At the heart of CSR and Business Ethics is the debate as to what an organisation is for, i.e. the purpose of business, and whether an organisation as an artificial entity, should have the same rights and responsibilities as people. In other words should we hold an organisation, as a legal person, morally responsible for its decisions and any benefits and harms that flow as a result?Farrell, Fraedrich and Farrell (2015) identify that individuals may engage in unethical behaviour believing they are advancing the interests of the organisation. Harrison (2001) suggests that in a modern firm, business activities are invariably established and controlled through a company structure, rather than by an individual.
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In business ethics the discussion concerning the extent of corporate moral responsibility primarily focuses on the organisation as a rational but limited entity. This is because we establish businesses and companies to do limited things. For example, The Ford Motor Company was established as a company to make cars, Qantas is a company that provides air travel etc. These are legal structures under which business activity takes place. In the eyes of the law, these organisations are in fact “legal persons” with many of the similar rights and responsibilities that true human beings have. But clearly a company is not a true person with flesh and blood and a brain. Because organisational actions are limited only to achieve its stated ends or goals such as profit or sales, some argue that so too are its moral responsibilities. This concept is often referred to as social obligation described by Robbins (1990) or the responsibility of an organisation is to achieve its objective solely within the limits of the law. (this will be canvassed further in the topic on Corporate Social Responsibility) Donaldson (1989) describes another perspective that the organisation, whilst a legal person, is not a corporeal one and thus not capable of intent. If only corporeal rational entities are capable of intent, this would suggest that an organisation, as a legal entity, couldn’t be held morally accountable for its actions………………………………………