Ethical Responsibility Theory - Harmony and Coexistence between Enterprises and Stakeholders

Author: Cao Fengyue
Publisher:
Publish Date: 2006-07-01
Features: The priority sequence of corporate social responsibility, according to the theory of corporate stakeholders, includes five major responsibilities: shareholders, employees, consumers, the community, and the government. Early stakeholder theory did not include environmental issues in corporate social responsibility. With social development and technological progress, environmental issues have become increasingly undeniable, and corporate environmental responsibility has become an important component of corporate social responsibility. Faced with so many responsibilities, which one is the most important and needs to be prioritized? This question is crucial for businesses operating in specific environments. Therefore, distinguishing the primary and secondary importance of responsibilities is a step in fulfilling corporate social responsibility.
Famed management scholar Robinowicz proposed in Management that fulfilling corporate social responsibility is related to a company's capabilities. As a company's capabilities strengthen, the scope of its social responsibilities gradually expands. The process of fulfilling corporate social responsibility has stages, and the type of responsibility suitable for each stage is determined by the company's capabilities at that stage.
Stage 1: The company is newly established, and its strength is not yet strong. At this time, the interests of shareholders should be prioritized, and fulfilling shareholder interests and maximizing profits should be considered the company's greatest responsibility.
Stage 2: After a period of development and accumulation, the company's scale and strength have grown, but it is still not strong enough. At this stage, the company's greatest responsibility should be placed on employees. The company's efforts should focus on increasing employees' wages, improving working conditions, expanding employees' rights, and so on.
Stage 3: After further development and accumulation, the company's strength has grown, and it has gained some social influence. At this stage, the company's responsibilities begin to shift from internal shareholders and employees to external suppliers and consumers. The company starts to realize the importance of its relationship with other stakeholders for its own interests.
Stage 4: As the company grows, its scale expands, and its power extends, its social influence exceeds its own imagination of its behavior. Facing pressure from all sides of society, the company must take responsibility for its actions. Fulfilling social responsibility becomes a major issue that a company cannot avoid in its survival and development. At this stage, the company incorporates activities such as environmental protection and public welfare into its responsibility framework.
Whether Robinowicz's theory of the sequential order of social responsibility is scientific and whether it is a universal law still needs further proof. However, he illustrates a principle: the extent and scope of a company's fulfillment of social responsibility are related to its development status and capabilities. Therefore, when determining the priority sequence of responsibilities, companies must, based on their development status and strength, prioritize different responsibilities at different stages. Moreover, when prioritizing one responsibility, it does not deny the existence of others.