Why is corporate responsibility important for a business?
The second point aiding the need for corporate responsibility is the belief that all businesses have an organised corporate internal decision structure, as well as the manifestation of a collection of beliefs and values that lay out what individuals deem right or wrong, named ‘organisational culture’. These values and beliefs that are instilled within the corporation are commonly believed to be the catalyst influencing the ethical decision making and behaviour of an individual.
To tie it all back, we can conclude that there is some level of moral responsibility that can be consigned to corporations, as well as being more liable than the individuals making up the organisation. This has already been integrated into the law of most developed countries, treating corporations as a ‘legal’ or ‘artificial’ person that has the responsibility to follow the law, but also seems to have a moral agency that outlines the acceptable behaviours within the corporation.
Taking a step back and looking at Friedman’s second point, questioning the belief that corporate managers need to take on social responsibilities beyond the duty to produce profits for shareholders. We would be compelled to discuss one of the most influential concepts to have come out of business ethics literature: Corporate Social Responsibility. A conceptual framework for CSR using systematic rationalisation began over half a century ago in the US. This was due to the increase in disposable income around that time. This made people emphasis other issues other than earning a living, therefore, revealing the limitations of capitalism in taking care of stakeholders.