Corporations have a moral duty to address sustainability issues affecting human beings and other non-human beings in the ecosystem. Sustainability issues have been a challenge for many decades, and there is no efficient strategy put in place by corporations to address global problems. As much as corporations have been participating in community welfare programs, issues such as poverty, unemployment, global warming, pollution, and other co-occurring problems get worse by the day. The essay writer identified sustainability issues threaten the well-being of people in developed and developing countries, a trend that makes the corporations’ engagement in various social responsibilities questionable. According to Friedman (1970), corporations primarily focus on the growth of shareholder value and will only comply with social responsibility because it is a legal requirement imposed by the government. Corporations continue to generate profit while the sustainability challenges they are tasked to address are enormous. In that case, the analysis agrees with Milton Friedman’s concept that the business’s primary responsibility is to make a profit for its shareholders and generate low prices for consumers. This business philosophy is a threat to democracies within capitalist economies.
The primary focus of corporations is to maximize profit generation opportunities undermining their social responsibility indulgence. According to Friedman (1970), a crucial business objective is sustained growth achieved through capitalizing on market opportunities that maximize people’s performance and capital productivity. It is unreasonable to deduce corporate duty to address unemployment while there are committed to maximizing human resource productivity. When the employer realizes that their manager or employee is underperforming, they will search for new talent that will help elevate their revenue generation abilities. In that case, the corporation does not care for people’s well-being but their ability to be competitive and sustain shareholder’s value. Corporations are not committed to addressing sustainability challenges but maximizing output from the capital and labor invested by shareholders (Friedman, 1970). As a result, businesses do not adhere to the fundamental moral obligation of promoting good in society; instead, they capitalize on exploiting people to increase their revenue generation.
Corporations have created a monopoly to undermine the needed democracy within the capitalist economy for every business, irrespective of stature, to prosper. Capitalists are competition with one another, and they have adopted and secured a homogenous status of dominance through such undesired practices as mergers, franchising, and acquisition (Klein, 2000). The branded village concept presented by Klein (2000) demonstrates how multinational corporations like MacDonald and Nike are dedicated to destroying local industries and firms to create a global economic monopoly. As a strategy for promoting democracy within capitalist economies, corporations should have empowered local producers to help establish an evenly competitive market that a single brand does not dominate. It is dishonest of brands like Coca-Cola to dominate the beverage industry, creating a universal barrier for similar prospect brands to situate themselves in the market. The brand dominance of corporations negatively impacts local entrepreneurial efforts inhibiting the communal intervention from addressing sustainability challenges, positioning corporations as capitalist-oriented at the expense of their sworn social duties to the community.
Besides creating the brand monopoly, corporations use social welfare avenues to market themselves, contradicting their indulgence in social responsibility. “There has been a radical shift in corporate philosophy where businesses feed on culture to seize every opportunity available to inflate their brands” (Friedman, 1970, p. 23). Corporations in postmodern societies have discovered that consumers are knowledgeable; thus, they have invented ways to market their brands through social responsibility. Any brand that addresses food shortage or global warming establishes a popular niche with consumers. For instance, Coca-Cola introduced zero-sugar soft drinks as a strategy to address the rising cases of diabetes and obesity globally. The strategy improved the corporation’s profit margin while the identified health issues continue to be a menace to society. The brand feeding on community culture is evident when corporations take on sponsorship deals to market their product before performing their social duty to people (Friedman, 1970). Therefore, corporate social responsibility is primarily used as a brand marketing platform to increase sales by businesses.
Expounding on brand monopoly, Klein argues how corporations are using their size to limit the public choice of available products in the market. Multinational organizations have colonized consumers to become lifetime users of their products by ensuring competitors do not have avenues to grow and become relevant. Every company has a goal to dominate its industry, and its identity is demonstrated by Starbucks ‘ aggressive invasion of its target market (Klein, 2000). No business can become successful overnight, as in the case of Starbuck, unless it is involved in underhand practices like undermining local competitors to dominate the market. Sony and Disney have opened brand affiliate stores to prevent competitors from displaying products on their shelves (Klein, 2000). Such practices like customizing stores only to sell the brand affiliate products do not give consumers other choices available in the market to choose from while marking purchasing decisions, thus, demonstrating how corporations have terrorized the economy to only benefit stakeholders.
The social responsibilities serve business self-interest and do not promote universal wellness. Friedman 1970 identifies corporations as artificial figures with non-humanistic responsibilities. In that case, businesses have no responsibilities but act within the moral and legal standards to perform value addition roles (Friedman, 1970). A business will never have society’s interest in its philosophy. The executives and employees are sworn to operate within the moral and legal framework to generate income. Employees’ responsibility is to conduct business as per their desire to make as much money while conforming to fundamental society regulations embodied in legal and ethical customs (Friedman, 1970). For instance, a corporation using carbon fuel as a source of energy will use the commodity within the legal parameters set by the government. If they owe it to society and the environment, corporations will eliminate the use of non-renewable fuels to protect the environment. As a result, corporations are dedicated to serving their self-interests and will only participate in some social or environmental responsibility as a legal or moral requirement.
