An executive summary for managers and executive readers can be found at the end of this article
The ethicality of altruistic corporate social responsibility
Geoffrey P. Lantos
Professor of Business Administration, Stonehill College, North Easton, Massachusetts, USA Keywords Corporate governance, Ethics, Corporate strategy, Social responsibility Abstract This commentary questions commonly held assumptions about corporate social responsibility (CSR). It discusses the morality of altruistic CSR ± philanthropic CSR activities that are not necessarily beneficial to the firm's financial position. Evaluating altruistic CSR from all major ethical perspectives ± utilitarianism, rights, justice and care ± leads to the conclusion that, for publicly held corporations, such activity is immoral. This is because altruistic CSR violates shareholder property rights, unjustly seizing stockholder wealth, and it bestows benefits for the general welfare at the expense of those for whom the firm should care in close relationships. The paper also determines that what are often considered mandatory ethical and social corporate duties are actually optional activities that should only be undertaken when it appears that they can enhance the value of the firm, i.e. when they are used as strategic CSR. However, using ideas taken from secular and Judaeo-Christian authors on the meaning of work, the article also concludes that altruistic activities are appropriate and commendable for private firms and individuals. It offers suggestions for practitioners of CSR and for future academic research.
Corporate social responsibility
Introduction In a previous paper (Lantos, 2001) I reviewed and analyzed the literature on corporate social responsibility (CSR), concluding that, unless CSR is expected to yield dividends to the firm, it is not a legitimate endeavor for publicly held corporations. In this paper I shall first briefly summarize that paper as background for further analysis of the legitimacy of altruistic CSR activities. This time the inquiry will be from three major ethical perspectives ± teleological, deontological, and virtue theory, with deontological ethical theory (responsibilities, rights and justice) as my primary framework for analysis, but also drawing on the ethics of care. I will once again conclude that, for a publicly held company, altruistic CSR is immoral, because it breaches shareholder property rights, unfairly confiscating stockholder wealth, and it spends money for the general welfare at the possible expense of those for whom the firm should be caring, notably employees and customers. However, for a private firm and for managers using their own resources, altruistic endeavors are commendable and consistent with certain secular and Judaeo-Christian teaching on the meaning and purpose of work. I shall conclude with implications and recommendations for marketing managers in both public and private organizations. Background In the first article on CSR (Lantos, 2001), I reviewed Carroll's (1979, 2000) four-part definition of CSR, and related each part to one of three types of CSR that I conceptualized companies as practicing (see Table I for definitions of and comparisons between the types of CSR according to Carroll and Lantos). Carroll's economic responsibilities include being profitable for shareholders, while providing economic benefits to other
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JOURNAL OF CONSUMER MARKETING, VOL. 19 NO. 3 2002, pp. 205-230, # MCB UP LIMITED, 0736-3761, DOI 10.1108/07363760210426049
Archie Carroll (1979, 2000, 2001) classification
Lantos' (2001) corresponding classification
1. Economic responsibilities: be profitable 1. Ethical CSR: morally mandatory fulfillment of a firm's economic for shareholders, provide good jobs for responsibilities, legal responsibilities, employees, produce quality products for and ethical responsibilities. customers 2. Altruistic CSR: fulfillment of an 2. Legal responsibilities: comply with organization's philanthropic laws and play by rules of the game responsibilities, going beyond 3. Ethical responsibilities: conduct preventing possible harm (ethical business morally, doing what is right CSR) to helping alleviate public just and fair, and avoiding harm welfare deficiencies, regardless of 4. Philanthropic responsibilities: make whether or not this will benefit the voluntary contributions to society, business itself giving time and money to good works 3. Strategic CSR: fulfilling those philanthropic responsibilities which will benefit the firm through positive publicity and goodwill
Table I. Types of corporate social responsibility
corporate stakeholders, such as fair-paying jobs for employees and good quality, fairly-priced products for customers. Legal responsibilities involve conducting business legally. Ethical responsibilities go beyond the law by avoiding harm or social injury; respecting people's moral rights; and doing what is right, just, fair (Smith and Quelch, 1993) and caring. Philanthropic responsibilities entail ``giving back'' time and money in the form of voluntary financial giving and service. However, Friedman (1996) famously argued that a corporation's only social responsibility is its fiduciary duty to maximize shareholder wealth, while obeying the law and basic canons of ethics. Here, Friedman laid the groundwork for arguments against Carroll's (2000) philanthropic responsibilities. Three types of CSR Using this framework, I proposed that the confusion about the meaning and legitimacy of CSR could be clarified by suggesting three types of CSR: (1) ethical; (2) altruistic; and (3) strategic. Ethical CSR is morally mandatory and goes beyond fulfilling a firm's economic and legal obligations, to its ethical responsibilities to avoid harm or social injuries, even if the business might not appear to benefit from this. Hence, a corporation is morally responsible to any individuals or groups where it might inflict actual or potential injury from a particular course of action. Societal stakeholders Altruistic CSR is equivalent to Carroll's (2000) philanthropic responsibilities and involves contributing to the good of various societal stakeholders, even if this sacrifices part of the business's profitability. Firms practicing altruistic CSR help to alleviate various social ills within a community or society, such as lack of sufficient funding for educational institutions, inadequate moneys for the arts, chronic unemployment, urban blight, drug and alcohol problems, and illiteracy, among others. The justification lies in the fact that the modern corporation has been entrusted with massive economic and human resources and has the power to affect many parties beyond the participants in its transactions. Thus, there is an implicit corporate social contract between
JOURNAL OF CONSUMER MARKETING, VOL. 19 NO. 3 2002
consumers (through higher product prices). Shaw and Barry. 19 NO. however. I argued that altruistic CSR is not a legitimate corporate activity for many reasons:
. individual stockholders might not be particularly wealthy and could be counting on a profit stream for future private needs such as retirement and college savings (Trevino and Nelson. or contributes to the local community. since a business pays taxes in return for any benefits it receives. corporations contribute to their constituencies. 1999). imposing social costs like pollution. since they entail harm ± ethical CSR is mandatory.g. In fact. who are expected to be compassionate and share their good fortune with the less fortunate. 3 2002
. Strategic CSR is a growing marketing activity that benefits both
. Although champions of altruistic CSR suggest that business largesse (which they neglect to point out is at stockholders' expense) is preferred to government munificence at taxpayers' forced expense. Business organizations are not usually competent to effectively involve themselves in public welfare issues (Freeman. Unlike humans.
. 2001). in contrast with wealthy individuals. Getting agreement on which causes are ``socially responsible'' is impossible in a pluralistic society (Carroll. When volunteerism leads to higher employee morale and hence higher productivity.
The analogy between individuals being generous and organizations being munificent is misleading. and so stockholders might unwittingly support causes they do not advocate. making it easier to attract desirable employees. even with strategic CSR firms must be careful to avoid controversial causes such as the pro-life and gun control movements. who are multifaceted with diverse interests. such shortcomings are ethical issues. When government establishes good laws and polices. attracts customers to a ``caring'' corporation.
JOURNAL OF CONSUMER MARKETING. corporations are formed for limited economic purposes that include profit maximization for their owners but not promoting societal welfare. Summarizing points made by Friedman (1996) and others. since there is no involuntary taking of others' property. and/or workers (through lower pay).business and society. 1992). thereby fulfilling their fiduciary responsibilities to the stockholders. strategic CSR involves caring corporate community service activities that accomplish strategic business goals. Corporations need not ``give back'' to society. Strategic business goals On the other hand. as Adam Smith's ``invisible hand'' suggests (e.
. not only because it is a kind and generous thing to do but also because they believe it to be in their best financial interests to do so. is legitimate. there is a ``win-win'' situation that benefits both the firm and its constituencies. whereby firms agree to be good stewards of society's resources. For businesses to take on such duties is to involuntarily charge stockholders (through lower stock prices). producing socially undesirable goods). such problems by and large disappear. voluntary altruistic actions by private individuals or private charitable and social service organizations are a better option to both.
