Corporate Social Responsibility & Why Good People Behave Badly in Organizations

by Laura Agadoni

Corporate responsibility is the practice of businesses giving back to the community. To understand why there is a need for this and why so-called good people behave badly in business, take note of what psychologist Erich Fromm says: "Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction." You need think no further than Jeffrey Skilling of Enron or Bernie Ebbers of WorldCom, two corporate criminals, to realize the truth of Fromm's observation.

Forms of Corporate Responsibility

Corporations are in business to make profits. However, there are various reasons company would give back to its community. Often many employees of a company live in the surrounding community, and feel responsibility to help. At the same time, it can also be good publicity for company. Corporate responsibility can take many forms, from sponsoring a neighborhood Little League team to running nonprofit organizations.

Tell People What You Do

Many people in polite society believe it is tacky to talk about your own good deeds. But it's good for a company's reputation if the public is aware of the its corporate good will. When you engage in any type of corporate responsibility program, tell people about it through a press release. You can also communicate your message through social networking sites like Facebook or Twitter. These are good avenues for getting immediate feedback for your efforts.

Corporate Criminals

Why people behave badly in organizations is as varied as the people who behave badly. In the 1980s, insider trading was rampant; the 1990s saw creative accounting and financial fraud from executives who received stiff prison sentences. The early 2000s saw Goldman Sachs earning profits during the subprime mortgage fiasco by betting that its investments would fail.

Government Regulations

When it comes to business, Congress can pass regulations such as the Sarbanes-Oxley Act of 2002 to make companies accountable for their actions. However, some argue that these types of regulations take the bite out of business. Too much governing can cause businesses to take fewer risks.

Photo Credits

  • Comstock Images/Comstock/Getty Images