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Social responsibility is an ethical or ideological theory that an entity whether it is a government, corporation, organization or individual has a responsibility to society but this responsibility can be 'negative.' In that it is a responsibility to refrain from acting (resistance stance) or it can be 'positive,' meaning there is a responsibility to act (proactive stance). While primarily associated with business and governmental practices, activist groups and local communities can also be associated with social responsibility, not only business or governmental entities.

There is a large inequality in the means and roles of different entities to fulfill their claimed responsibility. This would imply the different entities have different responsibilities, in so much as states should ensure the civil rights of their citizens, that corporations should respect and encourage the human rights of their employees and that citizens should abide with written laws. But social responsibility can mean more than these examples. Many NGOs accept that their role and the responsibility of their members as citizens is to help improve society by taking a proactive stance in their societal roles. It can also imply that corporations have an implicit obligation to give back to society (such as is claimed as part of corporate social responsibility and/or stakeholder theory).

A second way that businesses can use ethical decision making to strengthen their businesses is by making decisions that affect its health as seen to those stakeholders that are outside of the business environment. (Kaliski, 2001) Customers and Suppliers are two examples of such stakeholders. Take a look at companies like Johnson & Johnson, their strong sense of responsibility to the public is well known. (Hogue, 2001) In particular, take for instance Johnson & Johnson and the Tylenol scare of 1982. When people realized that some bottles of Tylenol contained cyanide they quit buying Tylenol, stocks dropped and Johnson & Johnson lost a lot of money. But they chose to lose even more money and invest in new tamper resistant seals and announce a major recall of their product. There was no “certain amount” for this situation; Johnson & Johnson had to lose money to be socially responsible, but in the long run they gained the trust of their customers. Now when people look at other products, there is a sense of faith and trust in that Johnson & Johnson would not allow a product to harm people just to meet their own bottom line. The exactly opposite picture had been portrayed by Union Carbide in the Methyl Isocyanide gas leak incident in Bhopal,India in 1984.

A third way that business can use ethical decision making to secure their businesses is by making decisions that allow for government agencies to minimize their involvement with the corporation. (Kaliski, 2001) For instance if a company is proactive and follows the EPA guidelines for admissions on dangerous pollutants and even goes an extra step to get involved in the community and address those concerns that the public might have; they would be less likely to have the EPA investigate them for environmental concerns. “A significant element of current thinking about privacy, however, stresses 'self-regulation' rather than market or government mechanisms for protecting personal information” (Swire , 1997) Most rules and regulations are formed due to public outcry, if there is not outcry there often will be limited regulation.


Contents

Economic Value

While social responsibility hold obvious moral value, it carries with it economic value as well. This economic value can be defined as the total dollar amount individuals are willing to pay for or invest in socially responsible goods or practices. It has been estimated that over $5300 billion can be extracted from the United States' gross domestic product for the purpose of funding socially responsible practices. [1] Triple bottom line is one theory that discusses that idea.


Criticism of the doctrine of positive responsibility

Many, particularly libertarians, assert there is no 'social responsibility' to do anything, but to refrain from doing. They argue that social responsibility only exists to the extent that an individual or business should not initiate physical force, threat of force, or fraud against another. In his famous article The Social Responsibility of Business is to Increase Profits, Nobel economist Milton Friedman(Classical View/theory of Social Responsibility) asserts that businesses have no social responsibility other than to increase profits and refrain from engaging in deception and fraud. He maintains that when businesses seek to maximize profits, they almost always incidentally do what is good for society. Friedman does not argue that business should not help the community but that it may indeed be in the long-run self-interest of a business to 'devote resources to providing amenities to [the] community...' in order to 'generate goodwill' and thereby increase profits.

Another famous economist highly critical of this doctrine is R. Edward Freeman, author of a number of papers on stakeholder theory from an explicitly libertarian perspective.

Can a business be socially responsible?

