The social responsibility of corporations : a stakeholder approach

Khodoga, Ephraim Alfheli (2002-03)

Thesis (MPhil)--Stellenbosch University, 2002.

Thesis

ENGLISH ABSTRACT: The main aim of this study is to develop, from an ethical perspective, a justification for corporate social responsibility. The research methodology used is that of a critical study of relevant literature. The history of corporate social responsibility is discussed and definitions of key concepts are analyzed. Attention is paid to the controversies surrounding corporate social responsibility, and the views of critics as well as advocates of corporate social responsibility are examined. From the literature study it is concluded that since corporations are part of larger social systems, they are not only accountable to their shareholders but their success and long-term survival depends on fulfilling their responsibilities to a range of stakeholders. Stakeholders are defined as those groups or individuals with whom an organization interacts or has a relationship of interdependence, and who are affected by its actions, decisions, policies, practices or goals. The study focuses on the stakeholder approach to corporate social responsibility and aims to show how such an approach underpins the idea of corporate social responsibility. It is argued that corporations have moral as well as social responsibilities to stakeholders who are affected by their operations. Emphasis is placed on business ethics as providing the framework for a set of principles or a code according to which a company should make its business decisions and on which it should base its relationships with stakeholders. The research indicates that companies that aim to operate ethically also benefit in terms of profitability and social acceptance. With reference to several South African companies as examples, the study focuses on corporate social responsibility towards key stakeholders such as local communities, the environment, employees, and customers. In each case it is investigated what the specific responsibility requires of the corporation, and what practical measures can be used to meet the responsibility. It is argued that management's task is to treat stakeholders as equal, balance their sometimes conflicting claims, and promote good relationships among them Managers must consider the ethical and social as well as the economic implications of their decisions. The concluding chapter looks more closely at issues that need to be taken into account as far as corporate social responsibility in South Africa is concerned. As a result of the legacy of white rule and apartheid, active steps need to be taken to address economic imbalances between blacks and whites. Both the government and corporate structures have a role to play in creating mechanisms to meet the economic needs of the black community. It is recommended that the means through which this can be achieved are processes such as affirmative action, transformation, black economic empowerment, and poverty alleviation. The study concludes that social involvement by companies is not a favour extended to society or an optional "extra", but a business imperative and a moral obligation that is fundamental to being a company with legitimacy. The social goals of a company should be supportive of the goals of business and its social involvement strategy should be aligned with the overall business strategy.

AFRIKAANSE OPSOMMING: Die hoofdoel van hierdie studie is om korporatiewe sosiale verantwoordelikheid vanuit 'n etiese perspektief te regverdig. Die navorsingsmetodologie behels 'n kritiese ondersoek van tersaaklike literatuur. Die geskiedenis van korporatiewe sosiale verantwoordelikheid word bespreek en definisies van sleutelkonsepte word ontleed. Aandag word geskenk aan die debatte rondom korporatiewe sosiale verantwoordelikheid en die sienings van teenstanders sowel as voorstanders van korporatiewe sosiale verantwoordelikheid word ondersoek. Uit die literatuurstudie word afgelei dat aangesien korporasies deel van groter sosiale stelsels uitmaak, hulle nie slegs rekenpligtig teenoor hul aandeelhouers is nie, maar dat hul sukses en langtermyn-oorlewing afhang van die nakoming van hul verantwoordelikhede teenoor verskeie belangegroepe. Belangegroepe word omskryf as daardie groepe of individue met wie 'n organisasie in wisselwerking is of 'n interafhanklike verhouding het, en wat deur sy handelinge, besluite, beleide, praktyke en doelwitte geraak word. Die studie fokus op die belangegroep-benadering tot korporatiewe sosiale verantwoordelikheid en poog om te toon hoe so 'n benadering die idee van korporatiewe sosiale verantwoordelikheid ondersteun. Daar word aangevoer dat korporasies morele sowel as sosiale verpligtinge het teenoor belangegroepe wat deur hul bedrywighede geraak word. Klem word gelê op sake-etiek wat die raamwerk verskaf vir 'n stel beginsels of 'n kode waarvolgens 'n maatskappy sy sakebesluite behoort te neem en waarop hy sy verhoudings met belangegroepe moet baseer. Die navorsing toon dat maatskappye wat etiese optrede nastreef: ook voordeel trek wat winsgewendheid en sosiale aanvaarding betref Met verwysing na 'n aantal Suid-Afrikaanse maatskappye as voorbeelde, fokus die studie op korporatiewe sosiale verantwoordelikheid teenoor sleutelbelangegroepe soos plaaslike gemeenskappe, die omgewing, werknemers en kliënte. In elke geval word gekyk na wat die spesifieke verantwoordelikheid van die korporasie vereis, en watter praktiese stappe gedoen kan word om dit na te kom. Daar word aangevoer dat dit die bestuur se taak is om belangegroepe as gelyk te behandel, hul soms strydige eise te balanseer en goeie verhoudings onder hulle te bevorder. Bestuurders moet die etiese en sosiale sowel as die ekonomiese implikasies van hul besluite in aanmerking neem Die slothoofstuk kyk meer in besonderhede na kwessies wat in aanmerking geneem moet word wat korporatiewe sosiale verantwoordelikheid in Suid-Afrika betref Weens die nalatenskap van wit oorheersing en apartheid is aktiewe stappe nodig om die ekonomiese wanbalanse tussen swart en wit mense aan te spreek. Beide die regering en korporatiewe strukture het 'n rol te speel om meganismes te skep om aan die ekonomiese behoeftes van die swart gemeenskap te voldoen. Daar word aanbeveel dat dit bereik kan word deur prosesse soos regstellende aksie, transformasie, swart ekonomiese bemagtiging en armoedeverligting. Die studie kom tot die slotsom dat sosiale betrokkenheid deur maatskappye nie 'n guns aan die samelewing of 'n opsionele "ekstra" is nie, maar 'n sake-imperatief wat grondliggend is tot die legitimiteit van 'n maatskappy. Die sosiale doelwitte van 'n maatskappy behoort die sakedoelwitte te ondersteun en sy sosialebetrokkenheid-strategie moet in ooreenstemming met die oorhoofse sakestrategie wees.

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