Free «Social Responsibility» Essay Sample
Table of Contents
Social responsibility or Corporate Social Responsibility (CSR) refers to an ethical framework which suggests that an institution should feel obligated to perform certain activities for the sake of the public. Consequently, social responsibility describes the ethical and moral content of managerial and corporate decisions, i.e. the tenets used in business decision-making. It is everyone’s social responsibility to ensure that the economy and the ecosystems are balanced. Social responsibility intends to correct the disequilibrium that exists between the economic development and the society’s welfare. Social responsiveness is a concept closely linked to CSR. It describes the capability of an organization to relate its activities and policies to the environment in ways that benefit the economy and the society.
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All business organizations regularly work together with the society as every business is part of the community. Firms always interrelate at the primary level with groups such as distributors, suppliers, consumers, employees, stockholders, banks, and competitors. At the secondary level, corporations interact with institutions such as the local communities, business support groups, the government, social media pressure groups, and the general public. Considering all these collaborations, business organizations cannot afford to go on with their operations without having to attend to the issues affecting these groups.
Keith Davis’ Model of Corporate Social Responsibility
Davis’ model encompasses five propositions that designate how and why companies should stand by the obligation to carry out activities that safeguard and advance the business and society’s wellbeing. Davis’ first proposition is that social responsibility should arise from social power; this proposal comes from the belief that an organization has a substantial influence and power over some crucial issues such as the environment and employment (Davis, 1973). For this reason, the society is justified to hold the organizations responsible for social situations that come about as an effect of their power and influence.
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The second proposition states that businesses should function as a two-way open system with an open reception of contributions from the society and clear revelation of their actions to the general public (Davis, 1973). Organizations should be ready to adhere to what must be done for sustaining and improving social welfare. Nonetheless, the society should be willing to pay attention to the economic reports and business activities aimed at the fulfilling of social accountabilities. According to Davis, (1973), the two parties should register an open communication strategy to ensure smooth running of activities.
The third proposition suggests that a cost-benefit social analysis of activity should be conducted to choose which action to implement (Davis, 1973). Since social responsibility brings mutual benefits to the organization and the society, the technical practicability and economic profitability should be evaluated considering both long and short term impacts of all business activities in advance (Davis, 1973).
The fourth proposal advocates that the social costs linked with each activity be transferred to the consumer (Davis, 1973). This proposition states that organizations cannot undertake activities that are socially beneficial but economically detrimental. Subsequently, maintenance costs are transferred to consumers via high priced goods and services (Davis, 1973).
The fifth proposition indicates that organizations have the responsibility to get involved in particular problems that may be unrelated to their operational areas (Davis, 1973). For instance, if a company has skills to solve a social issue unrelated to its operations, the company should be socially responsible and help the society solve the problem.
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Since 1973, when Davis came up with his proposals, so much has changed regarding what the society expects of its organizations and what managers view as proper roles in an organization. In the past the CSR activities were unrelated to companys’ central business. In the 21st century, companies have approached CSR in a premeditated way, recognizing that aligning the CSR ventures with the business model can benefit both the society and the company, hence improving the company’s competitive advantage (Hunnicutt, 2009). From the modern perspective, managers are expected to put the stockholders’ interests before those of the society (Crane, 2008). Corporations are also not held responsible for the social consequences of their operations. For instance, brewery companies shouldn't be held accountable for misdeeds of drunkards. An organization is also responsible: to its employees, ensuring they have healthy and safe working conditions and they are well compensated, to its suppliers, ensuring they are paid on time, to its customers, by offering quality products at affordable prices, to the government, by following the rules and regulations when performing its business activity, and to the community, by paying school fees for the destitute children, repairing roads, building churches, hospitals and other social amenities (Hunnicutt, 2009).
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Pros and Cons of Social Responsibility
CSR is advantageous as it helps build a good company reputation. Organization profitability is improved as organizations introduce energy efficiency and waste recycling mechanisms that reduce pollution, hence cut energy costs (Crane, 2008). CSR enhances the transparency of a business and its accountability to the investors, shareholders, media, etc. CSR helps organizations to build strong customer relations with their suppliers and consumers. Organization managers get personal satisfaction knowing they are helping the society by creating social amenities, alleviating poverty, etc. (Lindgreen & Swaen, 2010).
Nonetheless, CSR leads to reduction in profits, hence contradicting the primary goal of a business; organizations incur high costs trying to enhance their social and environmental duties (Hunnicutt, 2009). CSR give organizations too much power over the community, environment, local development, etc. CSR leads to conflicts among managers over how the funds set aside for social responsibility should be used. Sometimes, CSR imposes too many burdens on corporations. CSR programs may be unfair at times as the board of directors may be biased, sponsoring the groups and foundations that benefit them (Hunnicutt