Abstract
ArgandoƱa, professor at IESE Business School, Barcelona, analyzes the main traits of Corporate Social Responsability (CSR), showing that they are compatible with the encyclical Caritas in Veritate. He understands CSR as an ethical and not merely social responsibility, centered in the human person and thus deriving not from abstract principles but from decisions made by the economic agents in business firms. These decisions are based upon the well-educated conscience of the individual as well as upon objective rules, including the nature of the good intended in the action and on the circumstances of time and place. An ethical conception of CSR requires the exercise of virtues in the firm. The author underscores two virtues: justice and love, which he considers to be more than mere philanthropy. The proposed conception implies a real effort of the managers and their organizations to build the common good.
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Notes
- 1.
āThis study is part of the activities of the āla Caixaā Chair of Corporate Social Responsibility and Corporate Governance at IESE Business School.
- 2.
āCSR is sometimes presented from other angles, which are superposed on those mentioned here. For instance, people talk about descriptive CSR (how companies actually behave in relation to their social responsibilities), normative CSR (how they should behave), and instrumental CSR (what tools they have at their disposal). Cf. Donaldson and Preston (1995).
- 3.
āI do not propose to extend the scope of this study to other documents of the Churchās social Ādoctrine, which will be referred to only marginally in what follows.
- 4.
āThis point of view is not widely shared: āmany people today would claim that they owe nothing to anyone, except to themselvesā (Benedict XVI 2009, 43).
- 5.
āCorporate social responsibilities would presumably differ from that set of moral responsibilities in that they would be publicly and formally assumed by the company in the eyes of society (hence their designation as āsocial responsibilitiesā), which would entail commitments of transparency, disclosure, accountability, etc. ArgandoƱa (2008), ArgandoƱa and Weltzien-Hoivik (2009).
- 6.
āFor an extensive list of definitions of CSR, see Mullerat (2010).
- 7.
āThis is not the place to analyze why many authors do not emphasize the ethical nature of CSR, a subject that has not been tackled in the literature. For some, CSR is a āwatered downā alternative to business ethics, which is seen as an advantage, as it avoids the need, on the theoretical plane, for a solid moral foundation as well as the challenges that putting it into practice would entail. For others, CSR is a technical management tool that has been humanized through the introduction, from outside, of certain restrictions on what a company can and must do to maximize its profits, in the form of social action, good environmental practices, human resources policies, voluntary self-restraint, etc. Lastly, for yet others, ethics is no more than a set of social conventions or norms that change over time and geography, so that companies merely need to know what society expects or demands and act accordingly in order to avoid problems (acquire social legitimacy) or be successful, based on a cost-benefit analysis.
- 8.
āIf CSR is established on incorrect ethical principles, it will lead to perverse outcomes, which also occur when it is demanded that the economy not be subject to morals (Benedict XVI 2009, 34). That is to say, CSR cannot be morally neutral.
- 9.
āIn the same way as āit was not just a matter of correcting dysfunctions [of the market] through assistance [to developing countries]ā (Benedict XVI 2009, 35), Benedict XVI clearly would not accept a conception of CSR as a means of validating ethically inappropriate behavior through philanthropic activities or social action.
- 10.
āThe encyclical does not refer to stakeholder theory, but enumerates the parties most commonly included in this theory (Benedict XVI 2009, 40). Although the Pope states that ābusiness management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the businessā (Benedict XVI 2009, 40), he is not, it seems to me, saying that the purpose of companies is to create value for all stakeholders or to serve stakeholdersā interests. He is merely quoting the position of certain authors, which seems compatible with the view that Benedict XVI expresses elsewhere in the encyclical regarding the purposes of companies, and which in any event requires that the interests of all concerned be taken into account.
- 11.
āProprietors, investors, entrepreneurs, and managers are the agents mentioned in paragraphs 40 and 41 of CV insofar as they are responsible for decision making in organizations. By proprietors, Benedict XVI seems to mean the people who hold or share ownership of companies and are responsible for managing them; the encyclical laments, for example, that āit is becoming increasingly rare for business enterprises to be in the hands of a stable director [owner] who feels responsible in the long term (ā¦), for the life and the results of his companyā (Benedict XVI 2009, 40). The law gives investors the right of ownership of companies and thus also the power to make ultimate decisions, appoint managers, and control the economic surplus; the Pope recalls, for instance, that āinvestment always has moral, as well as economic significance [ā¦] What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard for the long-term sustainability of the enterprise [and] its benefit to the real economyā (Benedict XVI 2009, 40). Entrepreneurs are those who carry out the ābusiness enterpriseā (Benedict XVI 2009, 41), i.e., who create start-ups, in the various forms the encyclical recognizes. And managers make decisions in the name and on behalf of the proprietors; the encyclical laments, for example, that āa new cosmopolitan class of managers has emerged, who are often answerable only to the shareholders, generally consisting of anonymous funds which de facto determine their remunerationā (Benedict XVI 2009, 40).
- 12.
- 13.
āThe concept of sustainability that underlies the encyclical, both at firm level and at country or global level, is not exclusively ecological. Many authors prefer to talk about economic, social, and environmental sustainability rather than CSR, perhaps because sustainability is, or at least appears to be, more specific, or because it is further removed from moral interpretations (which make some people uncomfortable), or because it lends itself more readily to the use of instruments (measurement, audit, reporting, etc.). The treatment of environmental problems in Caritas in Veritate (Benedict XVI 2009, 48ff) is much broader and less deterministic than most other analyses.
- 14.
āLike other documents of Catholic social teaching, the encyclical states clearly that āeconomic action is not to be regarded as something opposed to societyā (Benedict XVI 2009, 36); if on occasion āthe market can be a negative force,ā this is ānot because it is so by nature, but because a certain ideology can make it so. [ā¦] It is shaped by the cultural configurations which define it and give it directionā (Benedict XVI 2009, 36). Cf. also John Paul II (1991, 42).
- 15.
āThe author has dealt with this subject in ArgandoƱa (2010).
- 16.
- 17.
āThe encyclical offers some suggestions for international development programs which, by analogy, are applicable to CSR programs. For example, āsolutions need to be carefully designed to correspond to peopleās concrete lives, based on a prudential evaluation of each situationā (Benedict XVI 2009, 47), etc.
- 18.
āEnvironmental protection, for instance, is a responsibility of companies, but also of their customers, suppliers, employees, managers, and owners. It will be the companyās task to identify and specify the environmental duties that fall within its responsibility, but the company will also need the participation and involvement of all in order to perform those duties.
- 19.
āThe encyclical contains a very brief reference to the ācharitable and educational activitiesā of the Catholic Church, but points out that the Churchās public role is far more ambitious (Benedict XVI 2009, 11). In Deus caritas est, the references to the Churchās social support activities are more extensive (Benedict XVI 2005, 19ff).
- 20.
āIn paragraph 35, it is stated that āwithout internal forms of solidarity [ā¦], the market cannot completely fulfill its proper economic functionsā (Benedict XVI 2009, 35). These āinternal formsā of solidarity obviously cannot refer to philanthropy.
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ArgandoƱa, A. (2012). Corporate Social Responsibility in the Encyclical Caritas in Veritate . In: Schlag, M., Mercado, J. (eds) Free Markets and the Culture of Common Good. Ethical Economy, vol 41. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2990-2_13
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