The Corporate Social Responsibility and the Key Requirements for Modern Organizations - Essay Example

?Introduction Corporate Social Responsibility is considered as one of the most important strategic moves by the organizations to support the environment within which they operate. It is considered as a form of self-regulation which is actually integrated into a business model to allow business organizations to regulate themselves accordingly. The goal is not only to leave a positive impact on the environment within which an organization is operating but to also take responsibility for the overall actions of the organization. This therefore often results into greater socio-economic consequences for the society because organizations are considered as the artificial citizens of the society. According to Simon, Powers & Gunneman, the overall purpose of a firm is always based upon the notion of maximizing profits while at the same time minimizing the social injury. This therefore necessitates that in pursuit of the profit maximizations, firms should not go to a level where the overall social harm is greater than the profits earned by the firms. It is argued that the people and from that perspective organizations have the ethical responsibility for not harming others. Simon, Powers & Gunneman therefore developed what is called Kew Garden Principles to outline whether we need to solve a problem or not regardless of the fact that whether the problem pertains to us and can be solved or not. This paper will first review the Kew Garden Principles as outlined by Simon, Powers & Gunneman besides discussing two recently published articles on whether the firms have been able to fulfill their obligations or not. Kew Garden Principles Before discussing the principles and corporate social responsibility issues, it is important to give a background to this whole debate with historical facts. Kew Gardens is an area in New York where a woman named Kitty Genovese was killed in front of her own home. What is important however, to note that the none of the neighbors despite having the full information of what is happening to her called the police or other law enforcement agencies to help her avoid being murdered. What is critical however, to note that it was largely argued that the behavior or response of the people who witnessed this whole episode was not considered as irresponsible. Most believed that the neighbors just stood by and watched the murder taking place without actually taking effort to prevent it. This simple historical fact therefore outlines the ethical responsibilities of not only the individuals but the corporations too. According to Simon, Powers & Gunneman, the overall purpose of the firm though is based upon the maximization of the profits and value for the shareholders however, it must be supported by the notion of inflicting minimum social injury. As such it becomes the ethical responsibility of the individuals as well as the organizations not to harm others besides ensuring that harmful acts of others are also critically scrutinized to ensure that they don’t hamper with the rights and obligations of others. This philosophical position is therefore based upon the deontological principles. (Krausz, & Pava, 1997.) Negative Injunction and Affirmative Duty While rationalizing the key philosophical debate behind this, authors argued that there is a clear and distinct difference between the negative injunction and affirmative duty of a firm. Negative injunctions outline that the firms should not engage themselves into the activities which can create social injury. The affirmative duty however, outlines that firms also need to actively pursue the good things. The above principles therefore suggest that the corporate social responsibility of the firms is two-pronged strategy wherein firms not only avoid to engage themselves into behaviors and actions which can create deliberate social injury for the society but on the other hand should also engage themselves into actions which can actually create some good for the society as a whole. Accordingly, the negative injunction as well as affirmative duty is considered as the moral minimum for the organizations as well as individuals. Authors also argue that both these principles are backed by the moral as well as the legal traditions. (Mallin, 2007) It is argued that in a society where organizations and individuals way go ahead to avoid social injury to others can actually become a better and more tolerant society. Within this perspective, the role of the organization therefore is not just limited to the pursuit of the profit but to ensure that the society is not inflicted negatively by its action. The responsibilities of the organization therefore are relatively different and larger within this context and require active participation from the firms. Four Principles There are four basic principles outlined in the Kew Garden philosophy as outlined by the authors. (Smith, 1990) These four principles are: Need This principle outlines that increased needs also increases the responsibility for the individuals as well as the organization. Accordingly, organizations which are expanding into international level specially seem to have the greater responsibility for ensuring that their actions do not result into social injury. It also outlines that where the overall social injury due to the actions of the organizations are relatively higher and require a need to focus more, the overall responsibility will also increase too. Proximity Proximity means that if organizations or individuals knew or going to know what is to happen, they must act responsively. This also means that the organizations must evaluate their actions and their consequences upon the environment and other stakeholders. Capability It is argued that if an individual or an organization does not have the capability both the need and proximity may therefore not work and the organization may not be held responsible for the actions of others which can potential harm and damage the environment. Last