Question

Illustrate with examples the arguments for Social Responsibility?

Answer 1

The following are the main arguments for social responsibility:

Protection of Stakeholders Interest:
A business organization is a coalition of several interest groups or stakeholders. Example — shareholders, customers, employees, suppliers, etc. The business should, therefore, work for the interest of áll of them rather than for the benefit of shareholders/owners alone.

Promotion of Society:
Business is a sub-system of society. It draws support and šustenance from society in the form of inputs. Socially responsible behavior is essential to sustain this relationship between business and society. During the course of its functioning, a business enterprise makes several decisions and actions. Its activities exercise a strong influence on the interests and values of society. Businesses must fulfill social obligations as compensation for undermining the legitimate interests of society.

Organized Social Power:
Large corporations have acquired tremendous social power through their multifarious operations. Social power may be misused in the absence of social responsibility. There should be an equilibrium between social power and social responsibility.

Legitimacy:
It is in the enlightened self-interest of businesses to assume social responsibility. Social responsibility legitimizes and promotes the economic objectives of the business. By improving social life, businesses can obtain better customers, employees, and neighbors. Social responsibility thus builds good citizenship as well as good business.

Competence:
Business organizations and their managers have proved their competence and leadership in solving economic problems. Society expects them to use their competence to solve social problems and thereby play a leadership role.

Professional Conduct:
Professional managers are required to display a keen social sensitivity and serve society as a whole. Social responsibility is one of the professional demands on managers. They adhere to the code of conduct and ethics applicable to their respective area of operation.

Public Opinion:
Adoption of social responsibility as an objective will help to improve the public opinion of the business. A good public image is a valuable asset for the business. For example maintaining parks, traffic islands, and organizing awareness camps, etc.