The Responsibility of Business
Assessing the responsibilities of the business within the limits of the law can be seen as a controversial subject, which answer can be divided between two points of view. These points of view are mainly related to the responsibility of the organizations before their social environment. One opinion can be seen in that the organization is socially responsible as long as maximizes the profit, within the limits of the established norms and laws.
According to this position, the organization should pursue only economic goals, which can be reflected through increasing shareholder value. According to another view, the organization, in addition to the economic responsibility, should consider the human and the social aspects of the impact of its business activity on employees, consumers, and communities, in which the activities are taking place as well as solving social problems in general. This paper supports the opinion that the responsibility of organizations goes beyond only economic goals and pursuing shareholder value, stating that the social responsibility of organizations can be combined with profit maximization.
Defining the corporate social responsibility, it can be stated that such responsibility means that “a corporation should be held accountable for any of its actions that affect people, their communities and their environment” (Worthington and Britton 448).
In that regard, many arguments can be provided in favour of pursuing social responsibility by organizations. The first argument is related to the making long-term favourable prospects for the business. Social actions, which improves the lives of local communities or eliminates the need for governmental regulations can be in the company’s own interests. A problem-free society might have more favourable conditions for the business. Besides, even if short-term expenses, related to social actions are high, in long-term perspective they might stimulate profit, due to the established image of the organization.
Another argument can be seen in the changes of the expectations of the society regarding the responsibility of the companies. The protection of the environment and the globalization are a few things, which are changing gradually in the business world. What was considered a risky move in the past is considered now as a standard of a successful company. Thus, taking the lead in social initiations is an investment accommodating the new changes in the expectations of the society. Narrowing the gap between new expectations and real responses, the involvement of the organization in social aspects becomes expected and necessary.
In terms of morality and ethics, the social responsibility can be related to that organizations are members of society, and thus the norms of morality should be used as guidance in establishing their goals. The latter can also be accessed through the position that the law cannot cover all the aspects that an organization might face. The confirmation of the latter can be seen that some organizations establish specific codes of ethics regarding the behaviour within the organization, and the behaviour outside the organization.
If the law was to cover all the aspects indicated in specific ethical guidelines, it would not be understood why organization would publish such codes in the first place. The raised interest toward business ethics as a studied subject can be interpreted in favour of the demand for social responsibility as a goal that companies should pursue.
In that regard, it should be mentioned that in the context of most successful organization operating in the world today, social responsibility and profit maximization are not mutually exclusive concepts. It means that corporate social responsibility does not imply that “firms acting in a responsible manner cannot be as profitable as other firms that are less responsible” (Worthington and Britton 448). Thus, the companies, even pursuing the welfare of the society and the community, pursue self-interest at the same time, where most people acknowledge that “business will not generally behave in a social responsible manner out altruism” (Worthington and Britton 449).
It should be added that with the voluntary nature of social responsibility as well as in terms of the priorities of the business, in which the provision of capital is ranked first, there are still issues that should be resolved. These issues can be seen in determining what actions specifically can be considered of social responsible nature, what are the financial positions of the company, in which social responsibility could be ignored, the role of the managers, etc.
Nevertheless, according to the results of survey of European companies, in which 70 and 88 percent of the respondents indicated that corporate responsibility as an important issue and the big influence of corporate reputation respectively (Worthington and Britton 448), it can be seen that despite different view, the majority of the companies agree on social responsibility.
It can be concluded that views on the role and the responsibility of the business will likely to remain different, specifically that each view has its own set of arguments supporting it. Nevertheless, the main support for the extended responsibility of business can stem from the assumption that such responsibility will likely lead to better society.
Worthington, Ian, and Chris Britton. The Business Environment. 6th ed. Harlow, England ; New York: FT Prentice Hall, 2009. Print.