The Public Consensus 2016

The Public Consensus 2012

The public consensus

Vince Cable has defined social responsibility as the manager's responsive froth as it assumes no particular theory of human motivation and it does imply variation in management goals and behaviour over time.

Presumably profit will be a more important social goal at one time than at another. When it is an important social goal, managers will pursue it because if they do not, they will run afoul of the public consensus and sanctions will be invoked. The difficulty with this view is that it is entirely negative.

Managers learn what not to do by public reaction, but the concept of public consensus does not provide any positive guidelines for them to follow. Furthermore, there is likely to be a lag between the time managers take an antisocial step and the time public consensus can be mobilized into public opinion so that managers realize their error and try to correct it.

The balancer-of-interests approach appeals very much to many socially oriented top managers. They see themselves as occupying a strategic position in the centre of the network of corporate relations. They mediate between the demands of workers, unions, customers, stockholders, sup-pliers, distributors, the community, and government. This view of social responsibility is accurate as far as it goes. It does describe the manager's position. But it does not tell us anything about the source of the manager's ideas about how the various interests should be balanced. How, for example, does a manager decide whether a saving effected by an innovation in production technique should be passed on to the customer in the form of a better product or a lower price, to workers as a wage increase, or to stockholders?

The view that socially responsible managers are business statesmen has an answer to this question: The manager simply makes the decision that he thinks is best for the country as a whole. If he believes that inflation is our number one economic problem, he cuts the price of the product; if inadequate demand is the problem, he will raise the workers' wages; if capital is needed for automation, the savings will be ploughed back into the firm and will enhance the stockholders' equity. The difficulty with this approach, however, is that it places too great a burden on the manager. He must be a philosopher, a seer, an economist, and a social thinker if he is to perform effectively as a business statesman. But where can he get the experience and education necessary to be all of these things? Furthermore, by temperament most managers are activity oriented and unused to philosophical speculation.

The most satisfactory interpretation of social responsibility for analytical purposes is that of the manager fulfilling the expectations of his social role. From the sociological viewpoint, society is a social system made up of different statuses (e.g., farmer, manager, husband, son). Individuals occupy various statuses; a man may be a manager, Rotarian, Republican, Methodist, and so on. Associated with each status is a role, the ways of behaving expected of the occupant of the status. When a status occupant behaves as he is expected to, he is rewarded; when he does not, he is punished. He goes through a period of socialization to learn how to behave in accordance with his role. From this viewpoint all behaviour is socially responsible in the sense that it conforms to generally accepted norms. Therefore, the manager is by definition socially responsible as long as he does not deviate significantly from his role expectations. This means that if society wants the manager to maximize profits and so delineates his social role, the socially responsible thing to do is to maximize profits. That is what happened in the Age of Enterprise. But today profit maximization is no longer the sole expectation of the manager role. It is expected that the manager will conduct the affairs of the company in such a way as to accomplish a balance among a wide range of objectives.

This approach overcomes the limitations of the other four. It is based on the idea that man is a social animal rather than an economic man. He basically wants to do what is considered right by society. Even if he is selfish and hard-driving, he will attempt to attain his goals in socially prescribed ways (unless he is a criminal deviate). Therefore, this interpretation does not rely on the egoistic theory of motivation. Since man-agers are socialized in order to perform their roles effectively, they have some idea of what is expected of them, and they try to do what is right and not merely avoid doing what is wrong. The status of the manager corresponds to the position he has in the balancer-of-interests interpretation. The source of his ideas of how to balance the interests is his role. Since the role is limited to certain types of behaviour and defined in fairly concrete terms, the manager need not be a business statesman.

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