. Strategic CSR. 2001. While corporations do not always perfectly fulfill society's needs. Also.
19 NO. formulated by Mill (2000). VOL. considering whether behavior promotes ethical values and good character. Spurious altruistic responsibilities We shall see that expansive views on rights. suggesting that marketers should take a lead role in strategic CSR planning and implementation. altruistic CSR. justice and caring have resulted in spurious altruistic responsibilities being thrust on business organizations. is to further demonstrate the illegitimacy of altruistic CSR for corporations. though. if its results are bad or evil. and strategic CSR. utilitarianism). focusing on people's duties to uphold norms. the local community.companies and society. Thus. and (3) virtue-based. and wrong.
208 JOURNAL OF CONSUMER MARKETING. (2) deontological or duty-based. promotion of an ``ends justifies the means'' mentality. One objective is to further clarify the boundaries between ethical CSR. usually using principles of utility (e. According to the most popular teleological theory. using principles of rights and of justice. 3 2002
. The greatest problem with utilitarianism from the perspective of the ethicality of altruistic CSR is the tendency to let minorities suffer harm so that majorities (``the greatest number'') can enjoy benefits. logically. we should seek the greatest good for the greatest number among the company's various publics. and entails caring for stakeholders. Given all of the firm's many constituencies ± supply chain partners. the public at large. Ethical analysis This article will use ethical analysis to further explain why altruistic CSR is not proper for publicly held firms but is for privately owned businesses. Thus. morality should not be determined by consequences. most modern ethicists reject consequentialism as a foundation for ethical CSR. Ethical bases for social responsibilities preclude altruistic CSR There exist three basic moral theories which are useful for separating a company's mandatory moral responsibilities (ethical CSR) from its optional social responsibilities (strategic CSR or altruistic CSR). It will conclude with recommendations for use of strategic CSR as well as altruistic CSR by private firms and by managers as individuals. ethical analysis will show the reader that the parameters for social responsibilities are narrower than popular thinking claims. if its consequences are good. and the fact that. utilitarianism. since they are often due to outside factors beyond the control of the moral agent.g. giving guidance to practicing managers. Three mainstream ethical theories are: (1) teleological or consequences-based (consequentialism). and even the natural environment ± the stockholders and those with close relationships with the firm (notably employees and customers) will be outnumbered every time. Ethical problems include the difficulty of foreseeing long-term consequences and of measuring and quantifying outcomes. Teleological ethics Consequences-based philosophy judges morality based on the outcomes of actions ± behavior is ethically right. The primary purpose. However. ethical analysis will show the reader that the parameters for social responsibilities are narrower than popular thinking claims.
Deontology is the branch of moral philosophy that concentrates on duties or moral obligations ± it puts the ``responsibility'' in ``corporate social responsibility. Optional opportunities It will be shown that popular thinking regarding both of these theories is wrong. if it treats all stakeholders with the same respect and dignity a manager would expect or wish to receive from others. altruistic CSR). not means. who in turn have rights to make certain claims on the corporation. For instance. The two major deontological frameworks are: (1) the theory of rights. a company should treat its workers with dignity. 1996). 2000). rather than as a ``means'' toward greater corporate profits. not as means to an end (Rae and Wong. and Hume (2000) in ``A treatise of human nature''. with the result that business is said to have certain social and/or ethical obligations. such as customers insisting on reasonably priced. Since the latter is the focus in most contemporary ethics and social responsibility treatises. This is likewise true for marketing personnel's attitude and behavior toward their customers. Corporations have special moral obligations to their various stakeholders. such philosophers believe that the first duty of universals (applicable to everyone) is to treat others as ends. safe and effective products. 3 2002 209
. and (2) the theory of justice. 19 NO. in the case of private firms. Stakeholders have rights to be treated as ends. An executive action is morally responsible. and therefore it will be this paper's major focus. keeping promises. and workers expecting safe working conditions and fair pay for a fair day's work. in which he discussed the categorical imperative line of reasoning. concerned with individuals' moral rights and the duties/responsibilities of moral agents to respect and protect those rights. i. with respect and consideration. Ethical CSR mandates that corporations have responsibilities to help solve social problems they created or to prevent social harms they could potentially cause.
JOURNAL OF CONSUMER MARKETING. we shall concentrate on it. VOL. Consistent with the Golden Rule. and (3) rational criteria of moral reasoning. Deontological duties have three possible foundations: (1) religious mores. suppliers and distributors. then the action is (is not) ethical. Unlike teleology. deontology has great value for analyzing ethical CSR and altruistic CSR. as ``ends'' in themselves. Respect and consideration Determining duties by reason was advocated by philosophers such as Kant in his classic Critique of Pure Reason and ``Fundamental principles of the metaphysics of morals'' (Kant.'' If an action does (does not) fulfill one's duties. Corporations have duties such as being fair.Deontological ethics Overview of deontology. since its focus is on responsibilities.e. and abiding by terms of a contract. respecting professional secrets and confidences. when in fact what it really has is optional opportunities to practice strategic CSR (and/or. (2) natural law assumptions regarding the nature of humanity. fulfilling debts to others. dealing with fairness and equity in decision making.
notably superiors. which he viewed as part of his social responsibility to that society. Categorical duties are absolutely never to be violated. in violation of company policy (i. VOL. economic. 19 NO. personal ties become stronger and. This would have been true in the case of a manager who.
JOURNAL OF CONSUMER MARKETING.The nature of responsibilities If we understand the notion of responsibility. This suggests that broad ``social responsibility'' should often take a back seat to being responsible for the welfare of those with strong relationships with the organization. According to Ross (2000).e. consisting of exchange relationship partners (such as suppliers. where there is a conflict among duties. Or the briber might have duties to preserve himself for the sake of his family. However. made a payment to a South African official not to enforce the rules of apartheid. However. the ranking of duties depends on the situation. subordinates and other employees. meaning that there might be considerations that override the duties violated by bribery. Second is the microenvironment or operating environment ± the organization's immediate surroundings. and fourth are significant others of business decision makers. there is no absolute hierarchy of duties. plus competitors. 3 2002
No absolute hierarchy of duties
. also ethical and social duties. it would seem that one way to think about where the weakest vs the strongest duties exist is to envision stakeholders as existing at four levels. legal. when threatened to make a payment. and labor unions. if necessary. natural. technological. bribery is prima facie wrong. Another is the give-and-take between higher salaries and lower consumer prices. the local community and the financial community (stockholders. Third are stakeholders within the business organization. believing that responsibilities to best serve customers exceed duties not to harm animals. whereas consumer activists would demand that the business use all known effective measures for guaranteeing to consumers the effectiveness of its products. However. Conceptualized by English philosopher Ross (2000). when dealing with issues of CSR we confront multiple constituencies toward which we owe sometimes-conflicting responsibilities. First is the macroenvironment or general environment level ± broad environmental forces and institutions. including animal testing. political. Or. the theory of prima facie duties says that there are certain responsibilities that at first sight suggest that an overriding moral obligation is involved. Animal rights advocates might demand that a cosmetics company cease all testing on animals. friends and colleagues. bondholders and creditors). it would seem that obligations are prima facie (``on the surface'' or ``at first sight'') duties ± we rank in order duties owed to various parties and obey the stronger or more compelling when it conflicts with the weaker. For example. media and sociocultural systems and institutions. such as family. Or consider that a program to increase minority employment might reduce efficiency. we will better comprehend the nature of social responsibility. his or her duties to the company). therefore. society at large (the ``general public'') as well as business. distributors and consumers). As we move through these four levels. thereby lowering employee pay and/or raising consumer prices. such a program might be instituted at the expense of investing in pollution reduction. Deontologists distinguish categorical duties from prima facie duties. from broad and less immediate to the firm to narrow and parties with close ties to the company. such duties might need to yield to more compelling and conflicting obligations. Here. Conflict among duties The difficulty with prima facie duties lies in determining which responsibility has priority. The most fundamental disputed trade-off is between maximizing shareholder profits and achieving social responsibility goals.
