Corporate Responsibility Summary
What is corporation? Technically speaking, a corporation is what Peter Thayer Robbins author of “Greening the Corporation: Management Strategy and the Environmental Challenge” describes as a “social invention of the state” (Robbins: p.98) When, a state grants a corporate license, permitting private financial resources being used for public purposes. The advantage of having a corporation over being an individual investing in trade journey is that an individual’s debts could be present at birth by descendants.
The biggest turn of the corporations being “good” to being “bad” is when the Supreme Court ruled in 1886, that a private corporation is a natural person under the U.S. Constitution, and consequently has the same rights and protection extended to persons by the Bill of Rights, including the right to free speech. Furthermore, corporations were given the same “rights” to influence the government in their own interests as to individual citizens, and to use their wealth to dominate public opinions.
In the book, Capitalism and Freedom, the author argues that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits” even if that contradict with the social good. This theory is appealing for many companies; larger ones in particular are often involved in exploitative practices of some sort, sometimes through sub-contractors. With companies increasing financial influence, come increasing financial powers in the political arena and influence politicians in their favor. Corporate bodies can “donate” millions of dollars to political candidates, and that is legal entity? In some countries is called corruption, where here is called sponsorship. Corporations, as “persons,” are free to lobby legislatures, use the mass media and all that in the interest of free speech.
A common analysis is that advanced economies have often moved their “more dirty industries” to other parts of the world where there are less severe environmental and social standards. As a result, other countries may be polluting on their behalf. Now more and more corporations are turning “green”, which means are more environmentally cautions. Microsoft Corporation for example, are developing new software to reduce the energy consumption and reducing the need of business travel with the help of virtual meetings and safe document transfer.
All these factors are part of the so-called Corporate Social Responsibility. The Corporate Social Responsibility Initiative is an organization to Harvard Kennedy School, which seeks to study and enhance the effectiveness of corporate social responsibility. That organization defines the Corporate Social Responsibility strategically. “Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm”. (CSRI)Elenatoteva