The Corporation, is it a Key to Poverty?

7/27/2019 The Corporation, is it a Key to Poverty?

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The Corporation: Is it a Key to Poverty?

William Huckabee

OM7050

Ethics and Social Responsibility

September 11, 2009

Capella University


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The Corporation: Is it a Key to Poverty?

In the light of the current global recession, readers see the results in massive

layoffs as businesses try to reduce costs and conserve capital. When costs cannot be

controlled, businesses close their doors. These events results in thousands being

displaced and turn to social programs for assistance. In the face of layoffs and closures

however, government institutions are seeing a decline in tax revenues and are forced to

reduce their spending; this places the welfare programs citizens need in jeopardy. This

suggests that global poverty levels will increase, creating larger burdens on the already

stressed social systems to meet the needs of this population.

The Realities of Poverty

Poverty is probably one the greatest challenges that the international economies

will ever face (Leisinger, 2007). It is suggested that 80% of the worlds population lives

on less than $10.00 per day (Shau, 2009, para. 1). Shau suggests that the international

poverty line is somewhere around $1.00 per day (para. 7). This figure is much different

in the United States. For instance, Cava and Mayer (2007) suggest that the poverty

level in America is around $50.00 per day (p. 266) or $18,860 (Velasquez, 2006, p.

314) annually.

Furthermore, Pogge (2003) suggests that few citizens realize the harm (p. 2)

that poverty is inflicting on the poorer populations of the world and that there are three

times more (p. 2) citizens that live below the poverty line than live above it. Further,

there are between 955 million (p. 2) and 1.3 billion (Leisinger, 2005, p. 578) in this

impoverished group. Unbelievably, the affluent members of the world believe that they

are entitled to 81% (Pogge, p. 2) of the worlds product.


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Further, people in the richest countries tend to downplay the severity and

persistence (Pogge, 2003, p. 1) of global poverty. In fact, this population believes that

poverty can be eradicated with an occasional donation to the Salvation Army, for

example (Pogge). One could postulate that poverty is a product of, and is being fueled

by misrule and poor leadership (p. 7) creating economic injustices, which is not

congruent with to a thriving society. Mofid (2003) suggests that economic justice is an

important part, and possibly a requirement for, a civilized society and injustices in this

area accounts for much of Global poverty (p. 24).

In contrast, Moyo and Ferguson (2009) suggest that poverty can be created in

part because of geographic or natural resource constraints, such as being land-locked

(p. 31) with no access to rivers or coastlines for example, to move goods to other

nations for trade. Moyo and Ferguson further suggest further that when these two

constraints are not in play, poverty is often a result of ethnic differences.

For example, Collier (as cited in Moyo and Ferguson) suggest that ethnic

differences within the same national boundaries can often affect the economic growth

(p. 32) and stability, regardless of the amount of aid that the county receives. Perhaps

this is because of the absence of a strong and credible (p. 33) government entity to

enforce equity and utility to the group as a whole, versus choosing ethnic sides.

A strong government free of corruption and can be trusted to protect property

rights and the security of contracts (Moyo and Ferguson, 2009, p.41) will be more

congruent for economic growth and the abolishment of poverty. It is governments

responsibility to ensure socioeconomic progress (Leisinger, 2007, p. 114). However,

even if there were a strong and credible government in place, one could postulate that


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as large as this problem is, no one entity can assume the responsibility for all duties of

society (p. 114). One should consider too that often the government can stifle

economic growth; Moyo and Ferguson all this economic distortion (Moyo and

Ferguson, p. 20).

Moreover, with the continuous struggle to control and reduce poverty, the

evidence suggested above indicates that governmental entities do not have the

resources or capacity to help cure this societal problem (Leisinger, 2007). Therefore,

Leisinger suggests that to rid society of this problem, it will require a coordinated effort

between government, civil society, and business (p. 113) to achieve a sustainable

decline in poverty.