e. health care and other community needs. take precedence over the rights of organizations and institutions. which exceed those in the broad external environment. only insofar as the rights derive from those of each individual member. But then that person does not have the same right as you. For example. because of the inherent worth and dignity of the individual. this is a legitimate claim to make on the manufacturer. To discern the traditional rights that good organizational citizens have a duty to respect. One way to know whether something is a claimed right is to ask if it is possible for all individuals to exercise the right simultaneously. we must distinguish between negative and positive rights (Hospers. if you claim the right to breathe fresh air. On the other hand. which would infringe on their property rights (Poirot. an education. in turn. which. Rights apply to groups such as community stakeholder groups. who might then receive lower pay. then one duty of those who manufacture goods is to insure that they do not cause the air to become unclean. 3 2002 211
. 19 NO. one must ask: ``At whose expense will this `right' be enforced and who has the duty to respect the right?'' (Hospers. we all have the right to offer to buy or sell labor services ± one person offering his or her labor services does not preclude another from offering theirs. 1996). If one individual exerting a right precludes someone else from exercising the same right at the same time. so long as they do not trespass against the liberty rights of others. your right creates a duty for him to undertake some positive action he might not want or be legitimately obligated to undertake. rights theory is duty-based ± each right has a correlative responsibility. because we cannot force others to provide for us. 1996). environmental protection. both business and government are charged with protecting rights for which perhaps they really are not responsible. workplace privacy.e.e. who might then pay higher prices. i. group rights. if you claim a right to a job. i. For instance. Most rights theorists believe that the rights of individuals. Rights theory duty-based Being deontological. recognized by all rights philosophers. 1996). i. then. 1996). such as workers. truth in advertising and product liability. there must be another person who has the duty to provide the job. pity or goodwill. Negative rights or liberty rights. To determine the legitimacy of a claimed right. and vigorously defended by Gewirth (2000). Since to do so might harm you.
JOURNAL OF CONSUMER MARKETING. This tends to argue against broad social responsibilities such as donating money to a community organization. because rights are not always fully understood. suggest that people should be free from restriction or control. unfortunately. It is standard practice to invoke rights in heated disputes about societal issues such as affirmative action. gratitude. none of which are rights. they have the right to be left alone. individual moral rights. VOL. But. such as in the case of racial affirmative action. it is not a right (Baird. rights of significant others are more compelling than those of people within the business organization. The same test can be applied to the right to food. are more important than those in the operating environment. are claim rights ± a person can claim that others have a duty toward him without appealing to kindness. if it is (as it usually is) at the expense of the interests of others closer to the firm. Four stakeholder groups In the hierarchy of four stakeholder groups to whom duties are owed. The same holds true for buying and selling legally produced and sold products. The rights of concern here. or consumers.Rights theory Ethical CSR is sometimes framed as a way to respect stakeholders' rights.
whereas not to regard positive rights entails indirect harm.g. who ignore consumers' right to be left alone and who distribute their personal information to other marketers without customers' consent. 3 2002
. That is. are sometimes said to have duties to provide for the general welfare. 19 NO.
JOURNAL OF CONSUMER MARKETING. Of special relevance to this discussion is that stockholders' property rights are dishonored by altruistic CSR activities. making claims on others that interfere with their liberty rights. religious worship. then we have made one subset of the population (e. to expend resources to help others is to respect the second basic category of rights ± positive rights or welfare rights ± rights to whatever is necessary to satisfy basic needs. they should not be put in the category of ``ethical responsibilities. results in higher consumer prices. However. since it comes at the stockholders' expense. not obligatory. shareholders) subservient to another. Other individuals. altruistic CSR is not appropriate. Thus. Especially business and government organizations. it is not immoral to neglect them. to refrain from doing so is not ethically irresponsible. happiness and general wellbeing. If people are entitled to having all their needs met. and/or lowers employee compensation. We do not have positive rights. association. Liberty rights more important Most non-utilitarian philosophers believe that liberty rights are more important than welfare rights ± they see us as having a much stronger obligation to refrain from interfering with people's freedoms than to promote their happiness or wellbeing. even if the cost for both is the same. a manufacturing company's obligation not to violate OSHA regulations and thereby endanger the safety of its employees is stronger than its obligation to open day-care facilities for workers' children. job discrimination violates an employee's right to be treated as a free person equal to everyone else. 1996). press. Thus. Hence. because we are not owed involuntary servitude from our fellow citizens. and freedoms such as speech. VOL. even if expanding the program would bring more total good and cost less. consent. although strategic CSR is laudable. energy and other resources to assist others. Ever-expanding ``rights'' Many of today's ever-expanding ``rights'' are not legitimate rights. money. Welfare rights always come at someone else's (often-coerced) expense. Wrong to breach negative rights For corporations to breach negative rights is clearly wrong. such as health. since not to respect negative rights invokes direct harm (a sin of commission). since it enhances the bottom line and thereby financially benefits the owners of those funds and can help keep prices down and pay levels up. Basic liberty rights include privacy. Likewise. For instance. censorship or religious coercion. Or consumers' privacy rights are sometimes violated by direct marketers. Liberty rights do not require moral agents to invest time. groups or society are sometimes said to have the positive duty to provide for welfare rights. private property. charitable acts related to promoting welfare rights are supererogatory (non-essential). conscience. at best (a sin of omission). for a company to violate people's rights by despoiling the environment through discharging pollutants would be morally worse than for it to decide not to expand a new job training program in the inner city. While these actions would be commendable.'' For instance. and no confiscatory taxation.The moral agent's duty is simply to refrain from harming or interfering with another person's intended course in life (plus honoring their agreements with others) (Lippke. as the two most powerful and wealthy institutions.
(2) to be informed. where ``a person is moved by the suffering or distress of another. that does not mean turning the task over to corporations. and disgruntled customers can take their business elsewhere. VOL. 3 2002 213
. 2000). and by the desire to relieve it'' (Olasky. at least among shareholders who are not ``socially responsible'' investors. who do not wish to have their money used for such purposes. True compassion requires the voluntary use of one's own time and money (Ahlseen. On the other hand. it argues that marketers have a duty to tell the truth in marketing communications. dissatisfied workers have the right to seek employment elsewhere. A sense of coercion While businesses' voluntary helping to meet some community needs is perhaps more desirable than forcing fellow citizens to fund such activities through taxes. One might argue that these welfare rights need not be serviced by business ± after all. However. for such provision for the community's positive rights violates the property rights of stockholders. to be in a minority without a disadvantage (i. For example. we cannot assume that shareholder property rights always outweigh all other negative rights. 1996). in the absence of clear notification in prospectuses and other public corporate documents. many claim that a business owes its employees a right to a certain quality of life and must pay a ``living wage. Kennedy's ``Consumers' Bill of Rights. However. Compassion should happen at a personal level. Here again we get into the problem of making trade-offs among the rights of various stakeholder groups.'' Or consider that some argue for the right of inner-city dwellers to be efficiently served by retailers. But this view of rights also argues against using corporate profits to engage in benevolent community service such as beautifying town parks and contributing to homeless shelters.e. whereas providing dangerous products and fouling the environment entail harm which impinges on negative rights. In 1962 President Kennedy enumerated four basic consumer rights: (1) to safety. While it might be nice for consumers to have all of these. this understanding of positive vs negative individual rights provides support for ethical CSR but not for altruistic CSR. markets are less than perfectly competitive. ``Consumers' Bill of Rights'' Of special interest to marketers are John F. And even the latter are usually more interested in issues of ethics than in providing donated community services. (3) to choose. In conclusion.'' most of which are positive rights. all but the right to safe products and to a safe environment are welfare rights that companies are not obliged to provide. there is. Welfare rights Another problem with welfare rights is that where we draw the line is never clear. a sense of coercion here. we should help those who are less fortunate. and (4) to be heard. To them was added by Presidents Nixon and Ford the right to a clean environment.
