Contemporary Business Organizations and Corporate Social Responsibility
Question:
Discuss about the Narrow And Broad View Of CSR.
Corporate social responsibility is a common word associated with contemporary business organizations. The primary purpose for which an organization is created is that of making profit. However as a citizen of the society it is also the duty of the organization to take care of the needs of the society (Tai & Chuang, 2014). It has been observed in the documentary Blood, Sweat and T-shirt episode 4 that the fashion organizations in UK are outsourcing their work to India. The workers in the Indian factories are provided with a very derogative working environment and treatment which is not only against human rights but also legal provision. The workers in such factories are not provided any health and safety tools and also not paid adequately so that they can support themselves.
The purpose of the report is to analyze the circumstances in the light of various ethical theories. The paper provides a discussion in relation to both the Narrow and the bread views of CSR and analyzing them in the light of Kant’s deontology ethics.
The paper emphasizes that the broad view of CSR is much more ethical as compared to the narrow view in the light of ethical theories. The paper also emphasizes that what the UK organizations are doing is not ethically correct.
It has been stated by Schwartz (2017) those organizations are formed for gaining profit. When the incorporation of a company has been done for the purpose of only gaining profit its primary responsibility is of making profit only rather than indulging in any other responsibility. Thus the narrow view of CSR states that the organization should only focus on making profit and not to care for the society as a whole. The view has been supported by Milton Friedman in his book “Capitalism and Freedom (Friedman, 2009). It had been argued in this book that the organizations should only focus on making profit and not to care for the society as a whole. On the other hand the duty which is owed towards the society is owed by the shareholders of the organization. This means that the shareholders who earn profit through the organization have to duty of acting in the interest of the society. The profits they earn can be directed towards the betterment of the society by themselves and not the organization. In addition it has been argued by Carroll (2015) that the organizations are subjected to several taxes by the government in relation to their operations. This means that it is the duty of the government to utilize the taxes paid by the organization towards the betterment of the society.
The organization should therefore not be subjected to an additional duty of CSR as such duty is not imposed on a normal person with the society. In addition where the organization is using various resources in relation to their operations which belong to the society and causing harm to the society in way of pollution that are also paying additional money such as environment taxes and resource use payments. Thus the organizations have no duty to indulge in the betterment of the society. However the narrow views of CSR have been considerably criticized by the proponents of non consequential ethics, environment supporters and proponents of the bread view of CSR. In order to analyze the ethicalness of this view the Broad view needs to be discussed. In the given situation the narrow view of CSR has been adopted by the organizations in UK. This is because their major focus is on making profit rather than addressing the needs of the society. In the given situation it has been provided that the organizations are ignoring the problems faced by the workers in India and is only focusing on getting the products at the lowest price. This is because there are facing stiff competition from competitors in UK to provide cloths at low price and the demand of cloths are also significantly increasing in the high street. In the given situation it can be stated that the actions of the UK organizations is justified as per the narrow scope of CSR.
UK Fashion Organizations and Outsourcing to India
As discussed above there are two divisions of CSR one is the narrow view and the other is the broad view. This section of the report will discuss the broad view of CSR. The organization exerts significant influence of the society with respect to the position held by them. The power and influence which the organizations have in relation to the society has increased significantly in the modern times where the economy has become considerably capitalist. According to the view it is the duty of the organizations to behave in an ethical manner and also ensure the interest of the society as it is one of its stakeholders. As the organization uses the resources of the society and their operation significantly effects the environment is the duty of the organization to act in a way which would restore the balance in the society. There are various benefits which an organization is subjected to when they indulge into CSR activities. It has been stated by Steenkamp (2017) that the organizations under the bread concept of CSR as a tool of advertisement. When the consumers are aware about the fact that the organization is making an effort in relation to the society they feel good to be associated with such organization. In addition when the society is aware that an organization bases its operations on ethical principles they are more likely to have trust on the organization. The concept of broad view of CSR had been brought to existence by Keith Davis. According to him it is not ethical for the businesses to base their decision making only in relation to making profit. Businesses have the responsibility of perceiving that the actions of the organization are going to have consequences of the society and as a good citizen they have to ensure that they mitigate any losses which are caused to the society because of their actions. There is a primary and secondary relationship which the organizations have with several sections of the society and thus it is the duty of the organization to act as a responsible citizen and ensure the benefit of the society as a whole (Ruggie, 2017).
