The Importance of Phronesis to Corporate Social Responsibility

Abstract

Accepting that corporate social responsibility (CSR) demands that when deliberating about business any economic agent ought to take into account the interests of all stakeholders, i.e. clients, consumers, suppliers, employees, among others, CSR challenges economic rationality, understood as a maximization of individual utilities. CSR is best described under the Aristotelian conception of rationality, i.e. phronesis. Actually, phronesis is the practical wisdom that relates individual interest with the collective. From this conception of rationality the main claim of CRS – to consider others’ interests in economic deliberation – not only follows necessarily the reasoning of any business agent, but also coheres easily with moral theory if this is defined from an Aristotelian perspective rather than from a utilitarian or deontological perspective. Roughly, if utilitarianism implies the maximization of well-being of the majority, it is ethically acceptable to discriminate some stakeholders in order to increase the well-being of the majority (e.g. employees vs. clients). On the other hand, besides the well-known issue of the possibility of comparison utilities, utilitarianism does not offer a rule to choose utilities of equal value. From a deontological perspective not only is it hardly acceptable to link corporate social responsibility with profit – ethical claims are not compatible either with the consideration of consequences of our practices or non moral considerations – but also Kantian deontology does not offer a rule to decide about competing duties. From moral deontology corporate agents can face the dilemma whether to increase profit and neglect CRS or to be socially responsible and to ignore profit. Facing these difficulties, I argue in my paper that not only does CSR cohere better with the Aristotelian conception of morality, grounded in phronesis, than with others normative ethical theories, mainly utilitarianism or Kantian deontology, but also that under Aristotelian ethics CSR is at the heart of an agent’s practice in corporations.