JOURNAL OF CONSUMER MARKETING. in free and competitive markets. who nonetheless shy away because of high crime rates in urban areas. without losing one's rights) and to consumer education. For example.As individuals. and so these options are not always readily available. 19 NO. so as not to harm consumers by violating their negative rights not to be deceived.
VOL. might suffer from inadequate information. when one person's interests are stronger or more compelling than another person's interests. shareholders' money is surplus property. etc. However. Thus. socioeconomic security and meaningful participation in economic life for some families. justice theory is duty-based (deontological). and those with a greater (lesser) claim should receive more (less). many who advocate for various rights offer little guidance as to how they are to be prioritized (Lippke. This necessitates examining the relative importance of the interests that each right protects. Such consideration should yield results similar to those of the discussion of prima facie duties above. Altruistic CSR suggests that corporations should make up for at least some of the shortcomings of our capitalist system. some argue for the need for a government welfare system. creating a ``social injustice''. expansive views of a company's social responsibility. Prioritizing rights To solve the conflict between two or more negative rights we must undertake the admittedly difficult task of prioritizing rights. It also sometimes does not adequately provide for public goods. are prima facie ± one can override another in special cases. Any denial of something to which someone has a right or claim is an injustice. over and above what they need to survive or even live reasonably comfortably (Lippke. ``Social injustice'' Capitalism provides equality of opportunity but not necessarily equality of results. Notice how the theory of justice relates to rights theory in that a right is something to which you have a just claim (a claim right). Free enterprise does not necessarily satisfy the needs of any particular individual or group. in the areas of medications or for certain segments such as the urban poor). medical care. such as customers and employees. being correlative with duties. handicapped. Hence. 1996). However. Distributive justice Relevant to our discussion is distributive justice or social justice ± the fair distribution of society's benefits and burdens. Justice is concerned with fairness ± a person has been given just treatment. not being able to voice their opinions. and/or big business is expected to help rectify the ``injustices'' of the system through
214 JOURNAL OF CONSUMER MARKETING.Unfortunately. like parks and schools. i. untrained). it fails to provide adequate housing. when she has been given what she deserves or can legitimately claim. ill. Recall that capitalism is based on the principle of equity or exchange justice: each person receives society's benefits according to contributions made to society through productive work. including the disadvantaged (e. this means that some people get left behind. 3 2002
. education. limited choices (e. 1996). i. some people rely on such money for purposes such as retirement or college education funding.g. What one party might deserve another party has a responsibility to provide. 19 NO. Critics might suggest that. The only standard of fairness in free-market economics is on what a willing buyer and seller agree.e. Unfortunately. And others who might have to ``pay'' for altruistic CSR. the reasons for overriding an individual's right must be very strong ± to supersede a right for less-than-overwhelming reasons belittles the value of persons and their dignity. then the latter's rights can be justifiably overridden by the former's rights. Justice theory In justice theory there are also some misguided.e. The fundamental principle is that those with an equal claim to resources should receive equally.g. in some cases. The general rule is: since rights protect interests. Rights. an admittedly subjective process that will not always lead to agreement.
Good people ± people of character ± can be either conservative or liberal. For instance. Socialistic ideology Relying on business to be a welfare provider is socialistic.
JOURNAL OF CONSUMER MARKETING. might hinder productivity. euthanasia and homosexuality). 3 2002 215
. Virtues-based ethics and the ethics of care Virtue ethics discusses a person's character ± the individual's unique bundle of virtues ± that encompasses elements of moral excellence. but a deficiency of truthfulness can be deception. where there are conflicting duties to various stakeholder groups. And corporate largesse comes at the shareholders' involuntary expense. such as affirmative action policies and hiring the hard-core unemployed. However. product quality. thereby decreasing the benefits that can be distributed to other corporate stakeholders such as employees and consumers.altruistic CSR. an injustice to those who put their capital at risk. For instance. a company that refuses to close a failing plant or lay off redundant workers and therefore goes bankrupt is not being very socially responsible. especially if these groups are less productive. which says that societies should be thought of as communities in which benefits and burdens are distributed on the model of a family ± just as family members willingly support the family. some forms of CSR. So it is in dealing with stakeholders: if you deal with one stakeholder group in an imbalanced way. Honesty is a virtue but a certain amount of concealment or bluffing is acceptable in negotiations. Also. government hand-outs often reward irresponsibility and allow politicians to be ``compassionate'' with involuntarily confiscated taxpayers' money. VOL. proponents of CSR should eschew support of such controversial social causes. as will be further discussed in the ethics of care below. Aristotle defined virtue as the mean or an optimal balance between two extremes that one should seek. Aristotle suggested relying on prudence ± the virtue that enables one to know what is reasonable in a given situation. an excess of truthfulness can be boastfulness. 19 NO. Plato in The Republic (2000). Virtue theory can help corporations to make difficult choices. However. One way to conceptualize the balancing act is in terms of Aristotle's ethic of the mean. 1996). To determine what is a reasonable balance. death penalty. Confucius in The Analects (2000) and Aristotle in The Nicomachean Ethics (2000) all advocated virtue ethics.g. which is often given to special interest groups in exchange for their support. yet all of these groups can include people of integrity. you do so at the expense of other stakeholders (Singer. based on the principle: ``From each according to his ability. Controversial social issues However. community members (including businesses) should support the community (Rivoli. abortion. 2000).'' Socialistic ideology underlies the communitarian or family model. people of good character will not all come down on the same side of difficult political and social issues (e. to each according to his need. the family model does not generalize to the community or society. and so on. Evangelical Christians and devout Catholics tend to disagree with environmentalists or animal rights activists on the primacy that should be given to the natural environment or animals as stakeholders over people. since the relationships between people are not as deep. Thus. Virtue is not about being perfect but rather about achieving balance. For instance. rightness and goodness. A person of good character upholds high moral values.
19 NO. neighbors and co-workers (Thomas. often happens in bureaucratic service institutions such as the post office or a social welfare office. Vigorous virtues include courage. instead. because it is uncaring in that it fosters dependency. but not necessarily good friends. One can also become busy taking care of people in a manner that looks after their needs but remains objective and distant from them. Thus. it has been argued that the welfare system is immoral. friends. customers and supply chain members) should be set aside when determining what one ought to do (Velasquez. Two Cultures. compassion. whereas the ethics of care would not. These heroic virtues transcend family and community. relatives. For instance. rights and justice in situations involving close relationships (Velasquez. since an obligation toward one's own particular workers. but nurtures the development of the person. also is not the kind of caring demanded by an ethic of care. who are to a large extent dependent on the company and whom one personally knows. everyone's interests are considered equally worthy. 1998). should override any obligations toward strangers in the Third World. Caring after people in this way. which ``give a hand-out instead of a hand'' or ``give a man a fish rather than teaching him to fish'' represent.Another way to achieve balance among stakeholder groups and to understand the proper hierarchy of duties is to rely on the fairly recent branch of feminist ethics that became popular in the 1990s known as the ethics of care. Standards of caring should be given greater weight than the impartial standards of utility. The same argument could be made for those forms of altruistic CSR. particularly relations of dependency.g. while often necessary. and especially marketing. 1998). then. any special relationships that one may have with particular individuals (e. According to Himmelfarb (1999) in her book One Nation. trustworthiness. an ethics of care perspective should help businesspeople to understand the priorities of their various social duties. Since business activity.e. to attend to and respond to the good of particular concrete persons or groups with whom we are in a valuable and close relationship. The paradigm example is a mother and her child. so one becomes capable of making one's own choices. and they characterize great leaders. This view. a particular altruistic CSR action might positively impact many Third World citizens. These are relationship-oriented virtues that make daily life more pleasant with our families. It does not seek to foster dependence. there are two types of virtue: vigorous virtues and caring virtues. that we have an obligation to exercise special care toward those particular persons with whom we have valuable close relationships. 3 2002
. Such caring is focused on people and their wellbeing. Ethic of care An ethic of care is based on the claim that the identity of the self ± who one is ± is based on the caring relationships the self has with others. since so many people are helped. ambition and creativity. fairness and decency. consists so much of roles and relationships in which such concepts as loyalty and trust figure prominently. while negatively affecting a firm's few employees. Utilitarianism would applaud such an action. is a key concept in an ethic of care. but. The moral task. The strongest corporate obligations grow out of special relationships into which companies
216 JOURNAL OF CONSUMER MARKETING. The caring virtues include respect. is not to follow universal and impartial moral principles. employees. Ethics should be impartial A problem with the traditional teleological and deontological approaches to ethics is that both assume that ethics should be impartial. as. i. It is the caring virtues that are of concern to the ethics of care theory. VOL. for example. friends. 2001). Consequently.
The ethic of care would not. 19 NO. Inc. Unjust favoritism Practitioners of the ethics of care in the CSR context must be careful to avoid the criticisms of this approach (Velasquez. but also in some cases customers and supply chain partners. most notably its employees. which limits the salaries of top executives relative to the rank and file. The communitarian framework of social thinkers like Etzioni (1993) and Rivoli (1996) views corporations as being part and parcel of the communities and social networks that created them. Second. VOL. communitarian ethic advocates argue that concrete communities and communal relationships have a fundamental value that should be preserved and nurtured. 2000). if a longtime. Thus. Ben & Jerry's Homemade. nonetheless the ethics of care would seem to argue for the appropriateness of altruistic CSR on an occasional or special basis (Brenkert. Means include a sales ratio. But to give resources to the broader community would not seem appropriate.. For example. 1996). this would not seem unreasonable. Part of the firm's mission is to find creative ways to improve the quality of life for their workers as well as for the local community. Ben & Jerry's also donates funds to what the owners believe are worthy causes. developed the concept of ``caring capitalism'' and put it into action. they must be careful that it does not degenerate into unjust favoritism (e. and buyer from vendors. if a financially struggling distributor needs an extra ten days to pay the bill. free health-club memberships. Or. supplier to retailers. giving one consumer ``preferred customer'' treatment at another buyer's expense). seem to give primacy to these shareholder rights. and providing employee amenities such as three pints of ice-cream a week. as well as members of the microenvironment closest to the firm. First. Conclusion on the ethics of altruistic CSR for corporations Figure 1 provides a summary of how to evaluate any given proposal for a CSR program from the various ethical perspectives. since managers rarely have close relationships with all but the biggest stockholders. then. the corporation would probably not be cheating its stockholders by loaning or perhaps even giving the money to the worker in return for her years of service. where it is applied to those for whom the organization significantly cares. Larger system of relationships Some say that the ethic of care should also encompass the larger system of relationships that make up communities. For example. limiting growth to preserve the firm's family atmosphere. productive employee is facing emergency medical expenses that he or she cannot afford. and use of a partially subsidized corporate day care center (Ferrell et al. 1999). The conclusion is that altruistic CSR is unethical when scrutinized using all mainstream ethical theories:
JOURNAL OF CONSUMER MARKETING. The new business paradigm is ``interconnectedness'' ± organizations are considered as vital components of ``an interconnected world community and ecosystem'' (Trevino and Nelson. however. customers or strategic partners) or out of significant roles they play. 1998). managers should watch for employee ``burn-out'' from adding caring responsibilities to their other duties (employees need to be cared for too). Although we have seen that it is difficult to generalize the family model to business and societal relationships. the ethics of care would argue for taking care of significant others and those within the business organization. In terms of the four levels of shareholders. such as employer of people.enter with their various constituencies (such as long-term relationships with employees. since it must come either out of the hides of these closer stakeholders or from the shareholders. 3 2002 217
Helping them will also most likely benefit the firm. The significance of liberty or negative rights. and the spuriousness of welfare or positive rights. The primacy of individual rights over group rights also argues against social responsibilities toward world-wide and even community causes at the expense of those closest to the firm. If altruistic CSR is to be practiced at all. suggests that altruistic CSR sacrifices stockholders' legitimate property rights on the altar of questionable societal welfare rights.
. Flowchart for ethical evaluation of CSR proposals
. so must rights be prioritized according to the extent to which stakeholder groups are close to the firm and have legitimate claims on it. and sometimes other stakeholders. The concept of prima facie duties and the ethics of care framework both suggest that organizations have stronger responsibilities to those closest to them. VOL. resulting in a socialistic spending of shareholders' funds. an immoral theory. 3 2002
. it should be among these groups.
Utilitarianism. notably employees. will lead to stockholder. It also suggests that individual shareholders' property rights should not be forfeited for community needs. unless they are causes that are near and dear to the hearts of the firm's closest stakeholders. charitable foundations. turning altruistic CSR into strategic CSR. 19 NO.
. such as its workers and customers. no matter how pressing. and consumer interests being outweighed by those of all other stakeholders for the ``greater good'' of society. employee. supply chain partners and major stockholders. Distant relief organizations. As with duties.
JOURNAL OF CONSUMER MARKETING.
. such as customers. and such are lower in the pecking order of concerns.Figure 1.
``Why am I pursuing a career in business?'' After all. which leaves some individuals and groups marginalized.
. Even here. The owners of an unincorporated business are accountable only to one another regarding use of their earnings. and to assist those in the corporate world to gain perspective on their work and the good deeds they can do in their private lives. the use of company profits for community needs is a perfectly legitimate and commendable choice. customers and others with valued relationships with the business. because it emphasizes self-interest. unless these groups are willing to sacrifice for the cause. Profit rewards hard work and innovation.
Altruistic activities for privately held firms and managers as private individuals All of this is not to say that business is only about stockholders making money. so as to minimize harm to the firm's image and not have stockholders unknowingly fund activities that go against their own values. The top-of-mind answer to our question is: ``The purpose of business is to make money.'' However. the profit motive is sometimes viewed as less than virtuous. To give business such a duty is based on socialistic thinking that the family model of providing for its members generalizes to the community or society at large. self-interest is not the same as selfishness. let us now examine what has been written on the meaning and purpose of business by both secular and religious authors. or to lower employee pay or raise consumer prices. consistent with the ranking of duties and rights owed to various corporate constituencies. Virtue theory and its subset. 3 2002
. prior to making a career choice one asks.
. which are earned at their risk. Strategic CSR is moral and commendable. the ethics of care. which emphasizes one's own interests at others' expense. The purpose of business Ideally. providing employment and serving customers. Shareholders remain free to donate a portion of their capital to good works of their choosing. Nevertheless. the heavy personal commitments of time and energy demanded by our involvement in our work lives can clash with our responsibilities to our families. also suggest that responsibilities are owed first to those stakeholders closest to the company. incentives that most
A career in business
JOURNAL OF CONSUMER MARKETING. controversial causes should be avoided. However.
Justice theory argues against altruistic CSR. 1990). Inc. even where no financial benefits are expected to accrue to the business. And. because it benefits stockholders while helping other stakeholders. community welfare should not be provided at the stockholders' unrequested expense and to the detriment of employees. for private firms. and so they can frame the mission and goals of their organization to include societal as well as financial performance dimensions as long as consumers and employees are informed. And there is always the risk that rival companies fail and their employees lose their jobs (Johnson. Individual businesses do not have the responsibility to make up for the deficiencies of capitalism. however. Self-interest is simply a concern for financial reward and is necessary if society is to be maximally productive and efficiently allocate its resources. VOL. friends. 19 NO. because no duty is owed to shareholders. as does Newman's Own.. To help private businesspeople to make such decisions. because it is unfair to take away stockholders' earnings. communities and personal development.
p. via both products sold and the philanthropy practiced. and ``build community'' (Novak. Successful business leaders As individuals. about striving to meet some great need or performing some great deed. if one views it not just as a job. who in various ways are endeavoring to satisfy their basic needs and who form a particular group at the service of the whole of society. other human and moral factors must also be considered. Although they have been maligned as ``robber barons. Thus. but it is not the only one. Pope John Paul II took the societal perspective in the 1991 encyclical Centesimus Annus:
The purpose of a business is not simply to make a profit. not just for oneself or even for one's employer. with his emphasis added). and careful use of scarce resources. 19 NO. position or career.
