Social Responsibility Is Subject of Considerable Debate.

Social responsibility is subject of considerable debate. For not-for-profit organizations, their responsibility is defined by their mandate. Their donors set this mandate, or at least they accept it. It is actually not much different in for-profit entities, except that the general perception is that earning profit is not socially responsible, whereas the activities of not-for-profit entities are generally considered to be socially responsible.

For a for-profit entity, there are two schools of thought. Now, Friedman (1970) makes a fairly coherent case that the social responsibility of business is to increase its profits. Simply stated, business exists to earn a return for its shareholders. When people donate to a not-for-profit entity, they expect that entity will perform certain acts, and it is the same with respect to for-profit entities. People are investing in those companies to earn a return, and therefore the role of management is to focus on earning that return. Many, however, do not subscribe to this view. While definitely businesses exist to provide investment return, they are also a part of our community and a part of our world. Key to the issue is the idea of negative externalities. Where the activities of a company result in negative consequences that are not priced into the profit/loss equation, the organization should then be obligated to ensure that such outcomes are not negative. This is an interesting challenge for business, because it can be tough to define societal benefit -- some very large businesses would probably have to shut down in order that the balance of their activities is not negative.

Many people prefer to strike a balance. They accept that businesses exist to turn a profit, but they also argue that businesses should at the very least avoiding harm. Just because the business can do something, does not mean that it should. So this is a fairly important distinction. Where Friedman's view is based on deontological ethics and the imperative provided by the role of the manager as agent, many people prefer to take the more balanced approach offered by utilitarianism. Thus, business should pay attention to the outcomes of its activities and ensure that it is making a positive contribution to the world. This still leaves interpretation as to what exactly is a positive contribution -- is polluting the atmosphere an acceptable trade-off for the promotion of transportation efficiency -- but at least is remains a viable starting point for the discussion about the responsibility of corporations to the world.

Part II. Ethical theories are fascinating because it is easy to see why people have trouble agreeing about so many ethical issues. Different perspectives arise from different ways of framing an issue, even where people are working with the same facts. Through in the real world reality where people are working with different information and it is not surprising that we see so much ethical conflict. Understanding the drivers of ethical decision making is very interesting.

For me, business codes is a good subject for discussion. When you look at ethical dilemmas, some are not even really dilemmas -- Enron for example is just egregious criminal activity. In those cases, I do not think the existence of codes matters at all. After all, we already have legal codes and a lot of times people ignore those. A lot of companies have ethical codes of conduct that they do not seem to put into practice.

However, there are situations in this world where an ethical dilemma would genuinely arise. Managers and employees are likely to have trouble when a true ethical dilemma arises, and this is the value of having an ethical code. At some point, the company has to take a stand with respect to ethical guidance, and provide that guidance to help their employees make the right decisions. That is the role of the ethical code -- the answer questions and provide guidance where there is no clear "right or wrong" situation at work.

Part III. If I want to talk about business involvement in politics, I wouldn't even worry about the international element. The big problem lies right here at home. So let's talk about that. Business is a stakeholder in government policy, and every business is affected in some way by government policy. So it is only natural that business would want to have some influence over policy -- at least to have its voice heard in policy discussions. Other stakeholders -- be they individuals or groups representing something like the environment that cannot speak for itself -- are equally entitled to have an influence over public policy.

And therein lies the rub. Business involvement in politics is not ethically wrong, per se, but it only becomes so when business involvement dictates politics, and where other stakeholders are excluded by virtues of the specific advantages that businesses possess. In particular, vast wealth, a lack of individual accountability, and infinite life. Normally, abuses of power are considered unethical in our society -- we have a problem with monopolies, we have a problem with nepotism and with corruption. So there needs to be an approach to the relationship between business and government that specifically reflects boundaries are the abuse of power, because corporations more than other stakeholders have a high level of power.

Corporations also have the unique ability to influence policy across borders, which also must be taken into consideration with our policy. The end result can be a world full of policies that serve the narrow interests of a few corporations, to the detriment not only of individuals and nations, but the world as a whole. There is certainly a hazard in allowing for a system where such power has no checks.

Lastly, there is considerable attention to pay to the issue of corruption. Corruption is something that affects everybody, because it represents a move towards economic inefficiency. While the U.S. has the Foreign Corrupt Practices Act, it is often not enforced and worse yet most other countries do not even have such policies. So aside from things like lobbying we see in the West there are some very direct forms of corruption that occur in other parts of the world, to the detriment of the people in that country. So corruption has to be a big part of our platform when discussing the issue of business involvement in politics.