Social Responsibility and Accountability: Summary

by Manfred Davidmann

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Contents

Social Responsibility and Accountability

Social Responsibility of Those Who Govern, Direct, Lead or Manage

Countering Antisocial Behaviour

Social Benefits and Costs

Worldwide

References {..} and Links to Relevant Works


Relevant Subject Index Pages and Site Overview



Social Responsibility and Accountability

Manfred Davidmann's comprehensive and relevant study of 'Social Responsibility, Profits and Social Accountability' {1} had almost immediate impact when it was published. This was the first time that incidents, disasters and catastrophes were put together as individual case studies and reviewed as a whole.

The report analysed and clearly described basic causes such as socially irresponsible behaviour, and what had to be done to solve the problem. The points were made so convincingly that, for example, it made people aware that public demonstrations and public protests by concerned groups were an essential survival mechanism under end-of-twentieth-century conditions.

His analysis was published in 1981 and what was first stated in the report has become common knowledge and is being followed by people worldwide. Many people are now struggling to achieve the aims first stated in that report and we now see a worldwide struggle to achieve social accountability.

The aims he stated included:

Open decision-taking at all levels of national and local government and business.

Free access to all relevant information.

That independent and well-informed community representatives should be present in all decision-taking organisations, to keep the community informed about what was being discussed and decided.

Establishing ways of what has since been called whistle-blowing, of being able to inform the community of decisions and all matters which are against the public interest. Also establishing ways of protecting, supporting and providing back-up for whistle-blowers.

That the social costs of company or government proposals have to be taken into account when taking decisions and certainly before decisions are implemented.

Holding accountable those in responsible positions, such as company directors and members of government.

That patients, and hence the whole community, had to find ways of assessing the performance of doctors.

Manfred Davidmann established the maxim that government will only act under the pressure of informed public opinion, and that access to the media was essential for concerned pressure groups and individuals.

At our level of scientific and technological development, the problems facing us now and those likely to face us in the future can be resolved and overcome only by a much more highly developed sense of social responsibility accompanied by far greater accountability on the part of those who direct, lead or manage. And so what follows has been extracted from the much more comprehensive and detailed report {1} which explores the subject in greater depth while discussing a number of wide-ranging and relevant case studies of incidents, disasters and catastrophes.


Social Responsibility of Those Who Govern, Direct, Lead or Manage

The purpose of enterprises is to satisfy the needs of the community. 'Profit motivation' and 'free competition' are supposed to direct effort into areas and directions most needed by the community. {17}

Decisions taken by directors and managers affect the community, the quality of life and indeed the safety, health and life of people in a widening area. The interests of the community have to be taken into account when taking decisions.

What matters is the value of the service to the community. The measure of success is not the profit or gain accruing to the owners, no matter whether private or the state, but the gain to the community. The profit any enterprise makes is the gain which accrues to the community and the social cost of any operation has to be taken into account.

So in the end directors and managers are working for the community and when we are talking about the 'social responsibilities of directors and managers' we are referring to their responsibilities towards society, that is towards the community.

In other words, directors and managers, instead of being responsible largely only to the owners for the extent to which they contribute to profits, are responsible to the community for what they do, and accountable to it for the way they do their work and for the resulting consequences.


It follows that important positions need to be filled by those to whom the community matters.


Countering Antisocial Behaviour

Many fires are started by socially irresponsible behaviour, by carelessness or accident, but are noticed in time and are put out before too much damage results. What frightens us is that the fire brigade can arrive too late to control the fire, that one socially irresponsible act may drastically and irreversibly condemn future as yet unborn generations, that one incident can start a sequence of events which could make this planet uninhabitable for human beings.

No matter how small the chance, there are some risks which one simply cannot take. In this category comes our future, and we have already been taking undue risks with the unborn child, with the next generation, and the future of all humanity.


Those who wish to maximize profits regardless of the cost to the community are restrained by the fear of likely consequences to themselves. It follows that the consequences need to be severe enough to act as a deterrent and that legislation which aims to protect the community has to be enforced. When government fails to install and apply the required legislation effectively then it is likely to reconsider its policy following country-wide dissent and protest.


When we are talking about a company, enterprise or other organisation then we are referring to the people who direct it and their employees, about their decisions, their actions and the resulting consequences. The same applies when we talk about 'government'.

What stands out is that it is not just manufacturers and suppliers who are being taken to court for socially irresponsible behaviour, but also government and government agencies for failing to protect the people. It is those concerned with taking the relevant decisions and those concerned with testing, marketing and application who are being taken to court.


Compensation payments may be large but the payment of compensation, particularly from a government, amounts to little more than insurance which spreads the cost among many and in this way reduces the risk to those responsible. On the other hand the community wishes to hold accountable those who should have acted for the community, who should have protected the people.

