One aspect of goals that needs closer attention than it currently enjoy is the question of ethics. The issue comes under the general heading â€˜corporate social responsibilityâ€™ which embraces a number of different meanings.
A first distinction we might make is between actions judged permissible versus those judged impermissible from an ethical or moral point of view. This judgment might be made by asking whether a corporate harms innocent people, keeps promises, shows gratitude, acts in just ways and provides reparations to those harmed by its actions. Further, we might distinguish between two types of permissible action, that which is supererogatory or virtuous and that which is morally neutral.
Based on these notions, one author proposes a four cell matrix that categories a company according to their involvement or non-involvement in virtuous and impermissible behavior. The four possibilities are:
1.Firms that engage in behavior that is both permissible virtuous;
2.Firms that engage in behavior that is both permissible and morally neutral;
3.Firms that engage in behavior that is both impermissible and virtuous;
4.Firms that engage in behavior that is both impermissible and morally neutral.
One can argue about whether firms with good records of social responsibility perform better or worse than firms with poor records of social responsibility. Current evidence suggests no relationship between the two factors. Attempts to measure the success of ethical firms compared to that of other firms have produced questionable results. However, these authors do cite as potential evidence the performance of the so called socially responsible mutual funds. These funds, which invest only in good corporate citizens, are typically not as other funds in the short run.
Considerable interest has been focused on the relationship between organizational size and performance, about which there is a raging debate. This research is based on the interest economists have in organizational economies of scale. They want to find the optimum size for a firm the one that result in the lowest cost per unit of production. Some researchers find that small organizations produce the best economies of scale, others identify large organizations as the most effective and still others point to medium sized firms. Academic researchers have also reported contradictory findings on the size performance relationship.