Ethical Dilemmas in the Business World

Social responsibility is the belief that firms should voluntarily contribute to society and the less fortunate. There are many different ways companies can make their voluntary contributions. Examples include donating percentages of profits to charities, causes, local communities or society in general. Firms can also make contributions to improving the quality of life for employees and their families through benefit packages such as profit sharing and 401K accounts. Examples of some companies who practice social responsibility are Ben and Jerry’s, UPS, Starbucks, Walt Disney, Apple, Johnson & Johnson, and McDonald’s. Larger firms and corporations seem to make the largest social contributions. Many people would argue that this is because they have the largest net profits to work with.

Although social responsibility undoubtedly benefits society, it has become a hot topic because of different concerns that circulate the issue. There are those who argue for social responsibility; since society benefits from the firm, they should give back to society. Others believe the only social responsibility of a firm should be to make a profit.

Corporate social responsibility has many supporters. Firms support social responsibility because it can benefit them in many ways. Many firms have realized that social responsibility is a great recruiting tool when looking for new employees. People are attracted to a company that does good things for society. Also, socially responsible firms have a higher retention rate than those that are not. People enjoy being a part of an organization that is bettering society. Employees of socially responsible firms may be happier in the place of work because they feel like they are a part of something larger than themselves. Furthermore, in a competitive marketplace how a customer views your company is crucial. Companies that are socially responsible build a positive reputation for themselves. In return, more customers may buy their product, or purchase their services.

Social responsibility is also supported because of the way it benefits society in general. Many believe that if enough firms practice social responsibility, in the long run a healthier economy will be molded. A stronger marketplace will be a result of this. People believe that since firms benefit from society that they should in return plow back in some of their profits.

On the contrary, there are many who criticize social responsibility. Refuters of social responsibility argue that this practice can actually harm the balance of a business. Profit given away may disposition a company because these means could have been invested into growth, and improvement of the firm. When portions of profit are being given to charities as opposed to reinvestment for internal growth these socially responsible firms are being put at a disadvantage to those firms that are not.

In addition to this, challengers also argue that it is unethical for corporations to deprive or short challenge stockholders’ dividend payments because of social responsibility investment. Since they are the ones investing in the success of the company in the first place, they are the ones that should be benefiting from profits. Many argue another place these funds should be allocated is to the employees themselves. If they are the ones that are driving the business’s high profits, they should be benefiting from their labor. Instead of investing these additional funds into society they should be reinvesting it into their employees in the form of bonuses. In my opinion, corporate responsibility should be the responsibility of only those who desire to make a difference. Responsibility should not be pushed onto anyone and everyone as a requirement. Only those who will take the time to assure the money they donate will go to a good cause should practice this behavior. Otherwise it is a waste of money that could be spent elsewhere. If the financial situations of the people who work at the company or the stockholders are at stake then I would view social responsibility as irresponsible. I also believe that if social responsibility denies the firm of a reasonable profit margin than this as well is wrong, and a bad business decision. I believe that social responsibility should be a choice, and a luxury, to those firms who can afford to use this tool to their advantage.

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Tags: corporate, ethics, responsibility, business, governance