Is Leisingers (2007) proposition the solution to poverty? Friedman (1970) would

surely disagree. However, the evidence above suggests that poverty is a difficult

realism that governments as well as corporate leaders around the world have become

accustomed to and Leisinger (2007) suggests that the corporation is the key. Is the

solution to poverty the corporation? It can be postulated that it is because successful

corporate operations lead to economic growth, which increases choice, provides more

opportunities, and renders development efforts easier for developing countries

(Leisinger, 2007, p. 114). This study seeks to find the answer.

The Business Stance

As with any theory, ethical or otherwise, there are always those that take a

particular position to certain theoretical perspectives; this study reveals nothing

different. For instance, there are three ways business leaders look at social their


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responsibilities and their contributions to it such as neo-liberal, stakeholder, and a

broader goals perspective (Weyzig, 2009, p.418).

Neo-Liberal Perspective

As implied earlier, this perspective aligns with Friedmans (1970) view that

business is not in the business of supporting or contributing to social welfare programs

such as the reduction of poverty, for example. Sure, business should abide by

applicable laws and ethical norms of conducting business, such as those related to safe

working conditions for employees, employees rights, and the prevention of sexual

harassment, and the like, while focusing on the maximization of profits (Friedman).

For example, Weyzig (2009) suggests that when left alone, corporations can

create greater wealth for society by pursuing the path for profit maximization versus

assuming other non-profit related activities such as social welfare programs. The only

moral duty a corporation has is to refrain from unfair completion and exercising market

power (p. 420), among others. Greenwood (2002) suggest that once affirmative social

obligations to society are assigned to corporate entities, the environment can demand

more than the firm is capable of providing, can impact the firms profits, and ultimately

its survival.

Furthermore, Buchholz (1991) agrees with Friedman (1970) in that the sole

purpose of a business is to provide goods and services to consumers. Further, firm

should maximize the effective and efficient uses of resources in such a way as to offer

their products at the lowest possible price, which contributes to the firms profits. In

doing so, the firm contributes to and increases the wealth of society (Buchholz, p. 19).

Finally, under this perspective, it can be generally accepted that the benefits of the


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corporate entity and the markets they participate in will be trickled down (Wettstein,

2008, p. 252) to the poorest members of society, effectively relieving corporations from

any responsibility (p. 252).

Stakeholder Perspective

The stakeholder perspective is much different that the neo-liberal view; its focus

is on the maximization of profits with the added feature of considering the firms

stakeholders in its planning activities, and is often voluntary (Weyzig, 2009, p. 419).

Further, Pirsch, Gupta, and Grau (2007) suggests that this theory takes both economic

and non-economic (p. 127) into consideration with regard to its survival and success;

this is by far much different that the neo-liberal view as described above. For instance,

Husted and Allen (2000) suggest that during planning activities, managers must

consider the effects of business operations of the firms stakeholders such as

customer, consumers, vendors, supply chain, and the community at large (p. 24).

Further, it could be speculated that during planning activities, firms adapt to

stakeholder concerns by including this group into the planning activities (Shepard, Bets,

and OConnell, 1997, p. 1007). Moreover, more companies are engaging dialog in this

format to seek and develop responses to the social demands of various stakeholders,

which provide unclear signals (Garriga and Mele, 2004, p. 59).

Also, Amba-Rao (1993) suggests that this is an accommodative and reactive

(p. 554) approach and typically focuses on what the firm should not do and is often

negative (p. 418). This format of correspondence with the environment seeks to

sensitize and understand the dilemmas the firm faces with regard to stakeholders. The

motivation for the stakeholder view goes further than just being accommodative and


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reactive, however. For example, Pirsch, et al. (2007) suggests that a competitive

advantage is obtained by developing a level of trust and loyalty of customers in the

firms targeted market, which can, and often does, increase profits.

Finally, in order for stakeholders interests to be included in the planning process,

they must actively participate in the process; the concern however, is that in third-world

countries participation of stakeholders is often thwarted by the lack of education (Amba-

Rao).

Broader Goals Perspective

Here is where things get interesting. This perspective takes a firms participation

in societal activities well beyond their net present value (Weyzig, 2009, p. 419). This

perspective takes the firm from a reactive stance as in the two previous perspectives to

an active or proactive stance (p. 419). For instance, firms taking a broader goals

perspective actively engage its environment contributing significant resources to

sustainable development and poverty reduction (p. 419) activities in the community

that the firm resides in.

