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Ask Steve -- a.k.a. Oreport Your Own Ques...

Steve -- a.k.a. Oreport
Steve -- a.k.a. Oreport, Mensa Material - I'm not a 'joiner'
Category: General
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Is the corporate social responsibility to make a profit

Customer Question

Subject: corporate social responsibility of business.

The complete question # XXXXX is: Is the corporate social responsibility to make a profit. Does it pay for a corporation to be good?

Submitted: 11 years ago.
Category: General
Expert:  Steve -- a.k.a. Oreport replied 11 years ago.

Assuming that we are talking about a publicly held corporation -- a
corporation has a legal responsibility to make a profit for its
shareholders.  This is certainly true in today's suit-happy

I suppose that a case could be made that a corporation has a
social/moral responsibility to its clients and employees to make a
profit -- which enables it to stay in business to serve the first group while providing employment to the second group.

I sense that the meat of your question lies in the query: 'Does it pay for a corporation to be good?'

Of course, any meaningful answer to this question depends upon how the terms 'pay' and 'good' are defined.

A common sense definition of 'pay' in this context might be something like 'good will' or 'positive public corporate image'.

Logically, both of these could be said to positively impact the
business/social milieu in which the Corporation operates -- and thus
provide a real (if somewhat hard to measure) benefit to the Corporation.

It is difficult to pin down exactly what is meant by 'good corporate behavior' or by being a
'good corporate citizen'.  While it would be somewhat defined by
the corporate history or corporate culture -- a
corporation's good behavior will be defined and measured in much larger measure by the
above-mentioned business/social milieu in which it exists and operates.

In a capitalistic system, legal obligations will always outweigh social
ones -- in other words, profits will always come before social responsibility.

Although this reality could be viewed cynically -- at the most basic
level it's a matter of corporate self-preservation.  Without profits
operating capital dries up.  Without operating capital, a
corporation cannot continue to exist.

The ideal of course is to have shareholders and board members who are
enlightened enough to realize that the corporate citizenship can
actually ensure future profits by improving quality of life. 
This, in turn, makes for a higher satisfaction level among both clients
and employees.  Satisfied clients and employees make for a productive corporation operating in a profitable marketplace.

My dogs know better than to soil where they sleep -- we can only hope
that the average shareholder and the average Board of Directors -- along
with the average corporate management team will, one-day, be at least
as smart as the average canine.

Is this question a restatement of the other
question you have posted -- or are they two separate questions?

Let me know if you need more input.  If not, thanks for the
opportunity to assist you... I would really appreciate your honoring my
efforts by 'pushing the button' and Accepting this answer.

Good Luck!



Customer: replied 11 years ago.
Reply to Oreport's Post: Hi!
I am sorry that I opened my PC late night. It is OK but I need more material for this question. I give you more detail like I was reading following books:
1-Capitalism and Freedom by Milton Friedman
2-The End of Poverty by Jeffrey D. Sachs
3-The Way the World Works by Jude Wanniski

I post two different questions and each worth $25.00. Usually I open my PC latenight please don't worry.
Expert:  Steve -- a.k.a. Oreport replied 11 years ago.
OK, I understand that you need more material -- but just listing the
title of three books does not give me enough specific information about
what material you are still in need of.  I also need to know
approximately how much material you need -- as well as when you need it.

Thanks in advance.


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