| 10.3 Misery Loves Companies | |
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| Tweet Topic Started: Aug 1 2012, 01:01 PM (71 Views) | |
| ASowder | Aug 1 2012, 01:01 PM Post #1 |
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Alexis Sowder Review of "Misery Loves Companies" As we have previously discussed, there is great debate on how and when a company should elect to engage in activities that aid social miseries. Authors Margolis and Walsh present an alternative “starting point” in trying to determine a structure for managers when faced with the struggle of meeting opposing viewpoints their organizations contributing to social ills. The article demonstrates how increasingly difficult it is for managers to meet the frequently opposing goals of contributing socially while maximizing shareholder profits. Margolis and Walsh argue that organization theory and research can contribute to the solution, but a normative theory will not only prove beneficial but is essential in determining a framework for how companies should navigate contributing to social initiatives. Normative theory focuses on the philosophical “how should” companies react as opposed using only descriptive research to set guidelines for managers. At the time of the case, it was evident that there was little research on the "how should we act" piece of establishing framework for deciding on which social ills to invest in. It would be interesting to know how much progress has been made on this in the past 10 years. It is clear that there is increasing pressure for companies and their managers to contribute socially while also improving the bottom line. It is also clear that there is no simple way to resolve the tension that exists in trying to meet both of these demands. While I have not conducted substantial research post-2003 (when the article was published), it would be interesting to see how companies, over the past 10 years, have developed their individual framework for determining which social interests they attend to. Margolis and Walsh’s normative research agenda is an attempt of integrating philosophical inquiry into organization theory which is long overdue. A company needs to understand when its actions truly benefit society before establishing framework based on the missing link between social and financial performance. This was an aspect I had not considered at length. It is often an assumption when discussing CSR that the investment a company makes in societal ills actually helps the intended population. Also to consider - what about when a company contributes to an ill? While aiding in its remediation may not yield positive financial results, many, including myself, would argue that it is that company’s moral responsibility to contribute to the solution. And what about privately owned companies? Sure, they have a different agenda with regards to not being held responsible for the wealth of shareholders, but these managers are still held accountable for financial improvement. Would their framework be any different than a publicly traded company? Margolis and Walsh present a couple steps in developing framework for decision making surrounding CSR. First, the company needs to identify the objectives, duties and concerns that arise when confronted with a social ill to contribute to. Then, a company must consider three factors – first, the problem itself. Second, the company’s relationship to the problem. Third, the impact that the company will actually have on the problem itself. I agree with Margolis and Walsh acknowledging that personal values and commitments will certainly influence the theory that a manager will prefer. However, to best serve societal miseries, it is imperative that managers continually question theories and the best answer will likely lie in blending some form of normative theory and descriptive research. This reminds me quite a bit of Neville's Connected Capitalism, strategically aligning both business and societal interests. More and more, it's a shared belief that a corporation, public or private, should not contribute to social miseries just for the sake of contributing. Each company need to evaluate the three factors previously mentioned and attempt to establish framework for determining what is a good fit for them. |
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| mbehrns | Aug 6 2012, 01:35 AM Post #2 |
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This is a great interpretation of the article, Alexis. You raise many good questions that I too wonder on which if there has been additional or supplemental research. I think it’s interesting to evaluate the steps suggested to develop a framework for decision-making around CSR. The three factors are good factors to deliberate upon; however the factors are solely factors of action. The authors never seem to mention or consider the effects of inaction. I feel like it should be an imperative of a corporation (much like we have discussed in the realm of merger/acquisition) to explore, “What is the consequence of inaction?” In the context of the majority of circumstances in which a corporation is confronted with a social ill to contribute, the most likely consequence would be a measure of societal disfavor. However, some circumstances of non-participation could leave the company legally exposed. Too often, people (I mention “people” specifically as it is people who are at the helm of corporations) are myopically focused on the act of action, and forget the inaction also carries equally real and equally significant consequences. |
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| johnpatrickcoffman | Aug 7 2012, 04:21 PM Post #3 |
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From your second to last paragrah, "Also to consider - what about when a company contributes to an ill? While aiding in its remediation may not yield positive financial results, many, including myself, would argue that it is that company’s moral responsibility to contribute to the solution." I found it interesting that the author suggested that there may be situations where it is appropriate for a company which causes the ills to not contribute to the curing of those ills. In other words, there may be situations where a company is harming the public, but the overall benefit they provide to society may overcome those ills. Since I read the article, I have been trying to figure out any specific situation where this may apply. Are there situations where a company is perfectly justified in harming people, property, environment, etc.? I can think of a few situations where this has occured. For instance, when a government claims eminant domain to take land from a landowner so it can be developed by a private institution. Or when a pharmaceutical company test drugs on people and they discover significant side effects. It's interesting to me that these situations are not so black and white. |
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