Those who were careless or negligent, thoughtless or irresponsible should be held accountable for having failed to protect the community and for the harm done.

It is those who should have enacted protecting legislation before people were injured, before people were made to suffer, who should be held collectively and individually responsible for the consequences of doing what they did and for omitting to do that which they should have done.

It is not just the company or organisation but the people who took part in the decision-taking process who are responsible and thus accountable and the same would apply to government.


It is probable that stronger sanctions would need to be available to prevent selfish or careless behaviour from harming the community. The possibility of adverse publicity or of making service records available to the public could serve as a deterrent for preventing irresponsible and antisocial behaviour, may prevent incidents of the kind described and discussed in 'Social Responsibility, Profits and Social Accountability' {1}.


What stands out is that organisations cannot be relied on to act responsibly but that they do so as the result of pressure from the people. And if government only acts to protect the community as a result of pressure from the community, then there have to be ways and means for creating such pressure. There have to be ways and means for all to have access to the mass media and so to the people. The facts have to become known.

But how can one ensure that those in important positions become aware that they are accountable to the community and how can one make them accountable to the community?

One method may be through publicising the names of those who took the relevant decisions, who condoned the decisions and the resulting actions, who carried them out, who failed to stop them from being carried out.


There has come a point at which the interests of the community must and do take precedence over the politics of power and the interests of the owners. For this to happen, people need to act and co-operate with each other by forming pressure groups to impress the leadership with the strength of the feeling of people locally or country-wide, by getting publicity, by using the courts and by demonstrating to get the required legislation where it does not exist already, and when necessary by demonstrating to have existing legislation enforced so as to hold those accountable who fail to act for and to protect the interests of the community.


Social Benefits and Costs

The social benefits and costs of any operation have to be taken into account. The gain any enterprise or organisation makes is that which accrues to the community.

But just how is the balance drawn, to what extent are social benefits and costs included in the economic analysis of alternative proposals or schemes?


Responsible leadership aims to eliminate needs so as to eliminate exploitation through needs, wants the highest possible standard of living for the people.

And since people are exploited through their needs one has to eliminate the need to struggle for survival, for mere existence.

However, there are criteria other than personal income, such as security from internal and external threats and the standards of living, housing, health service and education of the population.

And there is the question of the extent to which benefits of a benevolent social system may need to be reduced as a penalty for those who are socially irresponsible.


Purifying effluent increases costs and so reduces profits. Hence discharging unpurified effluent is more profitable to the producer but the community has to suffer the consequences. Manufacturers and suppliers tend to increase their profits by passing on to the community the social costs of their operations, costs such as disposal of packaging and waste, of redundancy and unemployment when transferring operations to countries with lower wages or fewer environmental safeguards.

However, the interests of the community have to be taken into account when taking decisions. Such social costs need to be allowed for when taking decisions, need to be charged to the enterprise or organisation which is causing them.


Worldwide

We wish to achieve the highest possible standard of living and quality of life, locally, country-wide and worldwide. Hence we should eliminate starvation, malnutrition, poverty and need, and provide social services and social security, freedom and independence to those who are so much less fortunate than the rich and powerful. Mass unemployment and income inequality need to be eliminated. Equality needs to be aimed at and achieved.

A community's interests would seem to be best served by sharing its high and increasing standard of living with others less fortunate, and by doing this in ways which eliminate poverty and need and the resulting exploitation.

But such assistance and progress should go hand-in-hand with the spread and acceptance of an ideology such as that put forward here so that the benefits of any redistribution of wealth and income from rich to poor countries benefits the poor and needy people and not the rich and powerful rulers. In other words, assistance and aid should benefit the people and not the authoritarian minds which oppress and exploit them. {3, 18}

In return for assistance and aid there needs to be some sort of lasting commitment to democracy and to the application of democratic principles. People need to make the effort, have to work their way up and struggle for democracy and freedom, both internally and by international co-operation and commitment to democratic principles.


References and Links to Relevant Works

Includes other relevant current and associated reports by Manfred Davidmann        
         
         
    Title   Description
         
{ 1}   Social Responsibility, Profits and Social Accountability     Incidents, disasters and catastrophes are here put together as individual case studies and reviewed as a whole. We are facing a sequence of events which are increasing in frequency, severity and extent. There are sections about what can be done about this, on community aims and community leadership, on the world-wide struggle for social accountability.
         
{ 2}   Work and Pay, Incomes and Differentials: Employer, Employee, Community   Major review and analysis of work and pay in relation to employer, employee and community. Provides the underlying knowledge and understanding for scientific determination and prediction of rates of pay, remuneration and differentials, of National Remuneration Scales and of the National Remuneration Pattern of pay and differentials.
         
