Summary: Empirical studies have long since shown that corporations can “do well by doing good”. In this article, Claus Dierksmeier investigates into the reasons why. Companies with good moral policies are better positioned for the challenges of the 21st century and the global economy. The reason is simple: Corporations that critically reflect upon the quality of their standards will feel the pulse of social expectations sooner. Hence, they are better positioned to practice a proactive values management. Accepting criteria beyond the realm of mere legality, they are prone to engage in a dialogue with their stakeholders, and so they are more likely to recognize the wind of change.

In the past, business was one thread within the social fabric, firmly interwoven with, and regulated by, other social systems. In the last thirty years, many companies withdrew from their public responsibilities. This, however, is disadvantageous to the corporations themselves, as it undermines the conditions for their future operations. Costs of litigation are high and expropriations are a threat to be reckoned with.

Moral management reduces the risks of litigation and scandal. Over time, a reputation for corporate social responsibility also boosts productivity, as it helps gain and retain motivated employees, attracts investors with long-term interests, creates customer loyalty and durable alliances with business partners and governmental agencies. Today especially, business operates in the midst of conflicting religions, cultures, and traditions. In order to act as conflict absorbing (and cost-reducing) as possible, business needs to understand and respond to the social systems that surround it.

A moral transformation of corporate culture pays off also through the “respect” and “trust” it generates. Goodwill on part of society, voluntary assistance by citizens, information sharing with the government, culture building in alliance with corporate partners and the like have a strong budgetary impact. Such cooperation cannot be fashioned “ad hoc”, though, as it grows from conditions of mutual recognition. These in turn presuppose moral acknowledgment. For a corporation, to cultivate the responsibilities that come with its size, power, and influence is hence smart policy.

by Prof. Dr. Claus Dierksmeier, Philosophy Department Stonehill College, 320 Washington St., Easton (Boston), MA 02357, USA, cdierksmeier@stonehill.edu