increase profits or else it is just a negative practice, harming the company.
Focusing purely on profit - the profit motive - like Friedman suggests, can lead to events
such as the Baby Milk Scandal. Companies such as Nestle got Third World mothers hooked
on their baby formula by convincing them that the products were needed (through
pamphlets and “sales girls in nurses uniforms” and by giving mothers a month of free
samples. Once the month had ended, the mothers could no longer naturally produce milk
because their breasts had dried. They were forced to buy baby formula which they could not
afford. UNICEF estimated that aggressive marketing of baby formula still causes the death of
an estimated 1.5 million babies every year.
2. Utilitarianism is a teleological theory therefore it does not care whether corporate social
responsibility is window dressing or not as long as the outcomes are good. If stakeholders
happen to benefit from CSR then it is a win-win.
3. It is purely used as a public-relations tool and an opportunity for a company to gain
positive media attention. Anita Roddick, founder of the Bodyshop, said “Being good is good
for business.” Companies such as Apple focus much of their advertising and publicity efforts
on how they are fulfilling their CSR as by developing a positive ethical image they are likely
to attract more customers, similar to Kant’s calculating shopkeeper.
Corporate social responsibility is not just ‘hypocritical window-dressing’ and an attempt to
make more profit:
4. In Kantian ethics, motivation is highly important. If your intention is to receive good
publicity then CSR is just ‘window dressing’. If you fulfil your duty and do the right things for
the right reasons, then fulfilling your CSR is moral and genuine. Duty is known to lose
businesses profit so it cannot be hypocritical. Tim Cook, the CEO of apple, once said in an
outburst "When we work on making our devices accessible by the blind, I don't consider the
bloody ROI." This suggests that Apple’s work on accessibility and protecting the
environment have genuine intentions.
It is impossible to know intentions or motivation so we cannot know for certain if CSR is or is
not hypocritical.
5. Corporate social responsibility may be the result of religion e.g Christians believe that
they have a duty to be stewards and look after animals and the planet as stated in Genesis,
as well as Hindus who are mostly vegetarian.
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