Utilitarianism and Corporate Social Responsibility | Free Essay Example

Utilitarianism and Corporate Social Responsibility

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Topic: Business & Economics
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A corporation can be loosely defined as a business enterprise owned and governed by a group of people. The definition provided can be enhanced by citing notable examples such as Wal-Mart, Procter & Gamble, Uniliver, Google and Microsoft. In the last two centuries corporations are viewed as powerful and as influential as national governments. Corporations are also praised for the wonderful products and services they provide. At the same time corporations are criticized because of the infractions committed because of the need to make a profit.

Corporations are known to pollute the environment and the ability to persuade consumer to buy products that they do not needed. However, many corporations are trying to transform their image by giving back to the community through actions and programs that fall under the category of corporate social responsibility. It is interesting to find out if John Stuart Mill’s theory on utilitarianism can be used as an ethical theory that can justify the use of corporate funds in order to finance activities that may seem to be counter-productive to the goals of the company.

Ethical Theory

It is of critical importance to have an ethical theory that one can use to make effective decisions when faced with a moral dilemma. There are several ethical theories developed by many philosophers over the centuries. It is difficult to choose a particular model that works best in every situation.

For example, Kant proposed an ethical theory that highlights the importance of the highest good. But the problem is there is no agreement to what constitutes the highest good because it is subject to debate. It is therefore important to go to the next step which is to develop a standard that can be used in order to provide guidelines that people can use for decision-making purposes.

John Stuart Mill’s contributed greatly to the discussion of ethics because he pointed out that there is a practical way to develop guidelines that can aid in making decisions. He said that “actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness” (Mill 1). This theory belongs to a general category called utilitarianism. At its core, this theory underscores the importance of utility. Every action is based on a particular goal.

In the utilitarian framework the end goal is happiness. John Stuart Mill must be praised for the simplicity of this model and yet it provides a clear direction for those who need to know the right decision. Instead of merely talking in the abstract and stating that decisions must be based on the highest good, the person is given something that is more tangible, the pursuit of happiness. Happiness is easily understood because it can be interpreted as the absence of pain, discomfort, and other negative feelings. However, critics wasted no time to challenge this idea because of its hedonistic undertones.

The counter-argument that this theory is self-indulgent must be addressed, because the pursuit of happiness and pleasure can lead to all sorts of evil schemes. John Stuart Mill’s interpretation of utilitarianism must be understood through his contention that there ought to be a standard. The philosopher clarified that this standard:

is not the agent’s own greatest happiness, but the greatest amount of happiness altogether; and if it may possibly be doubted whether a noble character is always the happier for its nobleness, there can be no doubt that it makes other people happier, and that the world in general is immensely a gainer by it. Utilitarianism, therefore, could only attain its end by the general cultivation of nobleness of character (Mill 7).

In Mills’ clarifying remarks, it is clear that utilitarianism must not be used as an excuse for self-indulgent behavior. Therefore, this ethical theory strives to determine the correct action through a decision that serves the common good. But it goes further by saying that the decisions must not only create happiness in the lives of many people, it must also lead to the cultivation of a noble character

Application

Utilitarianism can be applied in the corporate world. Corporations are entities created to please shareholders. Therefore, an ethical dilemma ensues when the company is forced to make a decision to give back to the community or satisfy the needs of the shareholders. The investors or shareholders have only one thing in mind and that is to earn a profit through the money that they invested. However, utilitarianism dictates that the correct action is the one that can create the “greatest happiness altogether” (Mill 7). Thus, the company must learn to give back to the community and spend money in activities that does not generate a profit.

A good example is the corporate-social-responsibility (“CSR”) program launched by Uniliver. This multinational-corporation is a popular brand because of the household products that the company sells worldwide.

A CSR program is deemed counterproductive because it requires the use of corporate funds to finance something that has no direct bearing on the profitability of the company. But Uniliver demonstrated that there is a way to handle the conflict that exists between the business aspect of handling corporations and the need to give back to the community. Uniliver was able to prove that the application of utilitarianism can benefit the organization and the community.

In the said CSR program Uniliver hired thousands of Indian women to sell their products. This program was initiated in a region that is so remote it is not practical to send sales representatives in the area. It is a dramatic demonstration of utilitarianism. In this example the agent has achieved the greatest good because the agent was able to blend together corporate-social-responsibility and the need to increase revenue. Thus, there is a way to satisfy the requirements of business ethics while at the same time maintaining a sound economic base. It erases the fear that an ethical way of doing business can drive a company to bankruptcy.

Analysis

The CSR program of Uniliver is the best example of how utilitarianism can be applied in a real-world setting. In the said program, Uniliver benefited from helping others. In a normal way of doing things, helping people requires sacrifice on the part of the helper. In this case the company risked very little to accomplish much.

Consider for instance the reaction of one of the beneficiaries who remarked that she now commands respect in the village and added “It is enough to stand on my own two feet” (Walt 1). Without a doubt the earnings are miniscule but it is enough for women who are so poor that they are dependent on their husbands for survival.

Homestretch

Utilitarianism has to be interpreted correctly because a mere overview of the theory can provide a defective understanding of the said ethical theory. The problem lies in the fact that John Stuart Mill used happiness as a measuring stick to determine the appropriateness of a particular action. It has to be clarified that the end goal is not just to attain happiness but to reach a state where the majority are happy. At the same time the goal includes the need to achieve noble character.

Uniliver’s CSR program is a perfect example of how to apply utilitarianism. It is an action that benefited not only the company but also thousands of destitute women in India. It is not just the pursuit of happiness but the creation of a noble character. The company representatives who went there to initiate the project and the beneficiaries who now understand the meaning of independence experienced a transformation in character. The corporate leaders are happy that they can help curb poverty but the women are ecstatic that they can have control over their destiny.

Conclusion

Utilitarianism is difficult to apply because it requires not only the consideration of the majority but also the attainment of noble character. If it is difficult to accomplish this goal on a personal basis, imagine the difficulty if applied in a corporate setting. But the CSR program of Uniliver is a good starting point because it provides a blueprint that other companies can emulate. Unilever was able to prove that helping others need not be disadvantageous for the company and their shareholders. The said CSR program is a good example that doing the right thing can lead to long-term growth and sustainability.

Works Cited

Mill, John Stuart. Utilitarianism. Utilitarianism,  2011.

Walt, Vivienne. Charity Crunch Time. Time Magazine, 2009.