Corporate Responsibility in Business Ethics

PHI325

Dr. Ward        

09-14-15

Corporate Responsibility

        Chapter eleven from the book Corporate Responsibility summarizes the evolution of corporate responsibly and its significance in the last decade. At the beginning of the 21st century, shocking events such as the attack of September 11th and the financial crisis of 2008 marked the way companies looked at themselves and made them re-considerate their duties towards others. Even though this was a decade characterized by irresponsibility, it brought positive changes to the business world. One can say that it was a process of awareness that changed the “social contract.” The social contract is based in the idea that all humans have essential rights. Going from the 19th century, with the development of industrialization which meant economic grown and better standards of living; to the arrival of the World War II which played a role in enforcing diverse workforce like women and immigrants; to the 80’s where companies started growing their concerns about globalization, environmental issues and social responsibilities; to the last decade where a new fourth dimension contract involving business, government, society and NGOs emerged, the social contract has continually changed.

        The new social contract focuses on the redefinition of corporate responsibility in the language of three-bottom-line thinking. This idea is based on the belief that global companies are responsible for not only for their economic value added, but also for their social and environmental impact. This includes environmental sustainability. This involves making decisions that are in the best interests of protecting the environment. Environmental sustainability is about making responsible decisions that will reduce your business' negative impact on the environment. Also, social entrepreneurships which have as mission to make social, cultural and environmental positive impacts. A good example given in the book is the company “Husk Power System” which creates electricity with rice husks (a waste product) in approximately seven villages in India. The success of this company is measured by its social impact and not by its financial achievement. The new social contract also includes corporate governance and compliance, which makes sure that businesses meet their purposes in a responsible way, and also manages their risks. Meeting a company's laws and regulations is crucial for an organization to succeed, and it is also important for the wellbeing of its employees and customers.