Tag: ethics

Which flavour of CSR – pure or impure?

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One way of thinking about corporate social responsibility is to ask:

– what a business must do?
– what a business could do?
– what a business should do?

What are the reasons for adhering to ‘ethical’ values? If managers make the link to business goals (ie to help make money by pleasing customers or improve the experience for staff) then the CSR interests are aligned with those of the shareholders. Alex Oliver at Cambridge University calls this ‘impure’ CSR. Milton Friedman describes impure CSR as “hypocritical window dressing”.

Friedman says the social responsibility of for-profit businesses (as opposed to businesses like Divine chocolate who are set up with more than shareholder return in mind) is “to increase profit”. That is their utilitarian role and how they bring most benefit to society. So if a business pursues profit and stays within all laws and regulations, have they fulfilled their CSR? It can also be argued that a focus purely on shareholder interests is the legal obligation of the executives – their fiduciary duty laid out in company law.

‘Pure CSR’ sees the managers go against the desires of the shareholders in spending their money for social good. Friedman says this is taxation (of the shareholders) without proper representation.

Or maybe it’s ok for CSR to be ambiguous? Machiavelli would say its about looking good in the eyes of different audiences – telling them what they need to hear. So the City gets told one message and customers and staff another.

Perhaps that is the difference between the nature of ethical decisions for a company (the ‘collective corporate mind’) in contrast to the ethical positions we are able to take as individuals?

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