The aim of this paper is to compare and contrast the narrow and broad

views of corporate responsibility to show that corporations have ethical

responsibilities beyond making profits for its stockholders. I will give
arguments to support the broad view of corporations and social responsibility
which include: corporate social responsibility, the influence of corporate
culture within the organization, and the stakeholders implementation of the
CSR Reports. I will provide a contrasting narrow viewpoint: that government
agencies, not corporations, should be responsible for serving the public.
There are two views of corporate responsibility, which include the
narrow and broad views. The narrow view is described as a business using
its resources and engage in activities designed to increase its profits so long
as it engages in open and free competition (Shaw, & Berry, 2016, p 210).
The Broader view is described as Businesses having obligations in addition
to pursuing profits. Corporations have responsibilities to consumers, to
employees, to suppliers and contractors, to the surrounding community and
to society at large. The modern corporation as a social institution, should
consider the interests of all the groups that it has an impact on. (Shaw, &
Berry, 2016, p 211).

My first argument for corporate social responsibility is that

corporations have moral obligations to act in such a way that is law abiding,
honest, and non exploiting. If a corporation causes externalities which is
The unintended negative consequences that an economic transaction
between two parties can have on some third party (Shaw, & Berry, 2016, p
213), then corporations are not fulfilling their moral obligations because they
are exploiting consumers in order to maximize profit. Corporations should
not cause harm intentionally in the process of making profit, as this is a
major ethical violation. General Motors exemplified this in the Ford Pinto
case. General Motors created a product for consumers to use, and it was
used it for its intended purpose. However, in order to maximize profits,
General Motors did not correct fatal flaws within their product, this dishonest
and exploitative behavior was severely morally irresponsible. This
demonstrates that the narrow view of corporate responsibility can create
externalities that have a negative effect on people, in this case, the
consumers of the product. Corporations should evaluate the decisions that
they make not solely based on profitability but also on the short-term and
long-term risks that are involved in making those decisions, this is key to
being socially responsible.
My second argument is, how important for a corporation, the influence
of corporate culture is in social responsibility. Social responsibility implies
that a business decision maker in the process of serving his own business

interests is obliged to take actions that also protect and enhance societys
interests. (Shaw, & Berry, 2016, p 212) The ethics that an organization
decides to put in place play a role in behaviors that the employees exhibit
within the organization. When there are rewards or incentives for good
behaviors, this perpetuates a great organizational structure that produces
ethical behavior from employees. When negative behaviors are rewarded, an
environment that puts profit first, above moral behavior, then poor ethical
behavior is exhibited from employees.
My third argument is that more corporations need to increase social
responsibility by implementing a CSR report CSR is defined many ways but
generally refers to how a company addresses and manages its
environmental, social, corporate governance and economic impacts and how
such impacts may affect the companys stakeholders.(Shaw, & Berry, 2016)
This report is generated so that stakeholders can become aware of the CSR
issues and address them through the companys strategic decision making
process. Sometimes called the social entity model or the stakeholder model,
this broader view maintains that a corporation has obligations not only to its
stockholders but also to other constituencies that affect or are affected by its
behavior- that is, to all parties that have a legitimate interest (a stake) in
what the corporation does or doesnt do. (Shaw, & Berry, 2016, p 212) This
gives these corporations brand value, corporate value, positive reputation,
therefore creating a competitive advantage. CSR will also breed stronger

brand loyalty, customers connected with a company that has a good image
will prefer to use that company over another.
An argument for the narrow view is that government agencies should
be responsible for social issues, and serving the public not corporations. The
argument is similar to Milton Friedmans view that in a capitalist economy,
The doctrine that corporations have social responsibilities beyond profit
making thus transforms executives into civil servants and business
corporations into government agencies, thereby diverting business from its
proper function in the social system(Shaw, & Berry, 2016, p 211). According
to Friedman, corporations should not have any social responsibility because
it would hinder them from maximizing profits.
In response to the narrow view argument, without corporate social
responsibility, corporations would focus on profit over ethical standards.
When corporations fail to take moral responsibility, this causes government
agencies to step in, and aid the negative conditions created by the
corporations. Social responsibility arises from concern about the
consequences of a businesss actions as they affect the interests of others.
Business decisions do have social consequences. (Shaw, & Berry, 2016, p
212) This means that they have a responsibility to public not to intentionally
cause harm, and when corporations are socially responsible it creates a
great image for the company.

After exploring the ethical responsibilities that a corporation could have

beyond making profits, and by comparing and contrasting the narrow and
broad views of corporate responsibility. I found that the broad view of
corporate responsibility is essential because Corporations have
responsibilities beyond simply enhancing their profits because, as a matter
of fact, they wield such great social and economic power in our society and
with that power must come social responsibility (Shaw, & Berry, 2016, p
212). As a result of the power corporations have and how much damage
they can cause, corporations need to think about larger social views and the
social responsibility they have, beyond profit making.

Works Cited

Shaw, W. H., & Barry, V. (2016). Moral Issues in Business (Student ed.). Boston, MA:
Cengage Learning

"The Corporate Social Responsibility Report and Effective Stakeholder Engagement." The
Harvard Law School Forum on Corporate Governance and Financial Regulation The Corporate
Social Responsibility Report and Effective Stakeholder Engagement Comments. N.p., n.d. Web. 28
Mar. 2016.