Socially Responsibility of Business
Socially Responsibility of Business
Socially Responsibility of Business
Social responsibility, in the context of business, is an ethical theory that the business has a responsibility to society beyond the traditional boundaries of the business itself. It is good business to be socially responsible. Not so much for business but for all of those involved.
The merits of the economic and the socioeconomic models have been debated for years by business owners, managers, customers, and government officials. Each side seems to have four major arguments to reinforce its viewpoint. Proponents of the socioeconomic model maintain that a business must be more than simply seek profits to support their position.
Oil, gas and mining companies were amongst the first to seriously consider these issues within their business strategies, but it has taken a fast track beyond strategies. Many more industry related companies are jumping onto the bandwagon in Socially responsible investment and business management.
There are many CSR initiatives running around the world representing the different corporations working across the globe. Earlier the purpose of the CSR department was totally different. It was not intended to bring up the name of the company. It was one of the most hated and difficult departments of the corporation to be in.
One way to distinguish your business as an ethical organization is to join the Better Business Bureau (BBB), a private, nonprofit business group whose members agree to maintain specific standards for operating ethically and for addressing customer complaints. The BBB's Web site is packed with information about the organization, its member businesses, and its programs that will benefit businesses and consumers alike.
One common misunderstanding about the concept of social responsibility has to be clarified here. It does not counter profit the objectives of business. It does not say that "to make profit is to sin. "Profiteering is different from profit making. Selfish interest is different from self-interest. Social responsibility is against profiteering and selfish business behavior.
Instead, companies should maximize their profits and return capital to shareholders so that individuals could then donate to whatever cause they wished to, or not. For companies to do anything besides maximize profits was simply immoral, Friedman wrote.
I also believe that a business should behave ethically in achieving the above purpose. It is not right just to operate within the letter of the law. Businesses should also try and serve their local community and help its employees lead better lives. They should examine every decision they make based on profitability, long term business value and social responsibility.
Nothing builds brand loyalty among today's increasingly hard to please consumers, like a company's proven commitment to a worthy cause. Other things being equal many consumers would do business with a company that stands for something beyond profits. In nutshell, CSR and cause related marketing results in increased sales, visibility, and consumer loyalty and enhanced company image along with positive media coverage.
Corporate Values reflect a company's culture. The values make that the culture is to be communicated which is a difficult task. To understand a suitable value statement for a company, one should understand what culture is and whether the statement really represents the culture of the company.
The following best practices have been actively used by businesses for social responsibility in order to enhance their responsibility activities. The first is the inclusion of issues in assessing risk models. Another is to determine a social issue's impact on cost and revenue.
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