Corporations have been participating in operational malpractices endangering society’s welfare. In postmodern organizations, businesses are caught in acts of deception designed to some of the social or ecological objectives (Birch et al., 2017). Even if it is not directly, corporations have a moral responsibility to ensure that their products are harmless to society. However, most of them are driven by a greedy interest to maximize profit margins undermining the social responsibility they owe to people and the environment. In 2015, the Volkswagen carmaker admitted to violating the United States air pollution regulations by fitting software that tricked regulators during official testing but did nothing to regulate or reduce nitrogen oxide emissions by their vehicles (Birch et al., 2017). As much as corporate brands like Volkswagen are the pioneer of industrial environmental conservations practices, they failed in their moral and social responsibilities by undermining the existing regulatory framework designed to protect the public.
Furthermore, corporations have been responsible for creating scarcity in employment opportunities by moving local jobs to foreign countries where regulations are less strict economically. According to Klein (2000), corporations have created export processing zones in areas with less restrictive labor laws and dreadful working conditions. It is unethical how businesses could maximize the minimum wage low, denying employees the necessary compensation to facilitate their individual growth. In that case, corporations seem determined to promote their profit agendas, creating massive societal problems like unemployment and exposing the majority populations in the affected areas to lower living standards. Thus, corporations’ non-commitment to improving the population’s income capacity positions them as a threat to the general societal well-being.
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Emerging Economic Issues Concerning Social Welfare
Besides corporations failing to contribute efficiently to community social responsibilities, they have been accountable for existing economic struggles between states. Geopolitics fueled by corporations have redefined crucial socio-economic structures in society (Jessop, 1997). Multinational corporations have a moral duty to promote human welfare and protect the environment. However, such issues are politicized to mask the corporation’s duty to play relatable roles. For instance, geopolitics has militarized environmental hazards, sustainable development, transnational migration, and narcotics trade into national issues to be addressed by the government and not businesses (Jessop, 1997). Car manufacturing corporations will continue producing fuel cars tasking governments to impose carbon emission regulations. In this case, governments are made responsible for the population’s social welfare while corporations constitute the destruction of support systems.
The emergence of a competing capitalism system results from corporations’ involvement in geopolitics, which contradicts their role in promoting social stability among diverse cultural identities. The struggles between capitalism and communism as competing global systems have resulted in opposing versions of capitalism, threatening community well-being (Jessop, 1997). In recent years, the economic conflict between China and the United States has resulted in severe economic policies implemented by both nations, negatively impacting the interpersonal relationships the Chinese citizens share with Americans. Such tensions reduce the business partnership between the warring parties limiting their innovative and entrepreneurial abilities and cooperation to solve most of the issues affecting society. For instance, China does not operate within similar economic doctrines of environmental conservation popular in Western and European countries. The differences are fueled by individual corporation production philosophies culminating in regional conflicts between states.
Businesses are responsible for creating economic exploiters who are not afraid to establish financial growth at the expense of others’ well-being. One can make a good living as long as one can play the game of corporations (Giridharadas & Clay, 2018). As part of social responsibility objectives, corporations are tasked with bringing constructive societal changes that empower members to attain developmental outcomes. It is not the case, as a corporation has been responsible for cultivating unethical business practices by promoting capitalism. Economic power struggles between corporations have created a trade language between professionals where individuals are become more exploitive in the postmodern society than before (Giridharadas & Clay, 2018). In that case, the capitalistic nature of the corporation has informed an exploitive culture in the society degrading the existing business moral structures of honesty and fairness.
Various sustainability challenges, including food insecurity, social inequality, and climate change, affect broader societal well-being. For many years, corporate entities have been engaging in social responsibilities to help address these problems. However, it is shocking to establish that while human problems have increased, corporations have made massive profits out of their business operations. The trend shows that businesses’ primary responsibility is to make a profit for the shareholder and not promote the broader societal well-being. Thus, corporations and their brands threaten sustainability and democracy within the capitalist economy.
Birch, K et al. (2017). Chapter 5- Corporate Responsibility. Business and Society. A Critical Introduction. Zed Books
Friedman, M. (1970) “The Social Responsibility of Business is to Increase its Profits” in The New York Times Magazine, September 13, 1970.
Giridharadas, A and A. Clay. (2018). Business ethics, culture, and vocabulary have conquered the discourse of social change. RSA Journal, 164(3): 36-37
Jessop, B. (1997). Capitalism and it’s future: remarks on regulation, government, and governance. Review of International Political Economy 4(3): 561-581
Klein, N. (2000). No Logo: Taking Aim at the Brand Bullies. Knopf Canada.