Note here the relevance of the community model to the walls of a business organization. VOL. Frick. concert-halls and more. Mellon and Rockefeller contributed to society in ways from which we still benefit ± colleges. all of which are selfish. courtesy of the new wealth which business generates. 36-7). Profit is a regulator of the life of a business. long-term.or publicly-held firm. pp.people need. Examples would include marketing's focus on customer satisfaction and establishing long-term customer relationships. ethical relationships with competitors. business can also be about values and virtue. meaningful and important to others. museums. which in the long term are at least equally important for the life of a business (quoted in Novak. Indicators of effectiveness and efficiency CSR advocates would also suggest that the purpose of business is ``significant societal service'' or ``constructive cultural contribution'' (Sikula. and creating wealth. 1996). ``Service/contribution'' means that all individuals and institutions should have a mission of serving not themselves but others (Sikula. Business people sometimes see their ventures as a way of giving back to society. work is much more meaningful and satisfying. because otherwise it is irrational to save and invest rather than to consume. there are many indicators of an enterprise's effectiveness and efficiency beyond short-term profitability. providing goods and services for consumers and jobs for employees. The purpose of business can thus be viewed as to ``do something which is of value''. suppliers and dealers. even posthumous in influence. but also for others (SimonBusiness. 1996. 1996. a calling says that your work has intrinsic meaning in itself. While business is about productivity and creativity. when private individuals see a local community characterized by
220 JOURNAL OF CONSUMER MARKETING. 2000). but is to be found in its very existence as a community of persons. successful business leaders have always felt a need to ``give back'' to society.'' the likes of Carnegie. 3 2002
. For example. because it makes a contribution to the community or society (Bellah et al. Whether one works for a private. ``accomplish something collectively''.. ``Significant/constructive'' suggests that business behavior can make a difference and be significant. again suggesting that caring for close stakeholders should be a priority. Business and professional life brings with it opportunities to use personal influence and wealth as a force for positive moral and societal good (Johnson. 121). Whereas the concept of a ``career'' focuses on external rewards and measurements of success such as promotion. but rather as a calling. prestige and social recognition. employee satisfaction and fulfillment. 1990). ``Societal/cultural'' means lasting. 1996). 1996. among many others.
making Him senior partner. In fact. insights for conducting business in a socially responsible manner can be gained from religious principles. 33) observes:
Who among us has not encountered those persons who are devoid of any identity or meaning to their lives. As Campola (1992. The stewardship principle is a biblical doctrine that requires businesses and wealthy individuals to see themselves as stewards or caretakers. although it does not become the all-consuming portion of one's life. etc. p. gave people dominion over the earth. but also of society's economic resources. 1989. The individual of good character recognizes that he or she plays other roles in life ± son or daughter. Because work is intrinsically good when done with the proper attitude and motive. Their self-identity is not exclusively bound up in their work. 3 2002
. even at the expense of their organization's monetary success. God ordered people to work. A person of character values who they are above what they do. simply because they cannot figure out any good reason for living. in fact. religion is largely viewed as irrelevant and possibly inappropriate as part of the work environment. holding their property in trust for the benefit of society as a whole.
JOURNAL OF CONSUMER MARKETING. 1990). particularly men. with cited supporting verses including Genesis 1:28. 2001). VOL. fulfillment comes from being a person with character and having a clear sense of purpose and meaning in one's job. friend.
The belief that God created us to be servants and stewards over His creation can give us a radically different view of business. Exodus 20:9). there has been a trend to bring spirituality into the workplace (Gunther. Colson and Eckerd (1991.'' and believe that they can do something to remedy the situation by employing the hard-core unemployable.
A faith-based perspective on CSR for privately held firms In many cultures. ± and reveals his or her character in how these roles are all played. they should be encouraged to do so. participating in the work of creation in a way that glorifies God. The Judaeo-Christian world-view regards business as part of God's work in the world and a major part of how we conform with God's will (Johnson. Thus. Believers can associate going into business with fulfilling God's will for them. However.``haves'' and ``have nots. for someone who adopts a calling orientation toward work. and 3:17-19. Because we are commanded to exercise stewardship over the earth. p. since it is the religious perspective upon which our nation was founded and still holds great influence in society today. the job is considered inherently valuable and motivating. 178) give a concise and complete faith-based perspective on the purpose of work:
Because work gives expression to our creative gifts and thus fulfills our need for meaning and purpose. and entrusted stewardship of His creation to humans (The Word on Management. Recently. deliberate efforts can be found to exclude religious tenets from business decisions. 19 NO. Thus. Virtue ethics Getting back to virtue ethics. because all they were was synonymous with their jobs? So many. die very shortly after retirement. 2:5. husband or wife.15. The Judaeo-Christian tradition will be used as an example here. father or mother. not just of shareholders' financial resources. a calling should also be viewed in light of one's character ± the kind of person one has become or would like to be.
they must also accept servanthood and stewardship. Happiness is a condition of the soul that comes from self-denial. Thus. most of us have been taught at some point that we are not put on earth to be alone.
This relates to the larger question: ``What is the purpose of life? '' Aquinas answered this question in ``Summa contra gentiles'' (Aquinas. On a personal level. 1990). 1993). The moral manager performs a service for his or her employees and company as well as for society in general. giving oneself to others. and that each of us should use our talents to the fullest extent. then they are justifiable. Judaeo-Christian teaching says that the purpose of life is not so much happiness but rather to live in God's will and please Him by serving others and doing our work ethically. Those of us in positions of leadership in business or in academia have wonderful opportunities to help others realize the wholeness of their own lives. This means that. VOL.g. including the ethical and social responsibility dimensions of their jobs. (2) Ethical duties of firms do not entail providing for stakeholders' welfare rights or making up for the injustices of the free enterprise system. not necessarily to be successful. which should only be undertaken when they are expected to enhance the firm's value. even if we are not ``successful'' by the world's standards or traditional measures of business performance. and whether or not its products really make life better for those who use them. it appears that few firms do so (Smith and Quelch. This.g. we can still get meaning from our work. viewing business duties as helping to make a contribution to society. When socially responsible practices can be demonstrated to yield benefits to the firm (e. no matter how noble it seems. as God defines success. etc. is part of our calling (Johnson. This leads to success in business and in life. enhanced employee morale or more loyal customers) commensurate with their costs. Thus. former CEO of Quaker Oats. as they are consistent with the firm's primary role as an economic institution. for people to embrace community service-contribution. it is not enough to look at the bottom line of the financial statement to determine how well a company is doing. we should measure success in terms of how we serve others with whom we have personal contact (e.Because we are citizens of this earth and have certain responsibilities to our fellow citizens. but rather to live in communities. To live in communities In short. how well we care for our families. Suggestions for managers and researchers Managerial implications The discussion above suggests the following: (1) Ethical publicly held corporations should not practice altruistic CSR. 19 NO. In fact. We must go beyond the bottom line and also look at such factors as how the firm treats its employees. how well we relate to others. As Mother Theresa reportedly said. God calls us to be faithful to His call. Kenneth Mason. These are optional philanthropic ``responsibilities''. 3 2002
.). whether or not it uses its resources in an environmentally sound way. 2000) by arguing that God is the end of all things and that to know God is the end of every intelligent substance. distinguished corporate responsibility from corporate philanthropy when he wrote:
222 JOURNAL OF CONSUMER MARKETING. Community-service contribution Non-religious individuals can also agree that moral managers should act as stewards or trustees for both their firm and other stakeholders. too. and constantly doing what is right.
when. For marketers. where philanthropic giving to societal and community needs is tied to organizational objectives and strategy. 226). we cannot help but help ourselves'' (Ferrell et al. 2000. The definition of corporate responsibility I would like to suggest is this: corporations that control the use of socially important assets have the responsibility to use those assets in a way that makes social sense (Laczniak and Murphy. ``What a strange thing we're discovering. Their mission statement includes this telling sentence: ``As we help others.. employees and customers to pay for such benevolence. nor sending a shipload of food to help the hungry in third world countries. Cohen noted. p. p. 2001). John D. To do so will win the approval of God and people and create that ``warm glow'' from helping others.
