CORPORATE RESPONSIBILITY

Corporate Responsibility

Introduction2

Stakeholder Theory and Corporate Responsibility2

Corporate Responsibility4

The Link between the Concepts4

Ethical Principles of Stakeholder Theory5

Motivations to Behave Ethically6

Corporate Social Responsibility6

CSR programs7

Ethical Behavior8

Policy Management Stakeholders9

Conclusion11

Corporate Responsibility

Introduction

Organizations comprises of legal and economic responsibilities. Organization also has some extended responsibility apart from these basic obligations which are basically towards the society where the operations of organizations take place. These responsibilities are known as corporate responsibility. The CR is a perceived responsibility in environment, community involvement, protection of welfare of workers is the main aspects (Weiss, 2003).

Stakeholder Theory and Corporate Responsibility

Stakeholders are those individuals who are in direct interaction with the organization on any level. These individuals are directly affected by the organizational decisions and actions. Stakeholders also have the capability to give the organization any benefit or damage. Usually it is perceived that the stakeholders comprise of investors, customers, suppliers and employer. Stakeholders are basically of two types. First are those which includes customers, employees, shareholders and those who are directly involved with the survival of the organization. The second group of the stakeholders comprises of those who have peripheral involvement in the organization such as the community members and the government (Halal, 2000).

Stakeholder theory according to Phillips (2003) is related to organizational management and ethics. Stakeholder theory is somehow unique among all other organizational management theories where stakeholder theory mainly focuses on the morals and values. Stakeholder theory mainly aims to protect the rights of stakeholders in the organization. This generally includes maximization of shareholder profit because shareholders are primary stakeholders, which is generally consistent with the traditional theories of the organization. Also, the theory includes the interests and benefit of other groups of stakeholders which comprises of both secondary and primary stakeholders.

Corporate Responsibility

Corporate responsibility is also known as corporate social responsibility. The common theme within all the definitions provided for the corporate responsibility is the organizational responsibility for the protection of public good. Corporate responsibility defines the relation of the organization with the society's definition, management and actions (Clarkson, 1995).

The Link between the Concepts

Both the corporate responsibility and stakeholder theory have some common aspects which encompasses ethical and moral principles. Both the concepts have some integral link where it is supposed that the stakeholder theory is responsible to create motivation in business. Eh authors argue that this is not always the case, while some suggest that CSR is beyond the stakeholder theory. The argument that public goods are protected by CSR means there is a responsibility beyond the stakeholders, depending on the organizational perspectives. This indicates that the decisions of CSR are based on moral and ethical actions, which provides benefit and protect the public interests (Haberberg, 2001).

Public also comprises of the term stakeholders because stakeholders are the ones which are affected by the organizational decisions. Corporate action is self-motivated instead of strategic motives motivating it. Stakeholder theory also includes the motives assuring the benefits of stakeholders are maximized and the loss is limited. Stakeholder theory comprises of moral and ethical principles, which indicates that there ...