Further this perspective goes beyond behavioral norms and focuses on actions

that go beyond the firms legal obligations (Weyzig, 2009, p. 420). For example, Shaw

and Barry (2007), suggest that corporate entities have social responsibilities because of

their great social and economic power (p. 215) and with that power comes social

responsibility (p. 215)

Examples of some of the activities that the firm undertakes here are cause-

related marketing, community investments (such as constructing or investing is schools,

medical activities, and food subsidies for workers, etc.), and partnerships with


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governments or non-governmental organizations (NGOs) (p. 420). Finally, the net

effect of following this perspective is the improvement and harmonization of business

actions with society and the improvement of societys quality of life in the broadest

possible ways (Shaw and Barry, 2007, p. 215), creating a win-win situation (p. 420)

for most firms.

The Business Related Ethical Issues of Poverty

Firms that globalize, that is, move into developing countries, tend to stimulate the

host areas where they operate, whether moving and establishing a presence there or

through foreign direct investment (FDI). Globalization, therefore, causes responsibility

issues in the relationship between the host country and their citizens (Amba-Rao, 1993),

especially in the moral sense.

For instance, it is suggested that this relationship can have a significant effect on

the standard of living (Amba-Rao, 1993, p. 553) of citizens in the host nation that the

firm operates in. This relationship can be beneficial, as in the case where business

operations help to raise the standard of living or harmful when a business implements

harmful marketing schemes and unethical employment practices (p. 553), for example.

Therefore, before entering into a discussion on how or if a corporate entity can

be beneficial to the reduction of global poverty, it is necessary to examine the ethical

underpinnings of poverty. As suggested earlier, there are three possible ethical theories

that form the foundation of such a strategy, which are the utilitarian theory, the theory of

justice, and the rights principle (Amba-Rao, 1993).


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Utilitarian Theory

With regard to most activities, and especially corporate activities, this theory is

most concerned with the consequences of corporate decisions on society. Velasquez

(2006) suggests that when management chooses a course of action to pursue in a

business decision, to be ethical, the action should produce the greatest amount of

utility (p. 62). This theory of the greatest good, or what Mill (as cited in Sher, 2001)

describes as the greatest happiness principle (p. 3) is possibly the strongest argument

for corporate involvement.

Mill (as cited in Sher, 2001) suggests that the moral foundation for all actions is

utility (p. 7). Further, this foundation holds that the consequence of actions are

considered to the right as long as the action promotes happiness (p. 7) and where

actions detract from happiness, these actions will be wrong (p. 7). Conducting

operations that place women and children at risk would not be conducive to Mills

utilitarian theory. Mill further suggests that pleasure and the freedom from pain are the

only desirable ends (Sher). The only action deemed moral or right, would be the actions

taken by the firm to reduce the level of poverty in their area of operations.

However, whats missing above is the quality and quantity of the action. Mill (as

cited in Sher, 2001) suggests in his utilitarian theory that all human suffering can be

conquered by human care and effort (p. 15) through some sacrifice of their own

greatest good for the good of others (p. 17), anything else would be a waste of

resources. Therefore, one could postulate that by paying decent wages and conducting

safe operations, a corporation would be sacrificing profit for employee safety and

increase employee livelihood. Finally, Mill suggests that any action that one does for the


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good or one that creates the greatest happiness must have the interest of the whole at

stake (Sher).

Justice

It could be suggested that globalization of markets has created more unjust in the

world than many earlier economic changes of the past (Wettstien, 2008). That being

said, justice is the foundation of modern civilized societies (Mofid, 2003, p. 24);

however, there are many instances of injustice around the globe in the form of poverty.

Further, Hume (2006) agrees and suggests that justice creates utility and supports a

civil society (para. 152) and he goes further to suggest that society could not exist

without justice.

For instance, without justice Hume (2006) suggests that there will be nothing but

utter chaos and confusion; what would be the justice of a broken promise or the

invasion of the properties of others (para. 153). One could postulate that no justice can

be achieved in either activity. Insofar as we enjoy our happiness and welfare (para.

