Social Justice and the Need for Distribution of Wealth

Corporate Social Responsibility and the Triple Bottom Line: Why Distributive Justice Matters More Than Accounting Tricks That multinational corporations have an ethical duty to be socially responsible has been made very clear by businessmen and social justice advocates like Sir James Goldsmith (Rose, 1994). The question that remains is precisely how they are to execute that social responsibility.

Some contend that a triple bottom line (TBL) concept is the way to measure whether a corporation is meeting its ethical obligations (by focusing on the "interrelated dimensions of profits, people, and the planet"), but TBL accounting is simply that -- accounting: it is not an ethical program that ensures social responsibility, only one that attempts to measure it (Slaper, Hall, 2011). Indeed, as Norman and MacDonald (2003) note, the TBL "is an unhelpful addition to current discussion of corporate social responsibility" (p. 1).

This paper will show what the differences are between corporate social responsibility and the TBL, as well as discuss the idea of distributive justice and the current state of the distribution of wealth. It will conclude by showing why triple bottom line concepts do not ensure corporate social responsibility simply because they continue to place more emphasis on earnings than they do no social responsibility. From that perspective, corporations need to re-orient themselves with the duty they owe society, as Goldsmith (1994) argues.

Corporate social responsibility (CSR) programs are effective forms of management that directly and indirectly impact the "social, environmental and economic environment in which" the corporation functions (Castka, Bamber, Sharp, 2005, p. vii). In this context, corporations are viewed by societies as influential in the development of a better world in which there is concern for social and environmental safety.

By using an ethical foundation for a business model, corporations can actually gain substantial market share and public trust because they are viewed as being good for the environment and for communities (as well as delivering a good product). It is not necessary therefore to use accounting concepts like TBL, since there is plenty of evidence of corporations failing to live up to ethical practices losing market share to companies that practice them in real life (Ferrell, 2010).

The factors that affect the implementation of CSR programs can range from governmental standards to stakeholder involvement to moral and ethical cultures (or lack thereof) within the corporate entity. Thus corporate social responsibility is a framework that supports a company's goal of acting in an ethical manner that places the 3 P's -- profits, people, and planet -- in the right position when it comes to prioritizing: CSR puts people first. One example of the good CSR is Keller Williams.

The business model of Keller Williams is based on the motto "God, Family, Business" in that order and the entire organization is run like a big family, with individual agents teaching the Ignite classes (designed to "ignite" one's business right out of the gate) and always helping any facet of the business that one might be struggling with. The organizational culture of Keller Williams is one that focuses on the agent rather than the broker and supports the idea that every agent is CEO of his own company.

To that end, Keller Williams also has a profit sharing system in place in which profits from transactions are divided up among agents who assist in recruiting/bringing new agents to Keller Williams. In short, Keller Williams has a great business plan that focuses on the fundamental values of society by putting people ahead of profits, which goes to foster a positive society where all concerns are catered to, from environmental to economic.

CSR contrasts with TBL in the sense that the former is an activities-driven model based on putting people first and the latter is an accounting-driven model based on putting profits first. The TBL concept is essentially situated in the modern management maxim that "if you can't measure it, you can't manage it" (Norman, MacDonald, 2003, p. 1).

This is why major multinationals like AT&T and Shell "have used 3BL terminology in their press releases" -- they are paying lip service to the idea of social responsibility (and this is nothing new, as all companies do this -- even Enron, which was nothing more than a giant pump and dump: it had an "exhaustive code of ethics" which made it look socially responsible on the outside, though it was anything but on the inside) (Norman, MacDonald, 2003, p. 1).

Thus the problem with TBL is that is merely a way for a company to "look" like it is involved in social justice -- but in reality it is simply nothing more than looks produced by accounting tricks. It does not guarantee that a company is truly socially and ethically responsible.

While it is noted that TBL is said to be a way in which multinationals can authenticate their convergence, strong social-obligation and transparency claims by analyzing the social and environmental profit/loss bottom line, but the reality is that the criteria to measure these so-called bottom lines is vague and imprecise and can easily be manipulated in order to produce a plausible and positive outcome (Norman, MacDonald, 2003, p. 3). Enron, for example, was very skilled at manipulating data to make its books look better than they actually were.

