Question

Reading Schools of Thought on Social Responsibility The following excerpt deals with the various schools of thought on social responsibility. These postures can be found across Industries and can be used as a framework for ana lysis of dilemmas. Ethical Postures, Social Responsibility, and Business Practice The ethical perspective of a business often sets the tone for its operations and employees choices. Historically, the philosophical debate over the role of business in society has evolved into four schools of thought on ethical behavior based on the responses to two questions: (1) Whose interest should a corporation serve? and (2) To whom should a corporation be responsive in order to best serve that interest? There are only two answers to these questions-shareholders only and the larger society"--and the com- bination of those answers defines the school of thought. Inherence According to the inherence school of thought, managers answer only to shareholders and act only with shareholders' interests in mind. This type of manager would not become involved in any political or social issues unless it was in the shareholders' best interests to do so, and provided the involvement did not backfire and cost the firm sales. Milton Friedman's philosophy, as previously expressed, is an example of inherence. To illustrate how a business following the inherence school of thought would behave, consider the issue of a proposed increase in residential property taxes for school-funding purposes. A business that subscribes to the inherence school would support a school-tax increase only if the educational issue affected the company's perforance and only if such a posi- tion did not offend those who opposed the tax increase. Enlightened Self-interest According to this school of thought, the manager is responsible to the shareholders but serves them best by being responsive to the larger society. Enlightened self-interest is based on the view that, in the long run, business value is enhanced if business is respon- sive to the needs of society. In this school, managers are free to speak out on societal issues without the constraint of offending someone, as in inherence. Businesses would anticipate social changes and needs and be early advocates for change. For example, many corporations today have instituted job sharing, child-care facilities, and sick-child care in response to the changing structure of the American family and workforce. This responsiveness to the needs of the larger society should also be beneficial to shareholders because it enables the business to retain a quality workforce.

Answer 1

1) Friedman's view is that the managers have to concern them with only one single goal i.e. to maximize the profits for their shareholders and the shareholders are the ones to decide if they can involve themselves in social causes and activities. This view does not blend across all the categories as many feel corporations have a role to play in the society being partners in growth and development of society. Many also feel that the single goal of profits will only serve few capitalists and increase inequality gap in the society and unless the shareholders share their profits in the larger interests, the society will not develop.Such approach also results in unethical behaviors and exploitation of low level workforce.

2)The company is known for mahogany wood in its piano. Clearly, its brand image and perception is linked with the use of mahogany wood for its sound quality and replacing it is certainly not an option. The company could clearly increase the price of its wood build pianos since they wont be available in large quantities. This will result in premium category of pianos for professionals who are still willing to pay for sound quality. For cheaper options, the company can use other variety of wood which are abundant. This can be the entry level option for amateurs and non professional. The company can also run campaigns advertising their environmental friendly pianos which prevented the destruction of rain forests and create awareness among customers who are sure to respond positively.

The Inherence school of thought will seek to lobby with brazil and peruvian governments to lift restrictions on harvesting on these woods as they are concerned only with end profits and any changes in the raw material which affects quality resulting in lower profits will not be beneficial to them.

The enlightened self interest school of thoughts will seek to find alternatives source of mahogany or other wood types to replace mahogany with same quality. They will seek to maintain same levels of profitabilty and helping the larger cause of saving the rainforests.

The Invisible Hand will seek to work with the government in presenting their usage capacity and how much mahogany will be needed per year.. They will accept the regulatory position and look for alternatives.

Social Responsibility school of thoughts will seek to present their brand as environment friendly brand which has shun a raw material to do its bit for the environment. They will seek to alter the customer choice by appealing to their sense of social responsibilities and emotional connect with the environment providing alternative products as environment friendly.