Convenience

Sarbanes
–
Oxley
Act of 2002
A law that requires
CEOs and CFOs to
vouch personally for
the truthfulness and
fairness of their
firms’ financial
disclosures and
imposes tough
new measures to
deter and punish
corporate
and accounting
fraud and corruption
46
Part 1:
An Introduction to Management
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Social Responsibility in Organizations
As we have seen in this chapter, ethics are associated with individuals and their decisions
and behaviors. Organizations themselves do not have ethics, but they relate to their
environments in ways that often involve ethical dilemmas and decisions. These situations
are generally referred to within the context of the organization’s
social responsibility
.
Specifically, social responsibility is the set of obligations an organization has to protect
and enhance the societal context in which it functions. Some of the more salient argu-
ments on both sides of this contemporary debate are summarized in Figure 2.2 and are
further explained in the following sections.
Arguments for Social Responsibility
People who argue in favor of social responsibil-
ity claim that—because organizations create many of the problems that need to be
addressed, such as air and water pollution and resource depletion—organizations should
play a major role in solving them. The Sustainability Matters feature discusses one such
example. They also argue that, because corporations are legally defined entities with most
of the same privileges as private citizens, businesses should not try to avoid their obligations
as citizens. Advocates of social responsibility point out that, whereas governmental organiza-
tions have stretched their budgets to the limit, many large businesses often have surplus
revenues that could be used to help solve social problems. For example, Dell donates surplus
computers to schools, and many restaurants give leftover food to homeless shelters.