193), Hume suggests that all mankind reaps the benefits of justice because it can lead

to the equality.

For instance, Hartman (2005) would agree because justice towards mankind can

lead to equitable distribution of goods and services (p. 7) as well as wealth. Also, as

suggested earlier, protecting property rights and the security of contracts, strong

governments would impose more justice in management of day-to-day operations,

which will benefit society.


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Mofid (2003) suggests that fairness and justice are not nice-to-have (p. 28)

components of the corporate-society relationships, they are fundamental (p. 28)

components that support a sustainable and durable social order (p. 28). However,

Velasquez (2006) suggests that this theory is a purely formal perspective based on a

logical idea that the distribution of some commodity must be consistent in the way we

treat similar situations (p. 89).

Rights

Rights are based on freedom, justice, and peace (Harman, Shaw, and

Stevenson, 2003, p. 199) and are tightly connected to duties (Velasquez, 2006).

Rousseau (2005) and Hegel (as cited in Cutris, 2008) would agree. These rights include

liberty, security of person, and humane treatment (Harman, et al., 2003, p. 200). Each

of these rights implies a duty. Hegel suggests that if one has a right to liberty, others

have a duty not to interfere with that right (Curtis, p. 95). In fact, Rousseau suggests

that all should be treated equal; that they should enjoy the same rights (para. 90), for

example.

Further, Rousseau (2005) suggests that no person or state (corporation in this

case) should draw (para. 90) any distinction between those who make up the state or

community. This suggests that everyone has a right to be treated equal regardless of

their status and by failing to treat all equally, the entity would not be supporting the utility

of happiness, or as Rousseau suggests, such actions taken by an entity can have no

other object than the general good (para. 90).


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Discussion

The evidence above suggests that there are many ethical problems that can be

associated with global poverty such as the restriction of rights, inequality in the

distributions of a nations wealth or the riches of the affluent as well as the consequence

of a firms decisions on a local communitys environment and people. Further, some

(Garten, 2002) suggest that the best way to rid the world of poverty, there must be a

coalition against poverty, much like one built in the Global War of Terrorism, which is

made of a large number of countries that suggest Terrorism will be the downfall of the

modern world.

Furthermore, Garvey and Newell (2005) suggests that this coordinated effort

among business, government, and civil society is the key to achieving lasting human

development and to make globalization improve the lifestyles of people. This is clear

since the estimated annual cost to significantly reduce global poverty will be $50 billion

(Garten, 2002, para. 11) in aid. However, Garten suggests that a tougher stance needs

to be taken such as with debt reductions (para. 12) for the poorest nations as an

example.

Additionally, this coalition should not be made up of governmental bodies alone;

in addition to these institutions, this coalition should be made up of a mixture of

multinational corporations and non-governmental organizations (NGOs) as well as other

non-government related institutions (Garten, 2002). A coalition made of many

organizations such as those recommended here, will send a powerful signal that

poverty is a menace to the world. Some of the actions that could be taken by this


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coalition could revolve around trade issues, prevention of disease, and development

activities.

Trade Restrictions

First, trade restrictions can be lifted for the impoverished countries so that they

can gain access to more markets. For instance, the World Bank (as cited in Garten,

2002) suggests that tariffs and subsidies that are charged by the richer industrialized

nations prevent poorer countries from obtaining access to markets. As a result,

corporations are reluctant to invest in these nations as products imported into other

nations have a higher cost, which defeat the purpose of investing in an area where labor

is cheaper.

Further, allowing access to more markets allows the countrys growth to increase

in multiple ways. For instance, Moyo and Ferguson (2009) suggest that economic

growth as a result of trade occurs in two ways. First, by increasing trade, a firm

increases the amounts of good traded in the market and second, by driving up the

productivity of the workforce (p. 114). Also, it can be suggested that a country can lose

a great deal of revenue because of subsidies, in upwards of $500 billion (p. 115), in

the case of Africa (p. 115), for example.

