CORPORATE SOCIAL RESPONSIBILITY
Globalisation of the world economy is underway, and various groups, including national governments, multinational corporations and international organisations such as the World Trade Organisation, are promoting this. However, globalisation should not be detrimental to the welfare of society.
As we have moved into the global market, there is an abundant supply of labour. Capital and free trade have expanded the possibilities. Some industries e.g. textiles, have moved from country to country seeking the lowest labour costs and highest profits. Firms operating in developing countries are often criticised for failing to be socially responsible in their operations (e.g. Nike & Gap were exposed as operating factories with sweatshop conditions) and this has lead to the development of Corporate Social Responsibility.
According to Certo (2002) "Corporate Social Responsibility (CSR) is the managerial obligation to take action that protects and improves both the welfare of society as a whole and the interests of the organisation".
The most publicised areas in which businesses can act to protect and improve the welfare of society are: urban affairs, consumer affairs, environmental affairs and employment practice affairs. Companies are beginning to recognise that improving their impacts and addressing wider social and environmental problems will be crucial in securing their long-term success.
There are various arguments associated with businesses role in society, some of which are as follows:
The Role of Business in Society
1.Carr (1996): Pure profit making view- Economic CSR. Business has a lower ethical standards than society. Their only social responsibility is to obey the law.
2.Friedman (1962): Constrained profit making view- Business should maximise shareholder wealth, obey the law and be ethical
3.Freeman (2001): Socially aware view- Ethical CSR. Firm should be sensitive to potential harms of its actions on various stakeholder groups
4. Carroll (2001): Community...