What is social responsibility?
Wouldn’t it be nice if all businesses and companies have a social responsibility and that they should also act in a way that also benefits society? Yes, raising the shareholder value is essential, but so are other factors. Investors and consumers who want investments that do not only wield profits but also contribute to the betterment of society and the environment will find companies who also prioritize social responsibility. But of course, everyone will not have the same opinion. Some say that it is normal for businesses not to consider the public as a stakeholder.
Social responsibility refers to entities’ and individuals’ obligation to act in the best interest of society and the environment. While this is more like a broad term, the specific one we use for business is corporate social responsibility. It is a comforting thought that more and more companies are recognizing and several of them are already willing to comply and shift social norms.
The theory and the policies
The most significant part of this theory is to follow policies that promote a balance between profitability and benefits for society. What are these policies anyway? They can be any one of these commissions: money donations, time, and resources. They can also be one of these omissions: go green initiatives or EPA regulations. Today, several companies have already adapted green policies, and they consider social responsibility an essential part of their business models. They made it possible without sacrificing their profitability. Some examples of these companies include Lego group, Microsoft, and Google.
The public and different companies’ take on social responsibility
It is true that many companies already find social responsibility necessary, some still do not. So, many investors and customers are now meticulous with the companies they engage with and the social responsibility that they practice. Unlike before, they already look at the impact of the companies on the community before deciding to make a decision. In a sense, we can say that having a social responsibility benefits society and is also good publicity for the company that follows the policies. So, if a company has a social responsibility, is it not the same as increasing the shareholder value, which is also their prime directive? Whatever a company decides to do, it will carry on until the next generations. In a nutshell, social responsibility is a good business practice, and not following it can hurt the balance sheet.
Companies should take social responsibility because it is a requirement. It should be a voluntary action. It should not be a public act, but something genuine so it is effective. It may boost company morale if it listens to employees about social issues around them.
Others beg to disagree.
As we mentioned, some may not agree with one idea. Milton Friedman is an economist who said that people could have a social responsibility, but businesses cannot. Some say that social responsibility defeats the very purpose of business which is profit above all else.