This brings us to the next question in the search for the meaning of socially responsible ethics and what it means to business. Can a business be socially responsible? If it can be then what criteria does it need to ensure that it is perceived in this manner? For each business it must be a different measure. (Kaliski, 2007) After all, each business is trying to reach different goals. However, there are four areas that should be measured no matter what the outcome that is needed. Those measurements are Economic function, Quality of life, Social investment and Problem solving. In economic function, the goal that is trying to be achieved should be measured to see if it meets with the cost guidelines that the business is willing to contribute. (Kaliski, 2007) For instance if the business were to try to better the plant by reducing its carbon footprint; how would it go about doing this? (Carbon Footprint, 2006) Would it begin by doing something major like installing water heaters throughout the building or re-doing the building insulation? Or would they begin in small ways that would be more cost effective like mandating that parking lots lights are turned off at a certain time? Or that office computers all be turned off at the end of the workday instead of being left on and simply logged out.In the quality of life measurement “should focus on whether the organization is improving or degrading the general quality of life in society”. (Kaliski, 2007) Does the business produce a tangible good? Is that tangible good anything that betters society and how people live? If the business produces a service, then does that service do anything to improve how people live? If the answer to those questions was no, then how could the good or service produced better society?

Social investment looks at what the business is doing for the community. (Kaliski, 2007) Does the business work with the community to fix outstanding issues and social problems? How much of an investment does it make? What issues are they addressing? To what depth are the problems that they are working to fix? Are they trying to fix major issues like drug addiction in impoverished areas or are they working on smaller issues like providing recreation activities for youth? Is the problem they are working on fixing a large social problem with far-reaching consequences? Or is the problem a localized one that is area specific?

Problem solving looks at to what extent the business will work to fix the problem. (Kaliski, 2007) Will the business simply contribute money to an organization working on the issue? Will they allow company employees to volunteer on company time to fix the problem? Will it pay others to fix the problem? Will is actually be in the trenches working on the issues? Will they company actually have a department working on the issue and nothing else?



References

Carbon Footprint, (2006). Carbon Footprint's Business Services. Retrieved October 19, 2007, from Carbon Footprint Web site: http://www.carbonfootprint.com/companies_calc.html

Hogue, J (2001, April 19). Johnson and Johnson Tylenol Scare. Retrieved September 10, 2007, from Communications on the Internet Web site: http://iml.jou.ufl.edu/projects/spring01/Hogue/tylenol.html

Kaliski, B. (Ed.). Social Responsibility and Organizational Ethics. (2001). Encyclopedia of Business and Finance (2nd ed., Vol. 1). New York: Macmillan Reference.

Kaliski, B. (Ed.). Ethics in Management. (2001). Encyclopedia of Business and Finance (2nd ed., Vol. 1). New York: Macmillan Reference.

Pride, William M., Hughes, Robert James, & Kapoor, Jack R. (2008). Business (9th ed.) Boston, MA: Houghton Mifflin Company. ISBN 0618770917

External links

Some groups of professionals have defined their own intrinsic social responsibilities. Here are some examples:


See also

Further reading

  • Crane, Andrew, Abagail McWilliams, Dirk Matten, Jeremy Moon, and Donald S. Siegel (Editors) (2008). The Oxford Handbook of Corporate Social Responsibility. Oxford, England; New York, NY: Oxford University Press. ISBN 9780199211593. OCLC 170956650. 
  • May, Steve, George Cheney, and Juliet Roper (2007). The Debate over Corporate Social Responsibility. Oxford, England; New York, NY: Oxford University Press. ISBN 9780195178821. OCLC 70292018. 
  • McBarnet, Doreen J., Aurora Voiculescu, and Tom Campbell (2007). The New Corporate Accountability: Corporate Social Responsibility and the Law. Cambridge, England: Cambridge University Press. ISBN 9780521868181. OCLC 181421309. 
  • Rossi, Alice S. (2001). Caring and Doing for Others: Social Responsibility in the Domains of Family, Work, and Community. Chicago, IL: University of Chicago Press. ISBN 0226728722. OCLC 45064591. 
  • Zerk, Jennifer A. (2006). Multinationals and Corporate Social Responsibility: Limitations and Opportunities in International Law. Cambridge, UK: Cambridge University Press. ISBN 0521844991. OCLC 76849750. 
Retrieved from 'http://en.wikipedia.org/Social_responsibility'

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