The same can be said of any company that attempts to make itself look more socially responsible than it actually is. Pepsi is a good example of a company that attempts to project an image of social responsibility through TBL awareness but which lacks a sufficient framework and spirit of mission that can actually produce the ethical outcomes it presents itself as achieving (Ferrell, 2010). Instead of using manipulative accounting practices in order to come across as caring about social justice, a better practice is to actually engage in distributive justice.

Distributive justice is based on the idea of fairness and equality -- that society is communal and that all members of society should be cared for equally. It does not mean that capitalism must be ruled out per se but that corporations have a duty to protect the individuals in their own society rather than to seek higher profits by basing production in countries where labor can be had for less and then exploiting the difference by selling those products in the country where the corporation has ceased employing workers.

This is not healthy or conducive to justice, as Goldsmith iterates (1994). If corporations do not act fairly regarding their own society they will soon have no society left for which to produce goods and services -- because it will not have paid its workers fairly (or at all) and those that it does employ will be paid pennies on the dollar and be unable to afford the products that the company wants to sell at a higher profit margin rate.

When the company puts profits ahead of people, it diminishes distributive justice, which in its most basic form is simply when an entity with wealth spreads the wealth around in fairness to those in its society. Free-trade agreements like NAFTA and GATT and the upcoming TPP have all but eliminated a sense of distributive justice because they allow corporations to go overseas for labor in order to seek higher profits. Thus the current state of the distribution of wealth today is shoddy: it is non-existent.

Seeking higher and higher profits year over year has reached its peak point and the global economy is now on the brink of faltering mightily and tumbling head over heels into a global recession unlike anything seen before. The pursuit of profits over people has led to the people now being unable or unwilling to spend what little they have. If no one is spending, corporations are not making money.

Instead of acting responsibly and spreading the wealth among society (in the form of hiring local labor at fair wages), corporations have looked for cheap (slave) labor and caused the local population at home to be unemployed. This is a vicious cycle.

The distribution of wealth in today's world is based on the fiat money system of the Federal Reserve: it prints more cash for social programs (welfare) and puts the debt burden on the tax payer (who is unemployed because NAFTA and GATT have put it in the minds of the multinationals that they must go overseas). The Fed charges interest on its money creation scheme and the debt simply piles up. There is no real distribution of wealth today as a result.

Corporations need to take action, return jobs to their native countries, because if they do not accept the responsibility that they have as producers to protect and value their society, they will not have any society left at all. The TBL concept does not address this issue at all -- it merely provides corporations a way to give window dressing to their actions, pay lip service to the concept of social justice, and project an image of righteousness.

But if they really wanted to be righteous, they would reject NAFTA and GATT and promote politicians that also rejected these trade deals that are actually anti-social. Therefore, on some level it is necessary for all leaders, whether in business, society or government to work together -- because they are all, ultimately, responsible and play a role in keeping society working. Should any deviate from the standard of ethical behavior and social responsibility, society itself will pay the cost as a trickle down effect will be produced.

The best leaders are able to balance the emotional and the logical, underscoring the need for continual improvement and innovation to ensure challenging objectives are accomplished -- and there is no more challenging objective than implementing CSR in a world where there is very little left of true leadership in the sense of having a "spirit of mission," a strong sense of ethics and morality, and a desire to be a socially responsible corporate entity. As the saying goes, if the head is rotten so too will be the parts.

The heads of the corporate entities and of the social groups and of the states -- essentially all of society's leaders -- must work together on a mutual basis of contributing to the common good to implement programs of CSR. It truly is a community-based operation.

All members of the community should be on the same page and should buy into the theory of social responsibility and of spirit of mission so that, as in the days of ancient Sparta, there is a uniformity from top-down, amongst all citizens and stakeholders, in the sense that everyone works toward and benefits from the implementation of the program of corporate social responsibility. It is leadership that is the biggest factor in the implementation of corporate social responsibility and distributive justice.

Goldsmith was a leader and looked out for his community by rejecting proposals that would violate the ethical responsibility he had major producer to take jobs away from his society. Communities need more leaders like him. Multinationals are problematic in that the leaders are faceless and do.