Corporate Social Responsibility : Profit or Ethic?

The corporation is considered as an integrated part of society and the values of the organization are shaped by the perceptions of internal and external actors and stakeholders. So, Corporate Social Responsibility (CSR) is necessary for strategic management because it ensures the social legitimacy of the corporation as a good corporate citizen.

This is because the institutional environment of the organization, which reflects social and cultural expectations of specific appearance and behaviour of the corporation, determines legitimacy. In order to cope with social expectations, the organization is required to construct its image and social appearance in accordance with values and norms of the institutional environment. This institutional legitimacy is not always directly visible but may also be a tacit and presupposed structure of norms and habits as the basis for legitimate rational action.

Companies compete not only for resources and customers but also for influence and social recognition, and CSR holds promises of legitimacy and social acceptance. In these competitive processes for social recognition, companies often end up imitating each other in spite of differentiation being their competitive ambition.  

The role of the for-profit firm in society is highly consequential. Whether we are talking about environmental degradation or social cohesion, wealth distribution or global free trade, the answer to this question defines our immediate and future quality of existence. It determines the society we live in and will pass on to future generations.

The day of plunder, human exploitation, and financial chicanery by private businessmen has largely passed. And the day when profit maximization was the sole criterion of business success is rapidly fading. We are entering an era when private business will be judged solely in terms of its demonstrable contribution to the general welfare. An ideal concept of CSR would therefore combine economic and legal conceptions with ethical and philanthropic conceptions of the firm.

Companies are required to merge social and financial imperative to achieve superior performance based on a value-shift in the economy where the firm is conceived no longer as exclusively as an amoral instrument for profit maximization, but as a morally responsible actor with values and ethical principles.This is the essence of the moral concept of the corporation as a good citizen that in addition to earning money is concerned about caring for its social and ecological environment.

We need the ‘impact of the company's operations on the community and the environment.We may say that the firm is not only conceived as an economic and legal subject but also as an ethically responsible actor. The ethical and moral responsibilities can be defined as an effort to care not only for economic efficiency and legal compliance, but also to act responsibly in accordance with ethical principles.

The dimensions of responsible business practices in a developing country must therefore contribute to outcomes that empower people, enhance accountability, provide avenues for participation, promote non-discrimination and engage in business conduct that is ethical. Profit for a company is like oxygen for a person. If we don't have enough of it, we are out of the game. But if we think our life is about breathing, we are really missing something.