Corporate Social Responsibility

Corporate  social responsibility is one of the most important aspects when discussing business ethics. There are different ideas and thoughts as to what businesses are held responsible for. This blog series is going to include three entries that will discuss this topic in detail.

What is a Corporation responsibility? According to Bansal (2009) the legal accountability of corporations is to profit their shareholders. With profit comes power and powerful corporations can use their power to gain more power, creating even more profits. This can cause ethical problems because the more power a corporation the harder it becomes to eject.

Different Views:

According to Jennings (2012) Edward Freeman's thoughts is that corporations have ceased to be merely legal devices through which the private business transactions of individuals may be carried on. Corporations have become both a method of property tenure and a means of organizing economic life. Freeman's overall standpoint is that the idea of the managerial capitalism can be replaced by fiduciary duty to stakeholders. The main point of his argument is that in order to reanalyze corporations the following question should be answered: For whose benefit and at whose expense should the corporation be managed.

Freeman's viewpoint is very much through the stakeholder's eyes, wanting to include all aspects of stakeholders, "suppliers,customers,employees,stockholders, local community" (Jennings, 2012) in their roles as an agent for their groups. He argues that the legal, economic, political and moral challenges to the currently received theory of an organization  as a connection to the owners of the factors of production and customers, require us to revise the concept.

I agree with this standpoint as corporations need to ask themselves whose benefit and at what and whose expense should the corporation be managed. This is a question that Fannie Mae discussed in the other posts did not take into account and should have. It would have led to better ethical decisions.


According to Friedman (1970) his viewpoint is that social responsibilities of businesses in a free enterprise system is that they are standing up for free enterprise when they denounce that business is not concerned with merely profit but also with promoting desirable social ends that business has a social conscience. They take responsibility for providing employment, eliminating discrimination, avoiding pollution.

Overall Friedman's viewpoint is that one's own ethics do go hand in hand with what they feel social responsibilities should be. This does make it hard , as  Friedman (1970) points out the difficulty of exercising social responsibility illustrates the great virtue of private competitive enterprise it forces individuals to be responsible for their own actions and makes it difficult for them to exploit other individuals for selfish and unethical act.s They can only do good but at their own expense.

I really agree with Friedman's viewpoint of social responsibility as I feel that an organization can only be as good as the individuals who work in it. If an organization has individuals who have high ethical standards the company is more likely to not get into unethical trouble at the cost of employee actions. However if an organization has individuals who have a low standard of ethics then it is more likely to not be socially responsible.























Bansal, P. (2009). Corporate Social Responsibility: The Good, the Bad, and the Ugly. Administrative Science Quarterly, 54(1), 182-184.

Jennings, M. (2012). Business ethics: Case studies and selected readings (7th ed.). Australia: South-Western, Cengage Learning. 

 Friedman, M. (1970). The social responsibility of businesses is to increase its profits. The New York Times. http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html