THE SOCIAL RESPONSIBILITY OF MANAGER
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 with the book Social Responsibilities of the Businessman by Howard R. Bowen. He suggested that businesses should consider the social implications of their decisions. There is no complete agreement on the definition. In a survey of 439 executives, 68 % of the responding managers agreed with the following definition: â€œCorporate social responsibility is seriously considering the impact of the companyâ€™s actions on society.â€?
A newer concept, but still very similar to social responsibility, is social responsiveness, which in simple terms means â€œthe 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.â€? Both definitions focus on corporations, but these concepts be expanded
1. To include enterprises other than businesses and
2. To encompass relationships within the enterprises.
The main difference between social responsibility and social responsiveness is that the latter implies actions and the â€œhowâ€? of enterprise responses. In this discussion, the terms will be used interchangeably.
Arguments for and against Business Involvement in Social Actions
Arguments for social involvement of business
1. Public needs have changed, leading to changed expectations. Business, it is suggested, received its charter from society and consequently has to respond to the needs of society.
2. Social involvement discourages additional government regulation and intervention. The result is greater freedom and more flexibility in decision making for business.
3. Business has a great deal of power which, it is reasoned, should be accompanied by an equal amount of responsibility.
4. Modern society is an interdependent system, and the internal activities of the enterprises have an impact on the external environment.
5. Social involvement may be in the interest of stockholders.
6. Problems can become profits. Items that may once have been considered waste (for example empty soft drink cans) can be profitably used again.
7. Social involvement creates a favorable public image. Thus, a firm may attract customers, employees, and investors.
8. Business should try to solve problems which other institutes are not able to solve. After all, business has a history of coming up with novel ideas.
9. Business has resources. Specifically, businesses should use its talented managers and specialists, as well as its capital resources, to solve some of societyâ€™s problems.
Arguments against social involvement of business
1. The primary task of business is to maximize profit by focusing strictly on economic activities. Social involvement could reduce economic efficiency.
2. In the final analysis, society must pay for the social involvement of business through higher prices. Social involvement would create excessive costs for business, which cannot commit its resources to social action.
3. Social involvement can weaken the international balance of payments. The cost of Social programs, the reasoning goes, would have to be added to the price of the product. Thus companies selling in the international markets would be at a disadvantage when competing with companies in other countries which do not have these social costs to bear.
4. Business has enough power, and additional social involvement and which further increase its power and influence.
5. Business people lack the social skills to deal with the problems of society. Their training and experience is with economic matters and their skills may not be pertinent to social problems.
6. There is a lack of accountability of business to society. Unless accountability can be established, business should not get involved.