- July 1, 2020
Socialresponsibility is defined as the responsibility of companies tocapitalize on the benefits while decreasing the adverse effects onthe society. Social responsibility and ethics are two terms that havealways been used interchangeably even though they do not refer to thesame thing. Social responsibility prioritizes on the effects of theoperations of the entire business on the community, whereas businessethics focuses on the personal decisions which are weighed by thesociety before being determined to be right or wrong. Socialresponsibility has three dimensions, mainly economic, ethical andlegal. The economic dimension focuses on the distribution ofresources within the social setting. The ethical dimension focuses onthe expected and prohibited behaviors as laid out by the company andthe community (Choi and Moon, 2016). The legal dimension isconcerned with the abidance by the laws and regulations set out bythe government. This discussion tends to justify why consumers favorcompanies which are socially responsible as opposed to those whichare guided by profit maximization.
Inmy perspective, it is not ethical for businesses to focus on profitmaking aspect but ignore their social responsibilities to thecommunity. Many consumers prefer companies that give back to thesociety, for instance, providing donations to non-profitorganizations. Companies have the same ethical obligations to theirsuppliers, employees, shareholders, customers, and the community as awhole. The same responsibility goes to the environment to ensure thecompanies uphold eco-friendly activities. When companies focus onprofit maximization, there is a possibility of ruining theenvironment while sourcing for raw materials due to the pressure toincrease their production output so as to make huge profits(Pedersen, 2015). The products manufactured might be risky for humanuse due to the quick process of production, and also the chances ofemployee mistreatment are high. However, there is a need to balancethe interests of shareholders whose primary concern is on profitmaximization against those of other stakeholders such as thecommunity and customers.
Asnoted in the ethical theories, companies have other obligations otherthan focusing on the concept of profit maximization. According toutilitarianism, which is classified under the teleological theory,companies have to pursue policies which would benefit a majority ofthe people while minimizing adverse effects to others. The outcomesof the operations of business play a significant role in determiningthe goodness or badness of the process involved in the production.Even though this theory favors cost-benefit strategy supported bymany companies, it also affects the right of minorities (Vranceanu,2014). Businesses should also ensure impartiality and fairness areupheld when it comes to making decisions as noted in justice theory.In the context of this theory, companies should work to protect theleast advantaged as upheld by both religious and secular philosophieswhich champion for the assistance of the needy in society (Clapp andRowlands, 2014). In profit maximization theory, there is a perceptionthat resources are efficiently allocated depending on the competitionbetween companies. Furthermore, it mandates that companies can onlyact within the context of the law. However, this theory fails toaddress wealth allocation between corporations and the community.
Insummary, companies have to ensure they pursue corporate socialresponsibility which necessitates for responsible activities throughan ethical decision-making process with the general interests of thesociety in mind. The survival of the business depends on accruedprofits however, companies should also focus on other importantobjectives that would benefit the community.
Choi,H., & Moon, D. (2016). Perceptions of Corporate SocialResponsibility in the Capital Market. Journalof Applied Business Research (JABR),32(5),1507-1518.
Clapp,J., & Rowlands, I. H. (2014). Corporate social responsibility.EssentialConcepts of Global Environmental Governance,42.
Pedersen,E. R. G. (Ed.). (2015). Corporatesocial responsibility.Sage.
Vranceanu,R. (2014). Corporate profit, entrepreneurship theory and businessethics. BusinessEthics: A European Review,23(1),50-68.