• Peter Drucker’s view of social responsibility. Peter Drucker suggests that companies should
ensure that their social responsibilities also become business opportunities. Cohen (2010) cited
that Drucker highlights considerations for workers that are part ofthe responsibility of a corporate
leader just as much as the profits, survival, and growth of the business or organization. Therefore,
he taught that these were the social responsibilities of businesses. As a result, Drucker was also
called a pioneer of business social responsibility. The management thoughts of Drucker about
corporate social responsibility were summarized as follows:
1. Government cannot solve many social problems. Drucker analyzed social issues and
found increasing disenchantment with the government’s ability to successfully initiate
or successfully implement social programs. This suggests that companies may tailor their
program to help eradicate existing social problems while maintaining their business
stability and profitability.
2. The corporate mission comes first. According to Drucker, the organization’s first
responsibility must always be to its own mission regardless of other factors. The first
"social responsibility" of the business is to make a profit sufficient to cover operational
costs in the future. The logic in this is that if the organization failed in its own goals
because of misallocation of time, resources, or personnel in attempting to fulfill a
particular social responsibility, not only would it be prevented from solving any particular
social problem, or future social problems, but would fail society in the organization’s
mission and waste society’s resources. Once the organization failed in its primary
mission, its initiative for social responsibility would go out of existence. So, if this basic "social responsibility" of fulfilling the organization’s purpose is not met, no other "social
responsibility" can be met either.
3. The unlimited liability clause. An unlimited liability clause means that the organization
taking action assumes the responsibility for the future outcome of their initiatives. Most
advocates and consumers view high prices as a social responsibility which must be
addressed and reduced. For instance, Walmart’s low prices brought profit, success, and
cheers from consumers, which eventually brought worldwide legal problems,
governmental interference, and bad press. Walmart was accused of forcing out smaller
local business which could not compete with Wal-Mart’s low prices. Wal-Mart kept
prices down partly by closely controlling and limiting the pay and benefits of its
employees. This scenario suggests that companies must also consider establishing a
balance of responsibilities for all stakeholders.
Question:
Explain and cite a particular scenario of the "Unlimited Liability Clause" Based on Peter Drucker's view of social responsibility.
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