Social Responsibility - Definition
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What is Social Responsibility?
Social responsibility is a social theory that maintains that businesses, organizations, and entities should not just focus on making a profit; rather, they also have an obligation towards the benefit of the society.
Social responsibility is the same as corporate social responsibility. It is a theory that advocates that businesses, individuals, and organizations act in the benefit of the society.
According to the International Organization for Standardization (ISO), the ability of businesses to add value to the societies in which they operate alongside having good economic performance is crucial to the business. Hence, a business is valuable when it maximizes its shareholders value and also acts for the benefit of the society.
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A Little More on What is Social Responsibility
Social responsibility is a theory that believes that individuals and organizations act in the best interest of the society. This theory strikes a balance between the concepts of making profits and making contributions to the society. There are many ways individuals or businesses can be socially responsible, for example. Charitable donations or donation of time and resources to the development of the society of one of the ways. Certain businesses or organisations make social responsibility as part of their core models, such organizations embark on projects and initiatives that help foster an improved society. Nowadays, corporate social responsibility of one of the main factors that investors consider before they invest in an organization. Corporate socially responsible firms tend to attract more investors, this is given their ability to bridge the gap between maximising shareholder value and contributing to the development of the society. It is important to know that voluntary engagement in social responsibility yields more results than companies being coerced to be socially responsible. