Corporate Social Responsibility and Ethical Dilemma in Business

Running Head: BUSINESS LAW
Business Law
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1BUSINESS LAW
Answer 1
An organization is a citizen of the society which has come into existence through the
operation of law. It is a separate legal person, although artificial which has been created by law
and has an identity distinguished from its owners. It has been argued by (Schwartz, 2017) that
all organizations being the citizens of the society has a responsibility to act in the best interest of
the society in the same way as any other natural person. This is because it has a duty of care
towards the society as the society can be directly injured by the actions of the organization.
Large organization operates at an extensive scale through the use of the resources provided by
the society. It is their duty to ensure that they provide adequate return for using such resources to
the society by taking care of its needs. Thus a part of the profit earned by the organization should
be directed towards the betterment of the society. The organizations must ensure that they work
ethically so that those associated with the organization will also incorporate ethical values into
their behavior which would directly ensure the dominance of ethics in the society as most of its
citizens are associated with the organization. On the other hand an argument has been provided
against the approach of CSR by Milton Friedman in his book “Capitalism and Freedom.
According to the arguments provided by Friedman the approach of CSR should not be adopted
by an organization in relation to its activities. This is because the organizations only have a
responsibility towards the shareholders who have made investment in it. It is the responsibility of
the organization to provide adequate profits to the people who had made investment in it.
Moreover as per Friedman it is the responsibility of those shareholders who are associated with
the organization to be responsible towards the society in which they reside (Tai & Chuang,
2014).
Answer 2

2BUSINESS LAW
(Carroll, 2015) defines Corporate Social Responsibility or CSR is as a self imposed
corporate regulation which has been added to business models of organizations. The principles
provided by CSR operate as a self-regulatory mechanism through which an organization keeps a
look upon and ensures compliance of law, national and international norms and ethical standards
actively. A few models provides that the CSR of an organization should not be merely restricted
to statutory and compliance requirements but also to actions which are for the social good of the
society and more than the interests of the organization. The choice of going beyond the statutory
and compliance requirements is upon the organization, however where the organization is
involved in some kind of nuisance such as an issue related to the environment it is the duty of the
organization to ensure that they indulge in social good for the society to compensate for their
actions. Thus the approach if CSR is applicable on all businesses which operate in the society
and specifically those whose actions considerably impact the society.
The approach of CSR can be further divided into two perspectives which are narrow view
and a broad view. The narrow view of CSR argues against the principles of organization
displaying CSR. It provides that the primary objective of the organization is only to maximize
their profit. On the other hand the broad view of CSR provides that the organization does not
only have the responsibility of maximizing profit but also towards the community and society
where they continue their operations in relation to compensating any potential negative impact of
their activity. It has been argued by (Poussenkova, et al., 2016) that the supporters in relation to
the narrow view of CSR have declined considerably in the recent years as the focus on CSR
related issues have considerably increased which are attracting the interest of various
stakeholders (Clapp & Rowlands, 2014).