Disease Prevention

Wettstein (2008) suggests that there are millions are still dying (p. 248)

because of poverty related starvation and diseases. Corporate executives can pursue

avenues to either reduce the level of poverty related deaths and diseases as well as

contributing to the prevention of future outbreaks in countries around the world. Garten

(2002) suggests that this is a worthy act in itself (para. 14).


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Also, Garten suggests that this can be a key (para. 14) activity for the reduction

of poverty. For instance, a healthy population can contribute to their own development,

inciting a level of success and self-worth. Companies do not have to take this problem

on their own, the coalition provides the benefit of being able to have a pool of

contributors where a fund is built and maintained to where disease prevention activities

can be pulled from.

Local Development

Development tends to spur growth. However, as mentioned elsewhere in this

study, implementing such activity will be difficult. For instance, how is a corporate

executive to decide where, when, and what development should take place? Garten

(2002) suggests this is as simple as entering into a joint venture with a government

entity and conducting research and development activities to determine what

development will can benefit the utility of the country and its people, as well as

contribute to the profits of the firm.

Corporate Social Responsibility

Many of the actions suggested above are conducive with what is called corporate

social responsibility (CSR). Further, CSR is to business as the generally accepted

accounting practices is to accounting. It establishes general accepted relationship,

obligations, and duties that relate to the corporate impact on the welfare of society

(Robin and Reidenback, 1987, p. 45). Further, CSR is not new; it has been around

since 1953 (Garriga and Mele, 2004, p. 51). Since that time, others have pursued this

area of research (Pirsch, Gupta, and Grau, 2007; Robins, 2008; Ketola, 2007; among


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others). Moreover, Robins (2008) suggests that CSR is a concept that generalizes the

behavior of a company as being good or bad.

However, Jonker and Marberg (2007) suggest that there is more to CSR than

just the behavior of the firm. In addition to conduct or actions as suggest by Robins, it is

also about the policies that a firm implements with regard to the firms society-related

issues (Jonker and Marberg, p. 109). For example, Carroll (as cited in Pirsch, et al.

2007) defines CSR as a construct that encompasses the economic, legal, and

discretional expectations that society has of organizations at a given point and time (p.

126).

For example, Nelson, Ishikawa, and Geaneotes (2009) suggest that the

corporate entity can contribute to the elimination of poverty through creating jobs,

improving the livelihoods, and enhancing economic options (p. 7) for those in poverty

situations. Further, Nelson, et al. (2009) suggests that in addition to the above

contributions, the corporate entity also helps in transferring skills, technologies and

quality management and business standards (p. 7). Many of these activities fall in to

several components of what CSR can offer. For instance, Table 1 describes some of

the high-level components of CSR.


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Table 1.

Components of Corporate Social Responsibility (CSR)

Area of ConcernEmployee Rights

Product SafetyEcological ConcernsPovertySocial Integration and EthicsEconomic GrowthNote. Data in rows 2-5 are from Corporate social responsibility quo vadis? A critical inquiry into a discursive struggle. Journal of

Corporate Citizenship, (2007) by J. Jonker and A. Marburg, (p. 109). Data in 6-7 are from Corporate social responsibility theories:

Mapping the territory. Journal of Business Ethics, (2004), by E. Garriga and D. Mele, (p.52). Data in row 8 are from Reasons to be

cheerful? What we know about CSRs Impact. Third World Quarterly, (2007), by M. Blowfield, (p. 689)

Shepard, Betz, and OConnell (1997) suggest that since companies are part of

society, or specifically, they are a social institution embedded in communities and the

larger society (p. 1004) they may have a significant part in societys survival. For

instance, Leisinger (2005) suggests that because corporations are part of society, there

are certain actions (see Table 2) that a company should consider when engaging in

CSR activities.

Enlightened Corporate Social Responsibility

Leisinger (2005) suggest that these actions are considered this to be the

enlightened definition of CSR (p. 583). Further, this enlightened definition, as it is

called, is broken down into three areas of actions or compliance, must do, ought to do,

and can do (p. 583). Shepard, et al. (1997) agrees and adds that this is a form of

communitarianism (p. 1004), which can be considered important for prosperity in

todays fiercely competitive global environment (p. 1004).


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Table 2

The activities of CSR.

