Jiminy Cricket for the Corporation: Understanding the Corporate 'Conscience'
40 Pages Posted: 27 May 2008
Historically, the corporation has evolved since the late eighteenth century from a relative few, specially chartered associations, generally organized to complete projects for the public good to the modern profit-making behemoths of modern America. Along the way, corporations have been subjected to regulation, often in response to public outcry against perceived abuses of power. This corporate evolution has also resulted in a general separation of ownership and control, though that is not to say that corporate mangers act completely free from external pressures such as to make a profit. With regard to the corporate "conscience," though corporations do not have one in the traditional sense of the word, the corporation is run by corporate managers who can act based upon their own sense of morals, but that alone does not account for corporate behavior that benefits society as a whole. But corporations do tend to act based upon the decisions of management as they interact with other factors.
This article breaks these factors into three main categories: 1) acts that benefit society which are due to legal compliance; 2) acts that benefit society which also benefit the corporation; and, 3) acts that benefit society based on altruistic (or semi-altruistic for those that do not believe in pure altruism) motives. The article expands on each of these categories by citing to many modern examples and trends such as: employers' decisions to hire illegal immigrants, the popular Red campaign, corporations' decisions to go "green," Chik-fil-A's decision to remain closed on Sundays, and Ben & Jerry's corporate culture.
Ultimately, the article concludes that, though the corporation does not have a "conscience" in the traditional sense, it does have its own form of a conscience influenced by the above three factors. It would be futile, however, to use these factors as a measuring stick on a broad scale, as judgments of "good" or "bad" corporate behavior are highly subjective. Instead, the article aspires to act as a spring board for understanding what is driving a particular corporation's actions, and to utilize this knowledge to curb or direct future behavior.
Keywords: corporate, social, responsibility, conscience, moral, compliance, green
JEL Classification: A14, K20, K29
Suggested Citation: Suggested Citation