Dong Weihang
UI400-741
Bronik Matwijkiw
Southeast Missouri State University
A Comprehensive discussion about corporate social responsibility
In recent years, economists have been debating whether corporations should take
on the social responsibility or not all the time. As a famous advocate of shareholder
management, Milton Friedman believes that the most important task for a business is
to maximize the profits. Some other economists argues that a corporation can not have
a long-term development without social responsibility’s contribution. What are the
reasons for social responsibility? What are the reasons against social responsibility?
Which opinion is more adaptable to current society? In my opinion, I support that
business should assume social obligations. The following paper is the discuss about
both sides.
Arguments for social obligation
Improve long term development and profits
This is the most popular view about for social responsibilities. According to
Donaldson, Thomas’ article, “success in satisfying multiple stakeholder interests rather
than in meeting conventional economic and financial criteria—would constitute the
ultimate test of corporate performance.” (1995) Business is a part of society,
constrained by social environment. For example, ill-educated labor force and polluted
natural environment is bad to firm. it decreases profits directly or indirectly. From Keith
Davis’s view, “This argument is actually a sophisticated concept of long-run profit
maximization. It seems a contradiction to suggest that spending money for social
programs will actually result in more profit for the business, but this is the normal result
of the better community and better society which these programs bring.” (1968)
Business may not obtain profits quickly from the investment for social duty. But long–
term low-cost production relies on accomplishment of social responsibilities. Therefore,
corporations invest for society will benefit continuously from the future.
Improve popularity and image
This view is closely associated with long term interest and development. if the firm
is considered reliable and responsible, its product and service will be popular in the
market. According to McGuire’s article, social responsibility can “improve corporate
image” (16). From Davis’ point, “……it may gain more customers, better employees
and other benefits”.
Corporation has force
This argument is about corporate resources. Some corporation (not all) not only
have capital resources and excellent technological expertise but gather management
talents. These make serving society possible. For example, Tencent, the most famous
company in China, has set up a series of public welfare information platforms and apps
which provide more convenient life in many aspects of daily life. In 2020, Tencent
issued a new plan that will open and provide its own technology and engineers to all
over the world to looking for the matched welfare project. Huawei, another famous
company in china, donates a large sum of money every year to institutions devote to
the research of cancer drug.
Under the pressure of government and public
This argument is that government and public are focus on businesses’ involvement
to solve social problems. With the rapid development of industry revolution, the
business is getting powerful and efficient. When facing serious problems that can’t cope
with, government will make corporations to deal with those problems. Henderson’s
article shows an example, “in February 1968 President Johnson announced a plan that
would place in the hands of private industry the responsibility for hiring and training
into productive employees.” (1968) At the same time, many citizens are frustrated by
institution and government. Henderson’s article states that, “many people have begun
to see that it is often easier and more fruitful to bring about change by pressuring
