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The Importance of Phronesis to Corporate Social Responsibility

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Book cover Corporate Social Responsibility and Governance

Part of the book series: CSR, Sustainability, Ethics & Governance ((CSEG))

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Abstract

Accepting that corporate social responsibility (CSR) demands that when deliberating about business any economic agent ought to take into account the interests of all stakeholders, i.e. clients, consumers, suppliers, employees, among others, CSR challenges economic rationality, understood as a maximization of individual utilities. CSR is best described under the Aristotelian conception of rationality, i.e. phronesis. Actually, phronesis is the practical wisdom that relates individual interest with the collective. From this conception of rationality the main claim of CRS – to consider others’ interests in economic deliberation – not only follows necessarily the reasoning of any business agent, but also coheres easily with moral theory if this is defined from an Aristotelian perspective rather than from a utilitarian or deontological perspective.

Roughly, if utilitarianism implies the maximization of well-being of the majority, it is ethically acceptable to discriminate some stakeholders in order to increase the well-being of the majority (e.g. employees vs. clients). On the other hand, besides the well-known issue of the possibility of comparison utilities, utilitarianism does not offer a rule to choose utilities of equal value. From a deontological perspective not only is it hardly acceptable to link corporate social responsibility with profit – ethical claims are not compatible either with the consideration of consequences of our practices or non moral considerations – but also Kantian deontology does not offer a rule to decide about competing duties. From moral deontology corporate agents can face the dilemma whether to increase profit and neglect CRS or to be socially responsible and to ignore profit.

Facing these difficulties, I argue in my paper that not only does CSR cohere better with the Aristotelian conception of morality, grounded in phronesis, than with others normative ethical theories, mainly utilitarianism or Kantian deontology, but also that under Aristotelian ethics CSR is at the heart of an agent’s practice in corporations.

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Notes

  1. 1.

    “A primary stakeholder group is one without whose continuing participation the corporation cannot survive as a going concern” (Clarkson 1995: 106).

  2. 2.

    Secondary stakeholders are “those who influence or affect, or are influenced or affected by, the corporation but they are not engaged in transactions with the organization and are not essential for its survival” (Clarkson 1995: 107).

  3. 3.

    Levitt (1958) clearly acknowledged that challenge when, against the idea that under corporate social responsibility “(…) profits must be merely adequate, not maximum” (Levitt 1958: 42), he proclaimed that “the business of business is profits” (Levitt 1958: 42).

  4. 4.

    www.theguardian.com/…/ikea-apologises-removing-women-saudi-arabia-catalogue (accessed on 23 November, 2013).

  5. 5.

    www.wsws.org/en/articles/2003/05/kade-m16.html

  6. 6.

    www.nytimes.com/…/report-on-Bangladesh-building-collapse-finds-widespread-blame.html

  7. 7.

    http://wordsmith.org/words/buridans_ass.html

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Authors and Affiliations

  1. Instituto de Filosofia da Linguagem (IFILNOVA), Faculty of Social and Human Sciences and Nova Business School, New University of Lisbon, Lisbon, Portugal

    Regina Queiroz

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  1. Regina Queiroz
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Editors and Affiliations

  1. London Guildhall Faculty of Business and Law, London Metropolitan University, London, United Kingdom

    Samuel O. Idowu

  2. Department of Media, Cognition and Communication, University of Copenhagen, Copenhagen, Denmark

    Claus Strue Frederiksen

  3. Economics and Administration Sciences, Marmara University, Beykoz Istanbul, Turkey

    Asli Yüksel Mermod

  4. University of Copenhagen, Copenhagen, Denmark

    Morten Ebe Juul Nielsen

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Queiroz, R. (2015). The Importance of Phronesis to Corporate Social Responsibility. In: Idowu, S., Frederiksen, C., Mermod, A., Nielsen, M. (eds) Corporate Social Responsibility and Governance. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-319-10909-1_14

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