Introduction
As firms realize their societal duties, corporate social responsibility has grown. This article will examine W. R. Grace & Co., a worldwide chemical and manufacturing firm, and its corporate responsibility practices. The stakeholder theory, triple-bottom-line sustainability theory, and externality argument will be applied to the company’s history. It will also address how corporate leaders should prioritize these four tasks and how W. R. Grace has performed.
The Specific Theory of Corporate Social Responsibility
Legal Responsibility for Business Leaders
Business leaders should stress economic responsibility, ensuring that their organizations are successful. Likewise, charitable responsibility, in which businesses assist activities and organizations that enhance their purpose and values, should be encouraged. Economic responsibility is more important than other obligations since it is the cornerstone of every successful firm. Legal accountability is also essential since noncompliance with relevant laws may result in significant fines and unfavourable publicity.
Grace Response
W. R. Grace certainly met his corporate social responsibility requirements. He was a successful businessman who was also a generous philanthropist. Enormous food contributions to home in Ireland to alleviate hunger and established the Grace Institute, a tuition-free school for underprivileged immigrant women. He was also active in municipal affairs, having been elected Mayor of New York City and personally receiving the Statue of Liberty from a French delegation. While heading the corporation, his grandson J. Peter Grace served as president of the Grace Institute.
Company Response
In the 1980s, the W.R. Grace Company failed to meet its commitments. Economically, the firm neglected to accept responsibility for the environmental harm caused by its Woburn, Massachusetts, factory. Legally, the corporation was judged accountable for the pollution and was forced to pay millions in civil litigation and legal expenses. From an ethical standpoint, the firm ignored its obligation to safeguard the health and safety of Woburn residents. From a philanthropic one, it refused to accept responsibility for the repercussions of its conduct.
The Triple-Bottom-Line Theory of Corporate Responsibility
Triple Bottom Line Theory
Within the triple-bottom-line philosophy of corporate responsibility, sustainability indicates that businesses should seek to make their activities economically prosperous, socially fair, and ecologically sound. Businesses should seek to preserve their financial health and stability via solid business practices to achieve economic sustainability (Farooq et al., 2021). Companies should ensure that their operations are fair and helpful to all stakeholders, including workers, customers, and the local communities in which they operate, to achieve social sustainability. Environmental sustainability implies that companies should seek to lessen their environmental effects and strive for a more sustainable future via pollution reduction and resource conservation strategies.
Steps Taken to Ensure Economic Sustainability
The company is taking measures to handle the economic, social, and environmental repercussions responsibly and ethically. A corporation would seek economic sustainability by being profitable and competitive over the long term and creating economic possibilities for its workers and communities (Schmitz, 2012). A corporation would seek social sustainability by making a good social effect in its local community by offering training and education opportunities, supporting diversity and inclusion, and creating a safe and healthy work environment (Farooq et al., 2021). A corporation would aim to decrease its environmental footprint and safeguard resources by minimizing waste, saving energy and water, and lowering pollution to achieve environmental sustainability.
Social, Environmental Sustainability and Dumping as Unethical
The W. R. Grace Company has made many initiatives to become more financially viable. For example, in 1955, the firm became public, allowing it to raise funds and expand its activities. Despite this, the firm moved its emphasis from shipping to chemical manufacturing, allowing it to diversify its operations and improve earnings. W. R. Grace has made a variety of initiatives to promote social sustainability. W. R. Grace, for example, was a philanthropist who established the Grace Institute, which gave tuition-free education to underprivileged immigrant women. The concept of maintaining the environment and natural resources while avoiding waste and pollution is known as environmental sustainability. Toxic trash dumping in Woburn is unethical in terms of environmental sustainability.
Stakeholder Theory
Everyone interested in the success of a company or initiative is considered a stakeholder. Suppliers, consumers, workers, investors, the community, and the general public are all stakeholders. Companies may guarantee that their activities serve their stakeholders by knowing their demands (Schmitz, 2012). Consumers, suppliers, and all stakeholders were critical at Grace’s 1800s New York headquarters. Customers expected on-time delivery, while suppliers wanted fair payment and employees need both job stability.
Local inhabitants, environmental activists, government agencies, chemical product consumers, and raw material suppliers have all been involved in Grace’s recent history. W. R. Grace Corporation stakeholders include the Grace Institute and its trainees since they are vested in the company’s success (Farooq et al., 2021). Profitability aids the Institute in obtaining funds and support. The Institute’s free training encourages women to join the labor field, which benefits the company’s development. If the chemical company makes money, it may be ecologically irresponsible and sponsor the Grace Institute. The Institute’s advantages exceed the hazards posed by the chemical firm.
The Moral Requirement Argument
The W. R. Grace Company exemplifies how businesses might have a moral imperative to operate in the public interest. In many respects, the moral necessity argument applies to this situation. Corporations such as W. R. Grace are already immersed in the larger social environment and the ethical quandaries that define it. Throughout its history, W. R. Grace has been involved in charity and civic participation (Schmitz, 2012). Well-established, profitable, and vigorous firms such as W. R. Grace may play a crucial role in effectively settling broad societal issues. W. R. Grace’s lengthy history of accomplishment has significantly impacted the United States’ social and economic scene.
The Externality Argument in Favor of Corporations Having Ethical Obligations in the World
The externality argument for companies having ethical responsibility in the world is founded on the premise that businesses may influence people other than their owners, shareholders, suppliers, and consumers. This influence may be favorable or harmful, and organizations must ensure that their activities do not damage others. W. R. Grace has a moral duty to guarantee that its acts did not hurt the inhabitants of Woburn. Instead of taking measures to protect the town’s water supply, the firm prioritized its interests.
Conclusion
The W. R. Grace Company exemplifies how corporations should be held to a higher moral standard. Its track record of success demonstrates that a corporation may be profitable while simultaneously contributing to society. Any company leader should prioritize economic, legal, and ethical responsibilities. Moreover, firms should aim for sustainability by considering their economic, social, and environmental implications. Ultimately, while making choices, organizations should consider stakeholders and the externalities of their activities.
References
Farooq, Q., Fu, P., Liu, X., & Hao, Y. (2021). Basics of macro to micro level corporate social responsibility and advancement in triple bottom line theory. Corporate Social Responsibility and Environmental Management, 28(3), 969–979. Web.
Schmitz, A. (2012). Business Ethics (2nd ed.). Saylor Academy.