Interpretations of Social Responsibility

Interpretations of Social Responsibility

Interpretations of Social Responsibility

Another reason for the differences between supporters and critics of socially responsible management is that the concept can be interpreted in five different ways:

1 Social responsibility as covert profit maximization: The manager is still a profit maximizer but he recognizes that changes in the social and political environment of business require him to adopt the posture of social responsibility.

2 Social responsibility as heeding the public consensus: If the manager does anything considered wrong or improper by the public, he is punished.

3 Social responsibility as the balancing of the various interests affected by the corporation: The manager looks upon himself as an impartial arbiter.

4 Social responsibility as business statesmanship: The manager utilizes the resources of the company to bring about a better world.

5 Social responsibility as fulfilment of the manager role: The manager behaves in a socially responsible way by living up to his role expectations.

The view that social responsibility is covert profit maximization has the appearance of bridging the gap between the profit ethic and the ethic of social responsibility. Writers who take this position put the analysis into the long-run time dimension. They point out that the company is a creature of the state and in a democracy society controls the state. Therefore, if the members of society become displeased with the corporation, they can destroy it and put another form of economic organization in its place. Over the long run, therefore, the company must meet the demands of society if it is to survive. Managers must be alert to social trends and conduct the affairs of the company in accordance with them. If society demands more socially responsible behaviour from corporations, managers will behave in the required way. But the underlying goal still remains profit maximization. Managers are only willing to behave in socially responsible ways that reduce short-run profits because they must for the company to survive. By surviving they "optimize"-earn the largest possible profit in the long run.

This interpretation of social responsibility would be valid only if Adam Smith's conception of man as an inherently selfish being were correct. Smith based his economic ideas on the egoistic theory of motivation which had been formulated earlier by Thomas Hobbes and Jeremy Bentham. This theory has been accepted by most economists from Adam Smith's time until the present, but it has been rejected by psychologists and philosophers. The idea of self-interest, in its broadest sense, means anything the self happens to be identified with. In Adam Smith's day the members of the rising business class were interested in making money. It was an understandable error, therefore, to think of pecuniary acquisitiveness as an inherent characteristic of human nature. But the self can be identified with many other things besides accumulation of wealth (e.g., helping the underprivileged, pursuit of a fascinating hobby, enjoyment of aesthetic experiences). All conduct is not necessarily in behalf of the acquisitive kind of self. "Thus, psychological egoism must be either trivial or false: in the use in which it has significance it is false; in the use in which it is true it is trivial."30 One could just as well use the self-interest theory of motivation to argue that the modern manager identifies his self with the values, goals, and needs of society and therefore behaves in a socially responsible manner.


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