Question

Don't forget that your reply to my post must be at least 150 words; and when replying to your classmates, your minimum word count is 50 words. Business Ethics Note: This week's Discussion Board operates a bit different . . . .

First, read The Case Against Corporate Social Responsibility.doc in this week's Required Resource folder. Then note what follows below before attempting to post.

The author argues that managers who sacrifice profit for the common good are in effect imposing a tax on their shareholders and arbitrarily deciding how that money should be spent. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they did so in a meaningful (i.e., high cost to profits) manner. They are, after all, paid to achieve business objectives, not use shareholder money to engineer the public good (assuming there is agreement on what, exactly, that is.)

Before responding to the questions below ask yourself the following: 1) is it true that “…doing what's best for society necessarily means sacrificing profits,” 2) are shareholders the only important and influential stakeholders in deciding how best to pursue corporate objectives, and 3) is government regulation, supplemented by self-regulation and civil society, the most effective way to strike a balance between profits and the public good?

Based on your individual conclusions regarding the above, answer the following questions:

Are profits and the general welfare basically incompatible? Why or why not?

If you believe CSR requires the sacrifice of some amount of profit, what amount is appropriate? Is that amount the same for all firms in all industries? How should the CEO decide?

Provide a separate paragraph for each question.

Answer 1

There is a perfect balance between the profit and common welfare and there must be a selected ratio between these two factors. The concept of general welfare may not be considered by the firm which is facing losses due to inadequate resources o produce these types of activities and if the firm has these resources then it will implement to increase its promotional activities.

While on the other hand, if adequate profits are collected by the organization and having greater advantages then the firm can think of being involved in general welfare activities and thus helping the common public. There are a number of organizations which are involved in the general welfare activities yet there are a number of firms which are participating in these activities despite having the lesser revenues The main reason behind this is the unavailability of a regular budget for these activities and they will not participate in these activities until they have adequate earnings and profits and some kind of tax invasion is also required by them to perform these sort of activities.

The turnover and general profit of the organization decides the involvement in CSR activities of any organization. There can be a variation in different firms on this basis. Some firms can be very keen in these activities while some have to do it as a compulsion.   As the basic objective of each activity is to earn the profit by having publicity but the other incentive can be the tax invasion. This is how the organizations can plan their CSR activities on the basis of profit earned.

It is important for the CEO to get settled down with the concurred profit and added profits can be passed to CSR activities. In some other incidences, when the firm wants to catch the attention in the market, these activities can be carried out.