Ethical Spending of Corporate Profits

Corporate Social Responsibility

As the title in the header suggests, this report is about corporate social responsibility. What shall be included in this report is a brief description of what is meant by corporate social responsibility, the contribution to the subject made by the article chosen for this report, a discussion of why the article is important as it relates to understanding and applying the knowledge related to corporate social responsibility, the review of an additional article that does much the same and a conclusion that ties it all together. While some may dismiss corporate social responsibility as needless and overly reactionary, there is such a thing as being both a good business person and a good steward towards society even if people widely disagree as to what the minimum standards should be.

Analysis

Business News Daily offers a good definition and summary of what corporate social responsibility is along with some examples of the same. As noted in the introduction, there is a variance among different parties as to what corporate social responsibility does and does not encompass and include. Even so, there are some common themes and trends that hold true in most definitions. Business experts tend to point to things like strong loyalty and a mobile-friendly shopping experience. However, the main linchpin that these experts point to is what businesses end up doing with the profits that they glean from doing business and serving their customers. Business News Daily defines as a business practicing behaviors and patterns that end up benefiting society. For example, a business donating money from their profits to the Red Cross would be an example of corporate social responsibility, often shortened to CSR. However, more modern definitions of corporate social responsibility relate to what is known as sustainability. This is the idea of being more environmentally friendly and engaging in business in such as a way that is a net break-even from an environmental standpoint or even an overall gain rather than being a net drain. Examples of this would include recycling paper and other materials, using cars that make use of renewable energy and so forth. The importance of focusing on things like this become more and more important as more customers became aware and cognizant of this. Some firms, whether it be from customer pressure or not, are reacting in kind. For example, a fashion company by the name of Pax Cult donates ten percent of its profits to organizations of the customers' choice. Indeed, it would seem that Millennials are one of the driving forces behind this newer form of the corporate social responsibility trend (Fallon, 2015).

As for an article that contributes to the corporate social responsibility paradigm, one was found that was printed in the New York Times last year. Indeed, Eduardo Porter speaks of the apparent need and motivation to drive corporations to do good when they do not necessarily wish to do so on their own volition. Porter speaks about the fact that some companies have been ahead of the curve for quite some time. An example would be the fact that Eastman Kodak was doing profit sharing in 1929. This was actually several years before Social Security even existed starting in the 1930's. Similarly, and nearly a generation before the Kodak example, Henry Ford doubled the wages of most of his workers to five dollars an hour. His rationale was seemingly business-related in that he stated that "a low-wage business is always insecure." Even if there was a business motive involved, the move by Ford was for the betterment of his workers. The contribution of this article is obviously that some firms have to be nudged and prodded into engaging in acts of corporate social responsibility. Some companies that are perceived to be going against that grain include fast food companies like McDonald's and Wendy's (Porter, 2014).

Finally, there is the corporate social responsibility-oriented article that says that the aforementioned companies like McDonald's and Wendy's that are refusing to engage in corporate social responsibility campaigns are doing so at their own peril and there is now a condition that companies simply cannot ignore and avoid engaging in ethically grounded actions. A Time article about the subject of corporate social responsibility notes that one of the main detractors of the practice was Milton Friedman. He referred to the practice and subject of corporate social responsibility as being "window dressing" and that the main goal of any business should be to become and remain profitable so that shareholder value is maximized and realized. While Friedman certainly has a point with respect to profits being necessary for a business to survive and thrive, there are many other people that assert that corporate social responsibility is not simply "window dressing" but is rather an example of a business giving back even though they are not legally obligated to do so. However, many argue that even if the law does not require such actions, there are moral and social imperatives that require it (Time, 2012).