Must Do(Minimum Standards)

Ought to Do(Good Corporate Citizen)

Can Do(Deserving of Public Praise)

Produce quality

products/services

Avoid questionable practices Corporate philanthropy

Comply with applicable laws and

regulations

Being fair and responsible to

legitimate concerns of

stakeholders

Contribute to community and

neighborhood programs

Promote equal and fair wages Working legitimately beyond

legal requirements

Volunteerism

Provide safe working conditions Good social and environmental

conduct

Donations

Engage in profit makingMake wise strategic decisionsNote: Data in table is from The corporate social responsibility of the pharmaceutical industry: Idealism without illusion and realism

without resignation, (2005), by K. Leisinger, (p. 583).

Further, this compliance ranges from minimal compliance, the must do

(Leisinger, 2005, p. 583), to actions that exceed the firms legal and moral obligations,

the can do (p. 583). As an example, just complying with ethical norms and abiding by

the rules of the game would be an example of must do actions. To take the minimalist

perspective on step further, following the guidelines of the Occupational Safety & Health

Administration (OSHA) by installing shield guards in a manufacturing plant, for example,

would be a must do activity.

Business Contribution to Society

Also, firms that employ CSR as a strategy can make contributions to society in

many ways. For instance, employing this strategy, firms contribute to the environment

by creating jobs and providing training opportunities for the less fortunate (Boyle and

Boguslaw, 2007, p. 106). Also, by establishing a partnership with other firms such as


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those in the firms supply chain for example, the firm can provide expertise and

resources (p. 106) to these firms expanding their social agenda to other localities.

Furthermore, firms can further their social agenda as well as benefit their

resources by improving the education level of the community by offering scholarship

aid and financial support (Boyle and Boguslaw, 2007p. 106) to the youth that are

financially stricken in the community that the firm operates in. Additionally, these

activities are considered to be directly influencing the firms environment, however,

Boyle and Boguslaw suggest that a firm can, and often does, indirectly help in social

welfare activities indirectly, by providing FDI into local firms, which often generates

economic growth (Frynas, 2008, p. 275).

Also, CSR facilitates the protection of the public welfare and private interests in

many ways. First, by pursuing legal and ethical means of operating, the firm prohibits

the exploitations of workers and society (Cava and Mayer, 2007). Further, by strategic

philanthropy, and compliance (Nelson, Ishikawa, and Geaneotes, 2009, p. 6) with local

laws and codes, the benefit their reputation and add to the contributions of local

development, which creates more markets for the firms products, which increase

profits. Therefore there are good reasons to see that CSR is good for both business and

society.

Furthermore, the evidence suggested above indicates that CSR is an appealing

way to help with social welfare issues, however, Buchholz (1991) suggests that this

strategy is often hard to implement because there is no real proof (p. 22) that such a

program can actually work. For example, Frynas (2008) suggests that there is a lack of

empirical evidence and a supporting business case (p. 274) that this strategy is useful


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to any firms. Although Frynas acknowledges that programs of this type exist, there is

just not enough evidence to support such a strategy.

Cost and Benefits of Corporate Social Responsibility

In addition, this type of program is expensive and often cuts into a firms bottom

line, detracting from the earnings of stockholders. Further, the economic performance of

the firm has priority over all other social activities, and the reservation of funds for the

pursuit of such activities would affect the long-term survival of the firm, which is often

measured by the firms level of profit and growth (Buchholz, 1991, p. 22).

Even with the difficulties suggested above, Pirsch, et al. (2007) suggest that

there is a strong argument for this type of strategy. For instance, Pirsch, et al. suggests

that the benefits of such a strategy often outweigh the costs and can be measured in

the firms performance. Further, Pirsch et al. suggests that customers tend to display a

willingness to purchase products from companies that engage in these activities.

Further, engaging in CSR activities can improve the firms image (Pirsch et al.,

2007, P. 125), creating a loyal customer following. Loyalty can be translated into higher

sales, and higher profits. Further, in areas where the firm operates, this strategy can be

translated into higher community support (p. 125) for the company, making tactical

operating decisions in that region easier to manage.