In the given situation is seen that the organizations in UK do not adopt the broad view of CSR. This is because their major focus is on making profit rather than addressing the needs of the society. In spite of having knowledge that the workers in the Indian factories from where work is sourced are being subjected to inhuman treatment they the UK retailers are still sourcing their products for such factories. Their actions are having a significant impact on the workers as the factory owners are making large profits and ignoring the needs of the workers. It can be argued that if the retailers stop to outsource work form such factories then the situation of the workers would be subjected to more detriment as they would not be able to get money to buy their necessities. However this argument cannot be the basis on which the approach of the retailers can be justified as there are several alternatives which are available.
Broad and Narrow Views of CSR
Deontology ethics is an ethical decision making standard theory which has been provided by Immanuel Kant (Kant, 2014). The theory is a non consequential theory based on categorical imperatives (Kant, 2018). There are three elements which are provided by Kant in relation to ethical making which are Universal law, Means of ends and good will. According to the theory it is the duty of businesses to treat people as ends themselves and not as means of achieving the end (Bowie, 2017). Kant argues that if a person feels that the actions which he indulges in would be correct even if the whole world indulges in the action than the actions would be considered as ethically correct. On the contradiction where the person will have the knowledge that if everyone indulging in the action would not be right for the society then the action is not morally correct (Werhane, 2014). As per the theory of Kant no person should be exploited towards achieving a purpose. When making a decision under deontology ethics the person has to know that who they owe a duty to, what is the duty and is the duty being performed in a proper manner. Consequences or outcome have no legal significance in relation to theory which means that decision should never be based on the outcome. If the decision is in accordance to the duty owed it should be taken regardless of the outcome of the decision.
According to the deontology theory discussed above people should not be used a means of end. In addition the theory provides that if a person feels that the actions which he indulges in would be correct even if the whole world indulges in the action than the actions would be considered as ethically correct. On the contradiction where the person will have the knowledge that if everyone indulging in the action would not be right for the society then the action is not morally correct. It has been provided by Carroll (2015) that the narrow view of CSR that organizations are formed for gaining profit. When the incorporation of a company has been done for the purpose of only gaining profit its primary responsibility is of making profit only rather than indulging in any other responsibility. Thus the narrow view of CSR states that the organization should only focus on making profit and not to care for the society as a whole. From the meaning of the narrow view it can be stated that if every organization indulges in actions which are done by the British clothing industry than it would not been good for the society. Thus the narrow view of CSR is nit ethically correct as compared to the broad view which proposes to mitigate any losses which have been caused to the society.
In relation to the power dynamics which is provided to the manufacturers by the retailers it can be stated that it is the duty of the retailers to ensure that the manufacturers act ethically while managing the workers. In the given situation it can be stated that as the UK retailers are not ensuring the interest of the workers that are not acting ethically. They are using the workers as a means of end rather than end themselves. The retailers have a duty towards the factory workers as well as they are the stakeholders of their operations. They have to ensure that they make the consumers aware about the situation and seek help from them through their participation.
Conclusion
The paper has discussed views in relation to both narrow and broad view of CSR. It has provided arguments for and against both the views of CSR. The paper through the discussion of ethical theory of deontology comes to a conclusion that broad view of CSR is more ethical then the narrow view of CSR. The retailers in UK are not doing must to support the workers who have been subjected to significant detriment by the manufacturers. This is because they have adopted a narrow view of CSR which is not ethically correct. As the retailers are not taking any actions against the factory owners they are giving more powers to the factory owners to exploit the workers.
The following recommendations have been made by the paper in relation to the issue:
- The retailers have to ensure that they themselves verify the working condition which are provided to the workers in the Indian factories and not rely on the statement of the owners
- The retailers have to raise the awareness of the consumers in relation to the issue so that they understand the problem and their role towards addressing it. Once the consumers have such knowledge they would not want to purchase products of organizations who indulge in unethical practices.
References
Bowie, N. E. (2017). Business ethics: A Kantian perspective. Cambridge University Press.
Carroll, A. B. (2015). Corporate social responsibility. Organizational dynamics, 44(2), 87-96.
Friedman, M. (2009). Capitalism and freedom. University of Chicago press.
Kant, I. (2014). What does it mean to orient oneself in thinking?. Daniel Fidel Ferrer, Verlag..
Kant, I. (2018). Groundwork for the Metaphysics of Morals (p. 409). Yale University Press.
Ruggie, J. G. (2017). The theory and practice of learning networks: Corporate social responsibility and the Global Compact law. In Learning To Talk (pp. 32-42). Routledge.
Schwartz, M. S. (2017). Corporate social responsibility. Routledge.
Steenkamp, J. B. (2017). Corporate Social Responsibility. In Global Brand Strategy (pp. 209-238). Palgrave Macmillan, London.
Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.
Werhane, P. H. (2014). Moral imagination. John Wiley & Sons, Ltd.
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