Todd Sackmann 300128684

Business Ethics

In the modern era of business, the notion of social responsibility has become a hot topic as of late and is only gaining velocity as we progress into the future. Social responsibility in the business realm can be more specifically broken down into corporate responsibility, or corporate social responsibility. Two current views associated with corporate social responsibility are the narrow view: a profit maximizing initiative, or the broader view: which suggests that corporations possess additional moral obligations aside from profit maximizing including environmental considerations and a concern for the quality of life. Melvin Anshen and Keith Davis are two advocates of the broader view and provide compelling arguments as to why corporations in the modern world should subscribe to the broader view in contrast to the narrow view. To put in perspective some of the drawbacks the narrow view poses, one must consider the limitations of a sole profit seeking agenda. When corporations only concern themselves with profit being the bottom line, collateral costs are the price society pays. To elaborate, corporations that operate with maximizing profits being their only interest in mind, make decisions that have adverse effects on society as a whole. For example, take a production factory that has been strategically administered to operate in the most cost effective manner. That factory will produce its product as cheap as possible which often includes poor waste management tactics. The product has being designed to be manufactured with as little cost to the corporation as possible. So the negative effects of making that product has on society such as polluting the local river, or reducing the integrity of the ozone layer, are not factored into the corporations cost budget. These collateral damages to the environment that affect society as a whole, often referred as externalities, is the notion Keith Davis and Melven Ashen were getting at. They believed that corporations also served a higher purpose in addition to making a profit. That higher purpose was a duty to society that has being come to known as social responsibility. Davis points out that corporations should be held accountable for acting socially responsible because of the position of power a corporation exudes: One basic proposition is that social responsibility arises from social power. Modern business has immense social power in such areas as minority employment and environmental pollution. If a business has the power, then a just relationship demands that business also bear responsibility for its actions in these areas. (Shaw, 2008) Under this premise it would seem logical that a corporations cost agenda would also include factoring in the externality cost into the bottom line. So to reiterate, if a corporate factory produces products and the cost of production of those products are manufacturing costs, labour costs, and administrative costs, then advocates of the broader view would suggest that the corporations should include the expense society pays for the externalities caused by the production into their cost budget.

Todd Sackmann 300128684

Business Ethics

Another notion subscribers of the broader view advocate, in particular Mevlin Anshen, is idea of a social contract existing between business and society. This idea evolved from the relationship between business and society that existed in the nineteenth century. During that time the goals and motives of society was to create economic prosperity. As such society allowed corporations and businesses to operate in such a way that the incentive was to primarily grow profits. Anshen expands on this notion: "In the nineteenth century, societys prime interest was rapid economic growth, which was viewed as the source of all progress, and the engine of economic growth was identified as the drive for profits in an unfettered, competitive, private enterprise". (Shaw, 2008) That was their social contract. Todays modern social contract is changing due to societys transforming attitude towards business. Societys needs today some consider vastly different from, say, that of the nineteenth century. For instance, today in North America we have now accumulated what many would consider a wealthy economy in contrast to some less fortunate third world economies. The need to prosper from a profitability viewpoint is not as necessary as it is to now sustain our environment. Our over consumption of products from relishing in the narrow view perspective has subsequently resulted in adverse affects on the overall quality of life. Some of these side effects include detriments to the environment as previously mentioned, financial disparity, and less focus on family. These negative effects have started to changed societys attitude and perspective as to what now may be in the best interest of society as a whole, establishing a new social contract. In light of todays modern current affairs and the needs of society, I would completely agree with the broader views premise and doctrine that suggests corporations have a moral responsibility aside from making innumerable profits. If corporations continue to only interest themselves in operating to drive a higher profit, the cost society and the planet pays is too high. Corporations with their immense capacity of power, need to ensure that the comfortable standard of living they promote through their services, and products, can be enjoyed for generations to come, by being weary of the implications they have on the worlds resources and society. Corporations can achieve this moral standard by including socially responsible agendas into their corporate strategy and by taking actions to reduce or replenish their adverse affects towards the environment. References: Shaw, W. H. (2008). Business Ethics. Retrieved on March 12th, 2010 from Belmont, CA, USA: Thomson Wadsworth