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Large businesses are keen to stress their credentials as good corporate citizens. They wish to be seen as caring employers, playing a part in supporting the communities in which they operate and behaving responsibly towards the environment. Much of this concern can probably be explained in terms of public relations, but whether it can or not company managements are undoubtedly required to make decisions that involve genuine ethical and social-policy choices. In an economy dominated by a comparatively small number of large enterprises the way in which managers make these choices affects us all. Whether decision-making in public companies should be guided purely by considerations of profit or should take account of the interests of third parties and social welfare more generally has been debated at least since Berle and Means raised the issue in 1932. In recent years there has been a resurgence of interest in this and related questions, manifested, for example, in a growing literature on corporate social responsibility, the creation of a number of chairs in corporate responsibility in British business schools, and the foundation of organizations such as Business in the Community to encourage social involvement. Of the numerous explanations for this growth in interest three stand out. The first is an awareness of impending ecological crisis. It may be that merely strengthening regulatory controls will be an insufficient response to the problems of environmental degradation. A shift in attitudes towards the environment on the part of management, involving a reassessment of company objectives, may be necessary as well. Second, changes in the structure of the economy, resulting in part from technological advance and increased international competition, have contributed to persistent unemployment, particularly in large urban areas. The ability of business to make a direct impact on unemployment has focused attention on the possibility of private solutions to this and other economic and social problems, especially against the background of a government ideology unsympathetic to state intervention. Finally the collapse of communism in Eastern Europe, as well as pointing up the merits of the market system, has also raised some questions about the virtues of corporate capitalism. It has created opportunities for western businesses to expand their empires, but whether this is the most appropriate response to the challenges presented is subject to dispute. There may also be implications at home. With the abatement of the ‘external threat’ we may feel more comfortable about re-evaluating capitalist institutions, questioning the legitimacy of private power, and demanding increased accountability on the part of corporate leaders.
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