Marketers. As our business supports the community. Strategic CSR activity should improve corporate image and increase motivation and loyalty. Ben Greenfield and Jerry Cohen. history is not kind to those who get rich. special treatment of long-time employees. which has become very successful. (5) As the business function most closely related to satisfying and communicating with most of the organization's constituencies. A classic example here is Ben & Jerry's Homemade. primarily among employees and customers. who have enabled it to prosper in the past. museum. loyal customers and partnering retailers). for instance. (4) Private firms and individuals are encouraged to follow the example of the great industrialists like Carnegie and Rockefeller. the community and the world at large. he was characterized as an evil Titan (Jones. . VOL. (3) A firm should exhibit a certain level of corporate care for constituencies closest to it (e.It is useful to begin by identifying what corporate responsibility is not. Giving generously to the Crusade of Mercy is not an act of corporate responsibility. Unfortunately. incorporated into their business a strong sense of social responsibility to their employees. the greatest benefit to the firm of such activities lies in their marketing communications value and accrued goodwill among publics. yes. because they have sinfully delicious icecream. For instance. or symphony orchestra. . In fact. which increasingly expects businesses to undertake community service projects.. p. 3 2002 223
JOURNAL OF CONSUMER MARKETING.. 1993. prior to turning to philanthropy. through communications of trade associations and industry groups. 19 NO. Inc. but also among other key constituencies such as suppliers of marketing services and retailers. on the fact that it is unfair to expect stockholders. such decisions are often made by other areas in the organization which lack a marketing perspective. Other high-profile examples of companies that successfully distinguished themselves in the marketplace via strategic CSR include the Body Shop and Tom's of Maine. the community supports us back'' (Ferrell et al. These are acts of corporate philanthropy . Ben & Jerry's work to obtain publicity regarding how they treat their employees and the ways they get involved in the local community. then do little else. but also because from the beginning its founders. have a duty to educate a public. 277). who did ``give back'' to society some of their good fortune. marketing should take a leadership role in responsibility for strategic CSR. 278). rather than purchasing advertising time and space. justifiable as a sort of quid pro quo before the stockholders in annual reports and other corporate communications. Rockefeller found out. 2000. nor is providing financial support to one's local hospital.
companies like Kroger. a very popular social cause is now education. employee time and equipment to help improve schools. Such giving should be linked to business goals. Thus. For example. and helping the disadvantaged (Ferrell et al. Thus. or the homeless. ``In kind'' gifts or services are a great way to get product publicity and show-case products. the nation's largest charitable hunger relief organization. the arts (museums.There are several forms that strategic CSR activities overseen by marketers can take:
. LensCrafters made a promise in the mid-1990s to provide free vision care to one million needy people by the year 2003 (Drumwright and Murphy. symphony orchestras. For instance. most of which was directed to hospital-related causes (Drumwright and Murphy. Another area of education. Realizing that tomorrow's quality workforce requires a solid education today. the chemically dependent. 2000. VOL. Johnson and Johnson gave away $52 million in cash and $70 million in products in 1997. and the like). p. Dayton Hudson Corporation donates 5 percent of its pre-tax profits to charities and social causes. Minute Maid Company also found a natural connection by donating its juice products to Second Harvest. Days Inns of America hires homeless people as reservations sales agents and permits them to lodge in the chain's hotel rooms until they can afford to provide their own housing. and Eastman Kodak. a few years ago Intel contributed $96 million to target science. such as those with mental or physical disabilities. 2001). 3 2002
Philanthropic giving. among many others. civic centers. the environment. that such efforts be as targeted as possible. and the gifts and services provided can be viewed as a type of investment. It is advised. Likewise.. 2000). from which the corporation can expect a future return (Drumwright and Murphy. is training the hard-core unemployed. 19 NO. 89). For instance. The most common way that businesses exercise strategic CSR is through donations to local and national charitable organizations. Given increasing concern about the quality of education in our nation. math and technology education. Kraft ran TV commercials showing its employees volunteering at food banks. 2001). 2001). Northwest Airlines cleverly gets its customers involved at little cost to itself by encouraging them to donate their frequent flyer miles to causes like the American Red Cross and the Salvation Army. with the goal of improving students' acceptance and knowledge of technology and its uses. the most popular of which are education.
JOURNAL OF CONSUMER MARKETING. both locally and nationally. including toll-free numbers for consumers to call to inquire about volunteer opportunities and about causes and organizations supported by Timberland and its employees (Drumwright and Murphy. Campbell Soup. Home Depot found a strategic fit by donating funds and employee time to assist Habitat for Humanity's building projects.. believing that this is money well spent for the interests of the corporation as well as of society (Ferrell et al. are donating money. and Timberland produced a print advertising campaign demonstrating its philosophy of community action along with its new product lines. from which many companies are benefiting. It is important for marketers to inform key constituencies of such activities through marketing communications. however.
Although many findings were equivocal and inconsistent between studies. VOL. Social alliances. For example. The most recent study cited was one James Roberts published in 1996. such as McDonald's stay-in-school program or Nike's support of young women and minorities participating in sports. The firm's slogan is ``The only way to tie one on before driving'' (Pride and Ferrell. there is some evidence that firms must respond to consumer demands for greater attention to CSR. Companies can make their contributions of money. Stonehenge Ltd ties the sales of its ``Cocktail collection'' of men's ties to contributions to Mothers Against Drunk Driving.It seems intuitive that the firm will get the most bang for its altruistic buck. 3 2002
. Avon. Cause-related marketing is an offer by the firm to contribute a specified donation to a designated cause in proportion to its customers' purchases.
Opportunities for empirical work
Suggestions for future research Opportunities also abound for empirical work in this field. Public service advertising. which found that large segments of socially responsible consumers exist. Avon believes that this has resulted in sales spikes and more enthusiastic support among the firm's female salesforce (Ferrell et al. Cause-related marketing. long-term partnerships designed to accomplish strategic goals for both parties.
Sponsorships. 19 NO. Clothing manufacturer For Members Only once spent their entire advertising budget on drug abuse and voter education campaigns. This advertising is designed to enhance goodwill by rendering a public service. For instance. whereby breast cancer education and early detection services are offered to low-income. and/or in-kind gifts to events with which their names are associated. Thus. Popular causes include sports. Because
JOURNAL OF CONSUMER MARKETING. volunteer services. For instance. These are collaborative efforts between corporations and non-profit organizations that entail close. we have quite a few opportunities for research: (1) We should learn to what extent the general public as well as specific market segments are concerned about and responsive to CSR.
. the arts and cultural and community events.
. such as beer marketers' moderation campaigns and cigarette marketers reminding us not to smoke in bed. minority and elderly women for a nominal charge or else gratis.
. Walt Disney's sponsorship of the Special Olympics has helped boost its image as a family-friendly company. although they are not readily identifiable. For instance. 2000)..
. if it supports causes that relate closely to its mission and core competencies and that are of interest to its target market. sponsors a Breast Cancer Awareness Crusade. whose primary target market is women. The area promoted ideally is one in which the firm has an economic interest or with which its target market can identify. 2000). Avon's Breast Cancer Awareness Crusade is done in conjunction with the National Alliance of Breast Cancer Organizations. A review of research on socially responsible consumption by Smith (2001) reveals that research by marketing scholars to examine whether CSR influences consumer behavior was mostly conducted in the 1970s.