Resort This principle outlines that the individual or the organization is also the last resort to take care of the problems. As such shifting responsibility or blaming others for the problems may not vanish and organizations may consciously cooperate or corroborate in the damage done. It is critical therefore that the organizations, based on moral minimum must take action to reduce the negative impacts of such actions. Articles Review The first article under review published on 18th October 2011 in Daily Guardian of UK1 on the recycling of the takeaway coffee cups of the coffee chains working in UK. It has bee suggested that it is relatively difficult to dump these cups due to the use of mix materials thus making higher landfills a real social cost for the society. (Smithers, 2011 ) It has been discussed that the disposable cups in which coffee is served also contain Polyethylene as a soft coating around the cups. Though this is considered essential in order to keep the coffee warm and not making the cups soggy but it also makes it difficult for the paper mills to properly process such type of material with relative ease. Article discusses many firms which directly or indirectly are contributing towards this practice by suggesting that properly dumping the disposable cups is the responsibility of the customers. As such these firms are pursuing the strategy of deliberately allowing the consumers to damage the environment besides creating costs for the society to properly dump them. According to the article more than 2 billions cups are annually used by the consumers while drinking coffee. Such huge number of cups and the use of mixed material on these cups therefore is inflicting social injury while at the same time ignoring their responsibility to produce an environment which is clean and pollution free. Except probably Starbucks, all other firms discussed in the article seem to violate both. This article has also been published in the daily Guardian and has been written by Dan Milmo regarding the practices of the large energy companies to locate their subsidiaries in secrecy jurisdictions where there are no legal restrictions for not publishing the financial accounts of the companies. 2Article discusses that the firms like Shell, BP has been able to open subsidiaries to take advantage of the places where the information about the ownership structure as well as accounts are not legally required to be reported. (Milmo, 2011) What is also important to note that the places like Delaware, Netherlands, Belgium as well as Ireland serve as the secrecy locations besides other resource rich but poor countries? According to this report, it has been argued that the organizations deliberately chose the locations to base themselves not to allow the people to get true picture about their assets and investments. This article is important in the sense that it offers a glimpse into the business practices of the firms which deliberately chose to take actions to mislead other stakeholders. This may therefore be considered as the negative injunction besides ignoring the affirmative duty to restrain themselves from such practices. It is critical to understand that these firms are actively pursuing the policies which are meant to hide the correct information. Access to the correct and timely information is considered as one of the key criteria for investment and as such the shareholders as well as potential investors may not be able to get correct information. Conclusion Earlier thoughts on the corporate social responsibility suggest that the organizations have been treated distinctively from the society as well as the individuals. It has been argued that the organizations do not have to fulfill any social obligations because their only motive should be to maximize the profits. However, it has also been argued that the pursuit of profit maximization should not be the only criteria for the firms as this pursuit may also result into the social injury. Corporate social responsibility is therefore considered as one of the key requirements for the modern organizations. (Prasad, 2006) The rapid pace at which the development took place has also resulted into the deterioration of the world’s resources. Over the period of time, the exploitation of natural resources has continuously contributed towards their decline. The need to conserve the natural resources and use them in their most optimal manner therefore is one of the key issues which firms must have to look after as their corporate social responsibility. (Mallin, 2006) Another important element is the reporting of true, fair and complete information which can provide enough information to all of the stakeholders to decide rationally. The large corporate scandals as well as the recent financial crisis has resulted into the strong skepticism about the ability and will of the international firms to provide true and complete information. It is therefore important that the firms must allow all the stakeholders to have an unrestricted access to the public information. References 1. Milmo, D. 2011. Big energy and mining groups 'hide accounts using secrecy jurisdictions'. [ONLINE] Available at: http://www.guardian.co.uk/business/2011/sep/19/secrecy-jurisdictions-energy-mining-accounts. [Accessed 30 October 11] 2. Krausz, J & Pava, M 1997. Criteria for Evaluating the Legitimacy of Corporate Social Responsibility. JOURNAL OF BUSINESS ETHICS, 16(3), 337-347,. 3. Mallin, C A, 2006. International corporate governance:a case study approach. 1st ed. New York: Edward Elgar Publishing 4.  Mallin, C A., 2007. Corporate governance. 1st ed. New York: Oxford University Press. 5. Smith, N Craig 1990. Morality and the market:consumer pressure for corporate accountability. 1st ed. New York: Taylor & Francis 6. Prasad, 2006. Corporate Governance. 1st ed. London: PHI Learning Pvt. 7. Smithers. R 2011. Coffee chains urged to improve takeaway cup recycling. [ONLINE] Available at:http://www.guardian.co.uk/environment/2011/oct/18/coffee-cup-takeaway-recycling. [Accessed 29 October 11]. Read More