This paper examines the relationship between ethical business practice and corporate success, arguing that companies embracing corporate social responsibility (CSR) tend to outperform those that do not. Drawing on Carroll and Shabana's three tenets of CSR — the manager as public trustee, balancing competing claims to corporate resources, and corporate philanthropy — the paper illustrates how ethical conduct and business profitability reinforce each other. Real-world examples, including the New Orleans Saints' Hurricane Katrina Relief Fund, Coca-Cola's polar bear conservation campaign, and the Miami Marlins' stadium controversy, demonstrate the tangible consequences of ethical and unethical corporate behavior.
Ethical practice in business is a contentious issue. Many argue that businesses can operate in a purely self-interested, Machiavellian fashion without incurring any harmful consequences. Certainly, there are businesses that operate in an ignoble manner without punishment. However, examples such as the Bernie Madoff and Enron scandals exemplify how businesses that act solely in their own self-interest and ignore virtuous ethics will generally suffer negative consequences. To this end, successful businesses typically act in an altruistic spirit. Such corporate altruism is referred to as corporate social responsibility, and in order to become successful, businesses must deploy corporate social responsibility practices.
There are many manifestations of corporate social responsibility, all of which refer to the ways in which businesses contribute toward the improvement of society. There are three tenets of corporate social responsibility, including the role of the manager as a public trustee, the necessity of balancing competing claims to corporate resources, and the need for corporate philanthropy (Carroll & Shabana, 2010). These three aspects reflect the way in which corporate social responsibility makes the business inextricably linked with society. The business does not exist in a self-interested vacuum but instead must act in a manner that aids society.
The contemporary business climate is replete with examples of businesses that have embraced corporate social responsibility. For example, in the wake of Hurricane Katrina, the New Orleans Saints enacted a Hurricane Katrina Relief Fund that raised money to assist the victims of the massive natural disaster. The decision to establish the relief fund was ethically sound in that it assisted the collective welfare of society. Through this fundraising effort, the Saints organization acted as corporate philanthropists and raised over one million dollars in relief aid.
One of the questions that invariably arises following instances of corporate philanthropy is whether such philanthropy equates with good business. The Saints example reflects the way in which sound ethics corresponds with sound business practice. Not only did providing hurricane relief assist the New Orleans community, but it also supported the fan base upon which the Saints organization depends. Had the Saints not engaged in corporate social responsibility, they likely would have abdicated a significant proportion of their market base.
"Coca-Cola's polar bear campaign as brand-aligned philanthropy"
"Miami Marlins' ethical failures hurt fan base and profits"
Ethical practices in business are complex, as there are always businesses that engage in questionable ethics while reaping robust profits. However, sound business strategy ultimately mandates that businesses exhibit more morally just ethics, including corporate social responsibility, in order to both benefit society and increase business profits.
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