The concept of social responsibility is not new. Although the idea was already considered in the early part of the twentieth century, the modern discussion of social responsibility got a major impetus. As might be expected, there is no complete agreement on the definition. In a survey of 400 executives, 60 per cent of the responding managers agreed with the following definition: Corporate social responsibility is seriously considering the impact of the company’s actions on society.
A concept that is newer, but still very similar to social responsibility is social responsiveness which in simple terms means the ability of a corporation to relate its operations and policies to the social environment in ways that are mutually beneficial to the company and to society. Both definitions focus on corporations but these concepts should be expanded to include enterprises other than businesses and to encompass relationships within an enterprise . The main difference between social responsibility and social responsiveness is that the latter implies actions and the “how” of enterprise responses. In this discussion the terms will be used interchangeably.
But to live within an environment and be responsive to it does not mean that managers should merely react in the face of stress. Since no enterprise can be expected to react very quickly to the unforeseen developments, an enterprise must practice, ways to anticipating developments, through forecasts. An alert company, for example, does not wait until its product is obsolete and sales have fallen off before coming out with a new or improved product. A government agency should not wait until its regulations are obsolete and discredited before looking for another way to achieve its objectives. No enterprises should wait for problems to develop before preparing to face them Pro-action is an essential part of the planning process.
Role of the government:
There are many instances in which social changes can be implemented only by the enactment of legislation. However, many managers in business and elsewhere have found it to their advantage to do something about pressing social problems. For example, many businesses have been profiting by filtering smokestack pollutants and selling or utilizing these recovered wastes. Some companies have made a profit by building low cost apartment buildings in ghetto areas. In other words, contributing to the solution of social problems does not always involve net expenses. But society may need the bludgeoning force of legislation to get improvements under way.
The discussion of social responsibility raises the question of how social performance should be evaluated. It is only more recently that corporations have seriously concerned themselves with this idea. Social audit had been defined as “ a commitment to systematic assessment of and reporting on some meaningful definable, domain of the company’s activities that have a social impact.
One may distinguish between the two types of audits. One is required by the government and involves for example, pollution control, product performance requirements and equal employment standards. The other kind of social audit concerns a great variety of voluntary social programmes.
It is rather difficult to determine what areas the social audit should encompass. Often the items include pollution and the hiring, training and promotion of minorities but there are many other areas. For example, General Electric developed a matrix, that facilitates the analysis of the expectations of customers, investors, employees communities and other claimants in the following areas: product and technical performance, economic performance, employment performance, environment and natural resources, community welfare and development and government business relations as well as international trade and development.
Another difficulty is determining the amount of money an enterprise spends in selected areas. But cost alone is an inadequate measure. It does not necessarily indicate the results of social involvement. Other problems are the collection of data and their presentation in a way that accurately reflects the social involvement of an enterprise. There is no doubt that many difficulties are associated with a social audit, but there is evidence that companies and other organizations in the United States honestly attempt to address themselves to this challenge.
All persons, whether in business, government, a university or any other enterprise are concerned with ethics. In Webster ‘s Ninth New Collegiate Dictionary ethics is defined as the discipline dealing with what is good and bad and with moral duty and obligation. Thus, personal ethics has been referred to as the rules by which an individual lives his or her personal life and accounting ethics pertains to the code that guides the professional conduct of accountants. Business ethics is concerned with truth and justice and has a variety of aspects such as the expectations of society, fair competition, advertising, public relations, social responsibilities, consumer autonomy and corporate behaviour in the home country as well as abroad.