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Acceptance of Corporate Social Responsibility

With that said, businesses need to be prepared to accept that they must play

more than an economic role in society. As Robins (2007) puts it; businesses should

accept a direct responsibility for making the world a better place (p. 330). This suggests

that by ignoring CSR a company could be committing suicide (Ketola, 2007).

For instance, CSR represents a set of principles by which a company can all but

guarantee its survival as well as providing for the protection of the public welfare and

private interests, while maintaining its profitability (Logsdon and Wood, 2002). For

instance, by incorporating CSR activities into decision-making activities the firm could

benefit through an enhanced labor market as well as local markets to purchase raw

materials. This translates into higher profits because the local area provides consumers

for its goods and services (Mofid, 2003; Cava and Mayer, 2007).

Also, the language of economics lacks the moral language necessary to address

poverty (Wettstein, 2008). With respect to the developed world, their core values over

the years have changed when it comes to discriminatory work practices, human rights,

and environmental degradation, among others (Fuentes-Garcia, Nunez-Tabales, and

Veroz-Herradon, 2007, p.27). CSR can also be linked to three other factors. First, there

had been an increase in regulation by intuitive institutions such as the United Nations,

European Union, among others, that requires corporations to work within guidelines that

work for the good of society (Fuentes-Garcia, et al., 2007, p. 27).

Second, consumers are placing increased pressures of firms to produce green

products and to find alternative uses for non-renewable resources (Fuentes-Garcia, et

al., 2007, p. 27). Thirdly, Wall Street investors are choosing companies that develop


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good CSR programs (p. 27) to invest in; this can be typically done through investment

tools such as mutual funds and the bonds market. Finally, with the multitude of real life

reasons for institutionalizing CSR programs, there are a multitude of ethical reasons

behind the CSR programs.

Conclusions and Future Research

This study looked at poverty, its ethical implications, as well as a possible

business solution to poverty. Early in this study it was hypothesized that the solution to

poverty is the corporation. This study looked at the business stance, which reflected the

three different views of businesss stance to social welfare activities.

Of the three views, the broader goals perspective looked most appealing

because this perspective includes social issues in business planning, which allows for

companies to pursue profit maximization as well as social activities. Further, proven or

not, these activities can add to the good of society while preserving, and possibly

increasing the firms bottom line.

The moral implication of poverty affects society in many different ways. This

study hit on the three main topics such as rights, justice, and utilitarianism; there could

be more ethical implications such as the ethic of caring, for example. However, these

theories seem to work best when looking at the consequence of business planning and

operations. Further, when looking to businesss contributions to social welfare, a

business can affect more good on justice by creating jobs, thereby, increasing the

equality with respect to better income, increased quality of life, and access to better

health.


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Moreover, increased quality of life offers the impoverished populations the

opportunity gain their personal liberty, access to property, and increase their personal

security levels. Also, as a byproduct of the citizens increased income and welfare,

government revenues will increase and will be more able to protect these rights. This

suggests that there are significant political implication ties to any solution to poverty and

the corporations involvement (Robins, 2008).

Once the government is better able to govern, then more companies begin to

invest in there areas by either establishing operations in the region, or through FDI. As a

company grows, the government works to expand its trading partners, thereby creating

more demand for its products, which will increase the nations productivity (Moyo and

Ferguson, 2009). This cycle continues creating further economic growth.

These coordinated government and corporate activities can be the key to long

term economic growth and stability. Therefore, the answer the question posed earlier is

that the corporation can be part of the solution to poverty, which supports Garvey and

Newells (2005) and Leisingers (2007) suggestions that the solution to poverty is a

coordinated effort among business, government, and civil society.

Through the actions of these entities, individual rights will be protected, justice

will be served through the equal distribution of societys benefits and burdens, and

society as a whole will be benefit from the good that is produced as a result of their

coordinated effort. Finally, Robins (2008) suggests that future research could be

benefited by investigating the possible correlation between CSR expenditures and

some financial measure of business success (p. 334). This research could help to


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prove the link, if any, between CSR activities and the increased social benefit that is

realized by the firms environment.


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Documents

The Corporation, is it a Key to Poverty?