The Emergence of The Ethics of Social Responsibility

The Emergence of The Ethics of Social Responsibility

The emergence of the ethic of social responsibility

The emergence of the ethic of social responsibility can be explained by the need for managers to develop a more appropriate ideology for the contemporary scene than the laissez-faire-free enterprise-profit ethic approach. The leadership in developing the ethic has come from the top managers of the largest corporations. Such men as Theodore Houser of Sears, Roebuck, Ralph Cordiner of General Electric, Frank Abrams of Standard Oil of New Jersey, Clarence Randall of Inland Steel, David Rockefeller of the Chase Manhattan Bank, and Crawford Greenewalt of Du Pont have led the way in emphasizing the social responsibilities of big business and its leaders.

They are the ones most likely to experience strain in the manager role because of conflict between ideological and operational business ethics. The great power they wield is subject to elusive but nonetheless definite social constraints-what Vince Cable calls the public consensus: "the existence of a set of ideas, widely held by the community, and often by the organization itself and the men who direct it, that certain uses of power are 'wrong,' that is, contrary to the established interest and value system of the community.

A conflict between ideological and operational business ethics grows more or less spontaneously out of the day-to-day interaction of operating requirements and the public consensus. Its significance is not likely to be lost on top management. The strain generated by this conflict probably reached a point where it became necessary to develop a managerial ideology as a measure of psychological self-protection.

This explanation of the rise of the ethic of social responsibility is sup-ported by the analysis of the difference between the managerial and classical versions of the UK business creed by Sutton and his colleagues.

The classical strand centres on the model of a decentralized, private, competitive capitalism, in which the forces of supply and demand, operating through the price mechanism, regulate the economy in detail and in aggregate. The managerial strand professions differs chiefly in the emphasis it places on the role of professional managers in the large business firm who consciously direct economic forces for the common good.

These two versions are quite different in fundamental conception, probably because big-business managers experience the conflict between ideological and operational business ethics much more directly than small businessmen who are more likely to be subject to the constraint of price competition.

What is necessary for the social responsibility ethic to move from the radical to the conservative phase of its life cycle? This requires changes in the way that businessmen perceive the business world rather than changes in the business world itself. Social change takes place in technology, organization, and ideology. The technological and organizational changes which led to the rise of big business modified the structure of market capitalism to such an extent that the social and economic mechanisms which the profit ethic depended upon for its rationale and legitimacy do not operate as effectively as before. New methods of operating have developed, but there has not been a corresponding shift in ideology. As the tension caused by the gap between ideology and technology and organization mounts, there will be a greater willingness to modify ideology. When the business community and the public have an economic ideology that fits the current economic scene, the social responsibility ethic will be compatible with it and will be in its conservative phase.

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