{ 3}   The Will to Work: What People Struggle to Achieve   Major review, analysis and report about motivation and motivating. Covers remuneration and job satisfaction as well as the factors which motivate. Develops a clear definition of 'motivation'. Lists what people are striving and struggling to achieve, and progress made, in corporations, communities, countries.
         
{ 4}   How the Human Brain Developed and How the Human Mind Works   Describes clearly what happens while sleeping, role of dreaming, meaning of dreams. Functioning of the two halves of the human brain is related to the autonomic nervous and the immune systems. Shows how human behaviour is affected by primitive instincts.
         
{ 5}   Exporting and Importing of Employment and Unemployment   Discusses exporting and importing of employment and unemployment, underlying principles, effect of trade, how to reduce unemployment, social costs of unemployment, community objectives, support for enterprises, socially irresponsible enterprise behaviour.
         
{ 6}   Creating, Patenting and Marketing of New Forms of Life   Evaluates problems in genetic manipulation, and consequences of private ownership of new life-forms by multinationals. Lists conclusions and recommendations about man-made forms of life, their ownership and patenting, about improving the trend of events.
         
{ 7}   Directing and Managing Change   How to plan ahead, find best strategies, decide and implement, agree targets and objectives, monitor and control progress, evaluate performance, carry out appraisal and target-setting interviews. Describes proved, practical and effective techniques.
         
{ 8}   Multinational Operations: Transfer Pricing and Taxation   One of the most controversial operations of multinationals, transfer pricing, is clearly described and defined. An easily-followed illustration shows how transfer pricing can be used by multinationals to maximise their profits by tax avoidance and by obtaining tax rebates. Also discussed is the effect of transfer pricing on the tax burden carried by other tax payers.
         
{ 9}   What People are Struggling Against: How Society is Organised for Controlling and Exploiting People   Report of study undertaken to find out why people have to struggle throughout their adult lives, in all countries, organisations and levels, to maintain and improve their standard of living and quality of life. Reviews what people are struggling against.
         
{10}   Ownership and Limited Liability   Discusses different types of enterprises and the extent to which owners are responsible for repaying the debts of their enterprise. Also discussed are disadvantages, difficulties and abuses associated with the system of Limited Liability, and their implications for customers, suppliers and employees.
         
{11}   Ownership and Deciding Policy: Companies, Shareholders, Directors and Community   A short statement which describes the system by which a company's majority shareholders decide policy and control the company.
         
{12}   Co-operatives and Co-operation: Causes of Failure, Guidelines for Success   Based on eight studies of co-operatives and mutual societies, the report's conclusions and recommendations cover fundamental and practical problems of co-ops and mutual societies, of members, of direction, of management and control. There are extensive sections on Style of Management, decision-taking, management motivation and performance, on General Management principles and their application in practice.
         
{13}   John Lewis Partnership PLC   John Lewis Partnership (23 department stores, 112 supermarkets) is successful and expanding. A good profit-sharing scheme is combined with open management. This study looks at profitability, at extent of service to partners, and at style of management.
         
{14}   Family, Sex and the Individual; Women's Liberation, Feminism and Community   This report investigates casual sex and its effects on individuals, family and community. It examines the role of the family in bringing up children and relates dominance and confrontation within the family to that in the working environment.
         
{15}   MOTIVATION: Summary   Reviews and summarises past work in Motivation. Provides a clear definition of 'motivation', of the factors which motivate and of what people are striving to achieve.
         
{16}   Inflation, Balance of Payments and Currency Exchange Rates   Reviews the relationships, how inflation affects currency exchange rates and trade, the effect of changing interest rates on share prices and pensions. Discusses multinational operations such as transfer pricing, inflation's burdens and worldwide inequality.
         
{17}   Corrupted Economics and Misleading Experts   Shows how 'Economics' is used to misinform and mislead the general public. Clearly states underlying considerations of specific important economic relationships and comments on misleading political interpretations and on role of independent experts.
         
{18}   Democracy Under Attack: Top-level Leadership and Decision-taking   Discusses and illustrates the internal struggles taking place in political parties and all other organisations, for achieving greater democracy and against those wishing to overpower democratic processes of decision-taking.
         
{19}   Community Economics: Principles   Allows for basic causes of real-world problems, including sections on owners, directors and managers, actual rewards and differentials, social responsibility, social costs and accountability, misuse of the system, irresponsible behaviour, motivation.
         
{20}   Style of Management and Leadership   Major review and analysis of the style of management and its effect on management effectiveness, decision taking and standard of living. Measures of style of management and government. Overcoming problems of size.

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Relevant Subject Index Pages and Site Overview


The Site Overview page has links to all individual Subject Index Pages which between them list the works by Manfred Davidmann which are available on the Internet, with short descriptions and links for downloading.

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Copyright    ©    2002    Manfred Davidmann
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History
30/01/02 Work Completed
22/03/02 To Website