Bonnie L. Perry
MGMT/498 Strategic Management
August 27, 2012
The Role of Ethics and Social Responsibility in Developing a Strategic Plan
Private corporations have a responsibility to society to do more than merely become a profitable organization. The strategic decisions of organizations are not made for the the benefit of the organization alone. Strategic decisions are also made to impact the community, consumers, and workforce of the corporation in a positive way. The strategic decisions made by a corporation are carefully made to reflect the mission and vision of the organization.
As quoted by Archie B. Carroll, “As religion and faith are being driven out of the public square, the Judeo-Christian ethical foundations that have sustained our country since its beginning, are being lost and are being replaced with a humanistic amorality, a self-centered, pragmatic indifference that will ensure that our moral compasses will fail to point us in the right direction in the future” (Carroll, 2011).
Friedman has been quoted arguing against the social responsibility concept. “A business person who acts “responsibly” by cutting the price of the firm’s product to prevent inflation, or by making expenditures to reduce pollution, or by hiring the hard-core unemployed, according to Friedman, is spending the shareholder’s money for a general social interest” (Wheelen & Hunger, 2010, p. 72).
Friedman’s belief is that even when the shareholder’s do not agree, the responsibility of a strong business person is to act from economic motives. Any other response will actually be harmful to society. He contends that a business is less efficient when the organization takes on the burden of social costs. Prices could go up to cover higher costs, activity investment, and postponed research. This reaction could have negative if not fatal effects on the long-term efficiency of the organization.
According to Wheelen & Hunger, Friedman refers to businesses social responsibility as a doctrine that is fundamentally subversive and states: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.2” (Wheelen & Hunger, 2010 p. 72).
General Mills is a good example of a company that exceeded ethical expectations for stakeholder agendas. The executives of General Mills were concerned that their organization was suffering the effects of the murder rate escalating in violent neighborhood surrounding the area five miles away from their company corporate headquarters. As stated by Wheelen and Hunger, “Working with law enforcement, politicians, community leaders, and residents, General Mills spent $2.5 million and donated thousands of employee hours to help clean up Hawthorne” (Wheelen & Hunger, 2010, p. 70). Crack houses were demolished so that elementary schools could be built. Dilapidated houses were rebuilt and there were grants awarded to people within the community to purchase homes. The direct effect of such a noble contribution to society was a reduction in homicides and robberies in the area.
There is however one negative aspect to that response to sociological issues. This was happening at a time when organizations were receiving pressure to reduce costs and outsource work to reduce expenses. Many organizations might have considered the best solution to the problem to be handled by government or...