Business social responsibility can also be termed Corporate social responsibility (CSR): This is an obligation, beyond that required by the law and economics, for a firm to pursue long term goals that are good for society.
The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large. More so , the management of business process to produce an overall positive impact on society.
There are four dimensions of Business social responsibility
Economic - responsibility to earn profit for owners
Legal - responsibility to comply with the law (society’s codification of right and wrong)
Ethical - not acting just for profit but doing what is right, just and fair
Voluntary and philanthropic - promoting human welfare and goodwill
Being a good corporate citizen contributing to the community and the quality of life
There are two schools of thought on this issue:
The free market view or economic school of thought: The job of business is to create wealth with the interests of the shareholders as the guiding principle. The role of business is to create wealth by providing goods and services
“There is one and only one social responsibility of business- to use its resources and engage in activities designed to increase its profit so long as it stays will the rules of the game, which is to say, engages in open and free competition, without deception or fraud.” [Milton Friedman, American economist]. Milton Friedman(1962,1970) further argued that giving money away is like a self imposed tax and could generate public controversies. More so in Friedman’s opinion, Managers who have been put in charge of a business have no right to give away the money of the owners. Managers are employed to generate wealth for the shareholders not give it away
The corporate responsibility view or The civil school of thought: This is based on Oliver Sheldon (1923) ideology . In his own opinion, those managing business should recognise that they depend on society. Business relies on inputs from society and on socially created institutions. There is a social contract between business and society involving mutual obligations, that society and business recognise that they have to each other. Based on this ideology, British Institute of management (B.I.M.) highlighted the following areas of social responsibilities:
Legal Responsibilities of a business- This is the responsibility to comply with the law (society’s codification of right and wrong). Obeying all the laws of the land and paying all taxes promptly.
Responsibilities to the local community- To avoid inappropriate routing and transportation of distributing vehicles. To avoid environmental pollution and son on.
Responsibilities to competitors- Avoidance of espionage, poaching of staff and deliberately destroying products and services, of competitors.
Responsibilities to customers- Building good customer relationship and trust. Avoid what is know as cognitive dissonance(By Leon Festinger).
Responsibilities to employees- Payment of salaries as at when due, Involving employees in decision making, developing capacities of employees for growth and providing safe working environments for employees.
Responsibilities to companies shareholders- Protecting the investments of shareholders, treating shareholders fairly, adequate information to investors and arrangement of annual general meetings.
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The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large. More so , the management of business process to produce an overall positive impact on society.
There are four dimensions of Business social responsibility
Economic - responsibility to earn profit for owners
Legal - responsibility to comply with the law (society’s codification of right and wrong)
Ethical - not acting just for profit but doing what is right, just and fair
Voluntary and philanthropic - promoting human welfare and goodwill
Being a good corporate citizen contributing to the community and the quality of life
There are two schools of thought on this issue:
The free market view or economic school of thought: The job of business is to create wealth with the interests of the shareholders as the guiding principle. The role of business is to create wealth by providing goods and services
“There is one and only one social responsibility of business- to use its resources and engage in activities designed to increase its profit so long as it stays will the rules of the game, which is to say, engages in open and free competition, without deception or fraud.” [Milton Friedman, American economist]. Milton Friedman(1962,1970) further argued that giving money away is like a self imposed tax and could generate public controversies. More so in Friedman’s opinion, Managers who have been put in charge of a business have no right to give away the money of the owners. Managers are employed to generate wealth for the shareholders not give it away
The corporate responsibility view or The civil school of thought: This is based on Oliver Sheldon (1923) ideology . In his own opinion, those managing business should recognise that they depend on society. Business relies on inputs from society and on socially created institutions. There is a social contract between business and society involving mutual obligations, that society and business recognise that they have to each other. Based on this ideology, British Institute of management (B.I.M.) highlighted the following areas of social responsibilities:
Legal Responsibilities of a business- This is the responsibility to comply with the law (society’s codification of right and wrong). Obeying all the laws of the land and paying all taxes promptly.
Responsibilities to the local community- To avoid inappropriate routing and transportation of distributing vehicles. To avoid environmental pollution and son on.
Responsibilities to competitors- Avoidance of espionage, poaching of staff and deliberately destroying products and services, of competitors.
Responsibilities to customers- Building good customer relationship and trust. Avoid what is know as cognitive dissonance(By Leon Festinger).
Responsibilities to employees- Payment of salaries as at when due, Involving employees in decision making, developing capacities of employees for growth and providing safe working environments for employees.
Responsibilities to companies shareholders- Protecting the investments of shareholders, treating shareholders fairly, adequate information to investors and arrangement of annual general meetings.
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