Arguments for and against Social Responsibility

by Sree Rama Rao on November 10, 2009

The major arguments for the assumption of social responsibilities by business are:

1) Public expectations: Social expectations of business have increased dramatically since the 1960s. Public opinion in support of business pursuing social as well as economic goals is now well solidified.
2) Long run profits: Socially responsible businesses tend to have more and secure long run profits. This is the normal result of the better community relations and improved business image that responsible.
3) Ethical obligation: A business firm can and should have a conscience. Business should be socially responsible because responsible actions are right for their own sake.
4) Public image: Firms seek to enhance their public image to gain more customers, better employees, access to money markets, and other benefits. Since the public considers social goals to be important, business can create a favorable public image by pursuing social goals.
5) Better environment: Involvement by business can solve difficult social problems, thus creating a better quality of life and a more desirable community in which to attract and hold skilled employees.
6) Discouragement of further government regulation: Government regulation adds economic costs and restricts management’s decision flexibility by becoming socially responsible, business can expect less government regulation.
7) Balance of responsibility and power: Business has a large amount of power in society. An equally large amount of responsibility is required to balance it. When power is significantly greater than responsibility, the imbalance encourages irresponsible behavior that works against the public good.
8) Stockholder interests: Social responsibility will improve the price of a business’s stock in the long run. The stock market will view the socially responsible company as less risky and open to public attack. Therefore, it will award its stock a higher price earning ratio.
9) Possession of resources: Business has the financial resources, technical experts, and managerial talent to provide support to public and charitable projects that need assistance.
10) Superiority of prevention over cures: Social problems must be dealt with at sometime. Business should act on them before they become serious and costly to correct and take management’s energy away from accomplishing its goal of production goods and services.

The major arguments against the assumption of social responsibilities by business are:

1) Violation of profit maximization: This is the essence of the classical viewpoint. Business is most socially responsible when it attends strictly to its economic interests and leaves other activities to other institutions.
2) Dilution of purpose: The pursuit of social goals dilutes business’s primary purpose: economic productivity. Society may suffer as both economic and social goals are poorly accomplished.
3) Costs: Many socially responsible activities do not pay their own way. Someone has to pay these costs. Business must absorb these costs or pass them on to consumers in higher prices.
4) Too much power: Business is already one of the most powerful institutions in our society. If it pursued social goals, it would have even more power. Society has given business enough power.
5) Lack of skills: The outlook and abilities of business leaders are oriented primarily toward economies. Business people are poorly qualified to cope with social issues.
6) Lack of accountability: Political representatives pursue social goals and ar6e held accountable for their actions. Such is not the case with business leaders. There are no direct lines of social accountability from the business sector to the public.
7) Lack of broad public support: There is no broad mandate from society for business to become involved in social issues. The public is divided on the issue. In fact, it is a topic that usually generates a heated debate. Actions taken under such divided support are likely to fail.





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  • AngelinaJolie

    Awsome.
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  • Tindo

    I feel like I’ve found a gold mine with this article. THANK YOU in abundance.

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    thanx 4 helping me to make an awesome assignment.its really good.

  • Zainabanver

    thanks 4 giving such a wonderful definition ,,,i really learnt many things from this and once again thanks for all who took effort on this

  • Anant Shokeen

    thankxxx for the information

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  • Mahidiya4

    headings should also be given

  • Flaviagrace13

    NIICEE

  • Sarahalexagizelle

    thanks for da infos. it help me a lot :)

  • http://profile.yahoo.com/RSYZDBJESXUTEVHZAOYSEFJCNA AshnaRaji Abey

    what is social responsibility

  • http://profile.yahoo.com/RSYZDBJESXUTEVHZAOYSEFJCNA AshnaRaji Abey

    what is social responsibility

  • divya sekar

    its really helpful 2 me….thanxxxx a lot

  • Alubalu

    presters steve.

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