Social Justice and Corporate Social Responsibility Essay

Social Justice and Corporate Social Responsibility - Essay Example The European Commission defines CSR as "a concept whereby companies integrate social and environmental concerns in their business operations and their interaction with their stakeholders on a voluntary basis." (A Business Contribution to Sustainable Development. n.d.) In an article by John Richardson (2008) pointed out that a company is said to be socially responsible if "it conducts itself reasonably with respect to: the workers it employs around the world; its investors as manifested in its corporate governance practices; local communities in which it operates; how it conducts itself ethically ion its domicile country and in other countries around the world; the environment" (section 2). The CSR is also advocated by authorities mainly because of the fact that CSR principles are in conformity with social justice. The essence CSR lies in the fulfillment of social justice to the various stakeholders. The companies, therefore, are socially obliged to deal with the societal, ecological and economical issues so that all the stakeholders including shareholders are satisfied and eventually results in economic sustainability. A firm which has obligations only towards its shareholders is socially irresponsible and will no longer survive in the modern corporate environment. This approach is not advisable as indicated by 'stakeholder theory' propounded by R. Edward Freeman. In one of his papers, he writes that "corporations shall be managed in the interests of its stakeholders, defined as employers, financiers, customers, employees, and communities." (Carson L. Thomas. 2003, page. No.1). The recent years have experienced many such cases which shocked the entire corporate world, which, later on, became the lessons for the rest in future. Enron Collapse The failure of Enron, the world Energy Giant, is an unforgettable incident in the history of corporate world. The company which became the seventh largest one in the United States of America in just 15 years has become the by-word for corporate irresponsibility. The issues raised were misrepresentation of accounting information, which resulted in unfair accounting, lobbying with politicians and misappropriation of employee savings. The profit figure shown by the company was not true and fair and company's massive debts were concealed from the financial statement. The company had political lobbying with many legislators and the highly paid executives pocketed the life savings of thousands of its employees. What made Enron to socially irresponsible even though it had taken some steps to adhere to CSR The self-interest. The company had not tried to strictly adhere to the guidelines of CSR. Rather, it tried to window dress its financial statements so as to achieve huge market support and high prestige and thereby protecting the interest of shareholders and a few executives. The Enron collapse taught the corporate community a lesson about which Sims responds (2003) "How a Failure of Leadership, Culture, and Unethical Behavior Brought a Giant to Its Knees" (p. 147) Apart from Enron collapse, corporates like Arthur Andersen, Philip Morris and Union Carbide also fell in the category of socially irresponsible companies. Arthur Andersen case is closely associated with Enron for which the former was the auditor. In the accounting scam