The conference on The Moral Responsibility of Firms: For or Against? The accountable actor is held to external oversight, regulation, and mechanisms of punis… Some of a business' responsibilities to society include minimizing environmental impact, donating money to the needy and recalling dangerous products. Social responsibility of a business refers to the obligations to take those decisions and perform those actions which are desirable in terms of the objectives and values of society. We can hold firms responsible where three jointly necessary and sufficient conditions are found: 1) Normatively significant choice (possibility of doing something good or bad, right or wrong); 2) Access to relevant information (the agent understands and has the evidence available to make judgments about the options); 3) Control over the choice of option. Understanding these issues will crucially involve understanding dynamics of both money and power. In response, various participants pointed out that these parties might not be so innocent or should have engaged in sufficient due diligence so as to avoid being in the situation where they are punished for corporate misconduct (e.g., shareholders of banks punished for rigging LIBOR). While John Hasnas, Associate Professor of Business at Georgetown University, accepts that corporate moral agency might be feasible theoretically, he argued that it only has practical significance as a means of authorising the punishment of corporations as collective entities and he concluded that this is not desirable. Corporations are legally responsible for looking after shareholder profits. He has contributed to newspapers and online magazines, including "The Evening Telegram" and Michael Bratman, Professor of Philosophy at Stanford University, Christian List, Professor of Political Science and Philosophy at the London School of Economics, Raimo Tuomela, Professor of Philosophy at the University of Helsinki and Geoffrey Hodgson, Research Professor of Business Studies at Hertfordshire Business School, focused on intentionality. By continuing to use the INSEAD website you agree to the use of cookies in accordance with our cookie policy | Manage cookies. The first set of speakers we gathered were all proponents of corporate moral agency, but they approach the problem in different ways. When business behaves badly, who is held morally responsible? INSEAD takes your privacy very seriously. Copyright 2020 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Hodgson argued in favour of accepting collective intentionality on the grounds that a firm is greater than the individuals who make it up. Waheed Hussain, Assistant Professor of Legal Studies and Business Ethics and of Philosophy at the Wharton School, offered a “normative functionalism” perspective, suggesting that treating corporations as independent agents serves a particular function. Thirty years ago, Manny Velasquez, of Santa Clara University, in response to French, claimed that corporate acts do not originate in the corporation but in the corporation’s members. Indeed, this is part of their mandate: cost minimization is a logical corollary of profit maximization. Accountability is a feature of systems and social institutions and means mechanisms are in place to determine who took responsible action, and who is responsible. This philanthropic responsibility implies that a business has a duty to give back in some ways and contribute to the betterment of the society. N. Craig Smith is the INSEAD Chaired Professor of Ethics and Social Responsibility at INSEAD. We welcome your comments and encourage lively debate. In a rapidly changing business environment disrupted by increased regulatory reforms, digitalisation, societal demands, capital... A series of blog posts about how changes in culture and technology are reshaping what managers do. In his view, the corporation has a voice of its own, distinct if not different from those of its members. Other speakers looked beyond the direct question of whether there is moral responsibility of firms to related considerations. Ethical business leaders have a social responsibility to avoid behavior that results in a drain on society's resources. Like French, Iwai and Pettit urged that we can and should hold both individuals and groups responsible, avoiding a potential responsibility deficit where only a group is held responsible and not the individuals involved. When a business pollutes a river, for example, the local sanitation department is responsible for cleaning up the mess that the business made.


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