Add to this the Wal-Mart effect of business in general, with companies having to compete with Wal-Mart's low costs, made possible partially due to their low wages, failure to pay overtime, nonexistent benefits, and resistance to unionization, and a ripple effect has been cast on the waters, causing other companies to follow suit, in an effort to be competitive.
Changing Society Equals a Changing Demand for Corporate Social Responsibility:
Today's changing society has increased the demand for corporate social responsibility. The decades of ethical abuse, coupled with the recent financial soul shattering scandals, has called for businesses to renew their social contract with society (Basu & Palazzo, 2008). Society now demands that corporations take responsibility for their interactions with the world.
A generation ago, most people didn't think tobacco was a dangerous health threat. Just a few years ago, obesity was seen as a combination of genetics and unhealthy lifestyle choices - certainly not the responsibility of food companies. Today, ageism is rarely seen as a corporate responsibility beyond compliance with the law - but in an era of dramatic demographic shifts, it soon will be (Zadek, 2004, p. 125).
These few changes demonstrate how societal changes are increasing the demands for corporate social responsibility, and will be increasingly important to managers. Everyone from governments, to activists, to the media are now holding organizations accountable for the social consequences of their actions. A plethora of organizations even rank corporations on the performance of their corporate social responsibility (Porter & Kramer, 2006).
As Zadek (2004) and Scherer and Palazzo (2007) surmise, the trick for managers will be to predict and respond to society's changing awareness of social issues. Yet, due to the complexity of the issues and stakeholders' sometimes underinformed expectations about business capacities and their responsibilities to address these social problems, this task is daunting, at best. Managers that lead the response to social issues...
The Body Shop's human rights policies are industry leaders and give the bath and body products retailer a way of differentiating themselves from their competition, just as BP's acknowledgment that they too had a responsibility to address the issue of global warming.
Managers of the future will have to use organizational culture and ethical values to meet the social contract demands of not only their own corporation, but their business network as well, in the future (Daboub & Calton, 2002).
Conclusion:
In the end, increasing competition and increasing societal demand will lead to an increased need to renew a corporation's social contract and further commit to corporate social responsibility. This will continue to be one of the most demanding challenges of managers in the future. Only through meeting the social demands of the public, will organizations hope to gain the trust and loyalty of both consumers and investors.
References
Basu, K. & Palazzo, G. Jan 2008, "Corporate social responsibility: A process model of sensemaking," Academy of Management Review vol. 33, no. 1, pp. 122-136.
Daboub, a. & Calton, J. Dec 2002, "Stakeholder learning dialogues: How to preserve ethical responsibility in networks," Journal of Business Ethics vol. 41, no. 1/2, pp. 85-98.
Dahlin, L. 2007, "Where have all the ethics gone? Business ethics and corporate social responsibility through the years," Proceedings of the Northeast Business & Economics Association pp. 360-366.
Porter, M. & Kramer, M. Dec 2006, "Strategy & society: The link between competitive advantage and corporate social responsibility," Harvard Business Review vol. 84, no. 12, pp. 78-92.
Scherer, a. & Palazzo, G. Oct 2007, "Toward a political conception of corporate responsibility," Academy of Management Review vol. 32, no. 4, pp. 1096-1120.
Zadek, S. Dec 2004, "The path to corporate responsibility," Harvard Business Review vol. 82,…