(2) We need to know more about managers' viewpoints and practices regarding CSR. is really an oxymoron. pp. (2000).the validity of existing scales to measure social responsibility has been questioned (Smith. Aristotle (2000). November 2. NY. References Ahlseen. 3.). J. the nature of the benefits consumers receive from CSR needs to be determined (Drumwright and Murphy.authordisguised. Aquinas. Ethics: Classical Western Texts in Feminist and Multicultural Perspectives. Also. next the What is the truth? link. (Ed. J.P. This would require correlational analysis on data regarding profitability. in Sterba.P.
226 JOURNAL OF CONSUMER MARKETING. The other two types of justice that were proposed by Aristotle. employee compensation and consumer prices between high-altruistic-CSR and low-altruistic-CSR firms within given industries. such as strategic CSR and altruistic CSR. Such comparisons could also be made between publicly held and privately held firms. 19 NO. 66 No. ``Nicomachean ethics''. (2000). usually showing at best a weak positive relationship (Drumwright and Murphy. seem to be taking resources from stockholders. New York.
. (Ed. society seems to be elevating such largesse to the position of being obligatory on firms. 2001). and then the Is the Bible God's word? link. ``Main candidates miss Christian principles''.). 2.
What is their view regarding the legitimacy and boundaries of altruistic CSR and why? How do they respond to criticisms of altruistic CSR raised in this paper? With which of the commonly considered ethical ``duties'' discussed in this article do they agree and disagree and why? Do they approach ethical and CSR decision making primarily from a utilitarian. Threefold Advocate. in Sterba. the monetary value of most such pursuits is difficult to determine. deontological or ethics of care perspective? To what extent do they practice strategic CSR as opposed to altruistic CSR and why? Are there differences in the answers to the above questions between managers in publicly held vs privately owned firms?
. John Brown University. 2001). visit my Web site at www. (4) As is true of public relations activity and most advertising efforts. Vol. 2001). M.
(3) Efforts can also be made to see if firms that are heavy practitioners of altruistic CSR do. 55-70. There is need for more research from a marketing perspective here too.com Click on the Here link.
Notes 1. VOL. academic researchers must work to develop scales that have predictive validity for finding consumers who patronize socially responsible companies. However. the idea of ``optional social responsibilities''. NY. Oxford University Press. retributive justice and compensatory justice. and results of empirical studies have been equivocal. employees and consumers. 9. 115-21. ``Summa contra gentiles''. This would entail surveys of consumer marketers to obtain answers to questions like:
. Ethics: Classical Western Texts in Feminist and Multicultural Perspectives. Given that the term ``responsibility'' suggests something that is mandatory.
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Attempts to create similar societies (along communitarian lines) in Maoist China and in Cambodia resulted in the same problems. Compare this view with the communitarian or family model referred to by Lantos. It is this moral argument against corporate philanthropy that sets Lantos apart from economists such as Milton Friedman. OK. From this seed of acceptance comes the idea of corporate social responsibility (CSR). no purpose served by the art of exchange or the arts of acquisition.'' with ``. Community ties are less strong and the social imperative does not deliver the levels of willing support we need. we have to have capitalism but we have to ameliorate its exploitative nature. This role will reflect the power of the corporation and requires Big Business to spend some of its capital on ``social good''. Lantos argues that social responsibility should be directed first at those people closest to the business ± employees.
JOURNAL OF CONSUMER MARKETING. since the good work benefits the business through productivity gains. regardless of the bottom line effect. Finer (1997) describes oikos-type societies of ancient times as autarchies characterised by complex bureaucracy and coerced labour.This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. shared all things in common . . Big Business must accept duties beyond their original purpose of delivering profits for the stockholders. . . the weaker these ties. Because free enterprise involves success and failure. Aristotle wrote how the household ``. 3 2002
. . rich men and poor men ± it describes the unreformed human state ± there must be a better way. which says that ``. 19 NO. 1946). But so far no better way of making most men richer has been found and for some on the left there comes the dawning realization that capitalism must be accepted. . VOL. community members (including businesses) should support the community. paragons and charlatans. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present
Executive summary and implications for managers and executives
Firms should take care not to squander other people's money At the heart of left-wing thinking throughout the past 200 years or so has been the belief that free enterprise is exploitative. whose arguments were founded in more legalistic and economic assessments of the purpose of business. better quality recruits or happier customers.'' The problem with this is the nature of the ties involved. And the wider we draw the community. is the product of exploitation. customers and stockholders ± rather than to some more distant good cause. . We should act from benign self-interest rather than from pure altruism. . . societies should be thought of as communities in which benefits and burdens are distributed on the model of a family ± just as family members willingly support the family. Corporate monoliths must put something back ± reflecting no doubt the visceral prejudice that what Big Business has is ill-gotten. Charity begins at home Some advocates of altruistic CSR see the modern community as some kind of oikos (the Greek household).'' (Barker. Such action reflects the interests of the ``community'' and the narrow interest of the firm. Family and friendship ties are strong and close ± we want to help and support. Lantos (2001) builds on his demolition of this socialist view of business responsibility by showing that the argument for what he calls altruistic CSR requires business to act immorally.
Journal of Consumer Marketing. Clarendon Press. for reasons of good image. Oxford University Press. to protect the local environment in which it operates. A business may choose. But such works are matters of individual choice rather than issues of corporate responsibility. pp.P. since the benefits that derive from successful businesses far exceed the costs they impose on communities ± free enterprise is not a zero-sum game. Vol. it is wrong for you to pass on the cost of doing those good works to others who had no say in the decision to spend the money. Business has a duty of care ± up to a point Lantos uses the idea of caring virtues and the ethics of care to argue that ``. Vol. Lantos. protecting the environment and supporting the poor and disadvantaged. Except that your neighbour won't pay and the unfortunate stockholder has no choice. 595-630. (2001). to support some social programme but this is a matter of marketing strategy rather than a duty laid on the firm. to act in the interests of the community where its workers live and play and to deliver on the promises made to customers and shareholders. The Politics of Aristotle.You can't send the bill for good works to someone else Lantos returns several times to the point that altruistic CSR involves a cost for stockholders (lower profits). S.
(A precis of the article ``The ethicality of altruistic corporate social Â responsibility''. particularly relations of dependency. Without business-added value (something European governments delight in taxing). Oxford. it adds value to the world around us and makes it possible for human society to consider vast investment in saving lives. 7. Supplied by Marketing Consultants for Emerald. CSR must be focused on the interests of the firm and its direct stakeholders ± to go beyond these limits is to act immorally.)
230 JOURNAL OF CONSUMER MARKETING.) (1946). 3 2002
. 19 NO. customers (higher prices) and employees (lower wages) and that invoking this cost without agreement from those charged is immoral. it shouldn't. Lantos is right to charge us with the responsibility that goes with being a good employer.'' And the primary responsibility within the firm for discharging these duties ± to the benefit of the firm and its stakeholders ± rests with marketers.
References Barker. The business's CSR lies in acting within the law and ethically.'' What we get from this perspective is a way for ``. 18 No. It is clear from what Lantos writes that there is no implied or actual criticism of doing good works ± indeed. a trusted supplier and a friendly neighbour ± to go beyond this in our philanthropy is to spend other people's money without them seeing any return. businesspeople to understand the priorities of their various social duties. If all this sounds rather hard-nosed. these are a personal moral duty. If you (the manager) decide to do good works. we would be less able to provide hospitals. G. History of Government. VOL. welfare payments and overseas aid ± things we see as socially good. Oxford. . . E. . . Discharging these duties provides a central component of corporate affairs and presents an important challenge to marketers. It's a bit like billing your next-door neighbour for the amount you put in the collection plate at church. ``The boundaries of strategic corporate social responsibility''. and trans. (Ed. public relations or other strategic interest. I. Business has a duty to care for its employees. (1997).E. we have an obligation to exercise special care toward those particular persons with whom we have valuable close relationships. Finer.