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Social Responsibility and Organizational Ethics

Kotler, Philip, Roberto, Ned, and Lee, Nancy (2002). Social problems that are outside their normal areas of
marketing: Improving the quality of life (2nd ed.). Thousand operation.
Oaks, CA: Sage.
Kotler, Philip, and Zaltman, Gerald (1971, July). Social market- The areas in which business can become involved to
ing: An approach to planned social change. Journal of Mar- protect and improve the welfare of society are numerous
keting, 35, 3–12.
and diverse. Some of the most publicized of these areas are
Pride, William M., and Ferrell, O. C. (2006). Marketing concepts urban affairs, consumer affairs, environmental affairs, and
and strategies. Boston: Houghton Mifflin.
employment practices. Although numerous businesses are
involved in socially responsible activities, much contro-
Allen D. Truell versy persists about whether such involvement is necessary
or appropriate. There are several arguments for and
against businesses performing socially responsible activi-
ties.
SOCIAL
RESPONSIBILITY AND Arguments in Support. The best-known argument sup-
ORGANIZATIONAL porting such activities by business is that because business
ETHICS is a subset of and exerts a significant impact on society, it
has the responsibility to help improve society. Since soci-
The term social responsibility means different things to dif- ety asks no more and no less of any of its members, why
ferent people. Generally, corporate social responsibility is
should business be exempt from such responsibility?
the obligation to take action that protects and improves
Additionally, profitability and growth go hand in hand
the welfare of society as a whole, as well as supports orga-
nizational interests. According to the concept of corporate with responsible treatment of employees, customers, and
social responsibility, a manager must strive to achieve both the community. Only a few studies, however, have indi-
organizational and societal goals. cated a relationship between corporate social responsibil-
ity and profitability.
CURRENT PERSPECTIVES
Arguments Against. The distinguished economist Milton
Current perspectives regarding the fundamentals of social
responsibility for businesses include the long-standing Friedman (1912– ) advanced one of the better-known
Davis model of corporate social responsibility, various cat- arguments against specific social responsibility activities.
egories of business social responsibility, and varying posi- Friedman argued that making business managers simulta-
tions regarding the role and expectations for business in neously responsible to business owners for reaching profit
the social responsibility arena. objectives and to society for enhancing societal welfare
First, the Davis model for social responsibility, devel- represents a conflict of interest that has the potential to
oped by Keith Davis, suggests that there are five key con- cause the demise of business. According to Friedman, this
cepts or propositions that drive business socially demise almost certainly will occur if business consistently
responsible behavior. These are: is expected to behave in a socially responsible manner
when this is in direct conflict with private organizational
Proposition 1: Social responsibility arises from social
objectives. He also argued that to require business man-
power.
agers to pursue socially responsible objectives may be
Proposition 2: Business shall operate as an open sys- unethical, since it requires managers to spend time,
tem, with open receipt of inputs from society and money, and other resources that really belong to other
open disclosure of its operation to the public. purposes and are supported by other individuals (e.g.,
Proposition 3: The social costs and benefits of an investors, customers, owners, leaders).
activity, product, or service shall be thoroughly Regardless of which argument or combination of
calculated and considered in deciding whether to arguments particular managers might support, they must
proceed with it.
make a concerted effort to perform all legally required
Proposition 4: Social costs related to each activity, socially responsible activities, should consider voluntarily
product, or service shall be passed on to the con- performing socially responsible activities beyond those
sumer. legally required, and inform all relevant individuals of the
Proposition 5: Business institutions, as citizens, have extent to which their organization will become involved in
the responsibility to become involved in social performing social responsibility activities.

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