Any business is a political institution, an educational institution, an economic institution, a legal institution or an economic institution; at the core crux, every business is a social institution. Hence a business should realize its power as a social institution and exercise its due diligence and act responsibly towards the society. It is the moral responsibility of any institution to act responsibly towards the society which ultimately gives its return in the form of profits for the organization. Also, the societal power that a firm has is not only built by internal factors, but it is a sum total of internal as well as external factors. It is a vicious circle of events that defines an institution and ultimately every institution is created for the society and by the society. This it is the fundamental duty of any institution to maintain the integrity of the society and take ownership and responsibility for its deeds and its impact on the society. Thus the theory implemented by the firm is the Utilitarianism theory (Posner, 1979).
Society- whenever we hear of this term, the feeling is quite different from what it used to be a few decades ago. Earlier, it aroused a sense of belongingness, a feeling of a bond between the members who were part of a closed group. The meaning has however changed manifold now. Society is no longer associated with a feeling of connection. It has become just a hollow phrase used in meaningless conversations over a cup of coffee. Today, people do not want to get associated with something that makes them liable to follow a set of acceptable norms or practices. Today’s youth is self-centred. They would go to any extent to fulfil their narrow personal motives. Today’s youth is part of an individualistic society in which fulfilment of self-interest is the primary purpose. What is this leading to? It is leading to the demise of the specie called human kind. God made man as a social animal. Man was supposed to help, support and build relations with each other. However, this race of human kind is evolving into a different species. The “human” aspect from this race is deteriorating. We need to realize this fact and work upon it before it is too long. We need to understand what the purpose of our existence and act according to it. Human kind should understand that he was born to live in a society, share and utilize its resources, and then give back to the society whole-heartedly. Humans should help in the development of the society along with their own development and help and guide the future human race as well to ultimately help in the upliftment of the society from where they evolved. And this should be undertaken not as a moral obligation but as a fundamental moral responsibility (Bottomley, 1997).
By promoting the theory of corporate constitutionalism, one can hope to revive the society through the corporate world. Since today’s world has become materialistic and believes in business only, we have to harness the power of businesses and institutions to revive the society and bring a change to it. We can use the power of corporate constitutionalism to revive meaningful work by institution – work that has an impact on the society, work that promotes responsibility among firms for the society. It affirms the age old fact that corporate and institutions have the power to influence the society. Hence, they should exercise responsible behaviours and deeds towards the society. Thus, this theory has been implemented by Macquarie group to address the needs of the society.