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Social responsibility of Business
Kumar BijoyFinancial Consultant
Introduction…
• Social responsibility is a doctrine that claims that an entity whether it is state, government, corporation, organization or individual has a responsibility to society. This responsibility can be "negative," in that it is a responsibility to refrain from acting, or it can be "positive," meaning a responsibility to act.
• It can also imply that corporations have an implicit obligation to give back to society.
social responsibility …
• The responsibility to profitably serve employees and customers in an ethical and lawful manner.
• An organization's obligation to maximize its positive impact and minimize its negative impact on society.
• The concern for the consequences of a person's or institution's acts as they might affect the interests of others, including the environment and involuntary customers.
• The concept that businesses should be actively concerned with the welfare of society at large.
social responsibility …
• A business’s collective code of ethical behavior towards the environment, its customers, its employees, and its investors.
• Ethical obligations to customers, employees, and the general community
• The responsibility of a responsible agent who chooses to participate in a society and acquire the benefits thereof.
Business has a "social conscience"
• its responsibilities for providing:– em ployment– eliminating discrimination– avoid ing pollution and – whatever else may be the catchwords of the
contemporary crop of re formers.
"social responsibility" in his capacity as businessman?
• he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price in crease would be in the best interests of the corporation.
• he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment.
"social responsibility" in his capacity as businessman?
• at the expense of corporate profits, he is to hire "hardcore" un employed instead of better qualified available workmen to contribute to the social objective of reducing poverty
Maximize firm’s profits to the exclusion of all else
Balance profits and social objectives
Do what it takes to make a profit; skirt the law; fly below social radar
Fight social responsibility initiatives
Comply; do what is legally required
Integrate social objectives and business goals
Lead the industry and other businesses with best practices
Do more than required; e.g. engage in philanthropic giving
Articulate social value objectives
SOCIAL RESPONSIBILITY CONTINUUM
Social Responsibility…
• Microfranchises - Enterprise Solutions to Poverty
• Tackling corruption - an integral part of the responsible business agenda
Social Responsibility…
• Principle 1: Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders, and should take their interests appropriately into account in decision-making and operations.
• Principle 2: Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about the risks that they assume because of their involvement with the corporation.
Social Responsibility…
• Principle 3: Managers should adopt processes and modes of behavior that are sensitive to the concerns and capabilities of each stakeholder constituency.
• Principle 4: Managers should recognize the interdependence of efforts and rewards among stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking into account their respective risks and vulnerabilities.
Social Responsibility…
• Principle 5: Manages should work cooperatively with other entities, both public and private, to insure that risks and harms arising from corporate activities are minimized and, where they cannot be avoided, appropriately compensated.
• Principle 6: Managers should avoid altogether activities that might jeopardize inalienable human rights (e.g., the right to life) or give rise to risks which, if clearly understood, would be patently unacceptable to relevant stakeholders.
Social Responsibility…
• Principle 7: Managers should acknowledge the potential conflicts between (a) their own role as corporate stakeholders, and (b) their legal and moral responsibilities for the interests of stakeholders, and should address such conflicts through open communication, appropriate reporting and incentive systems, and, where necessary, third party review.
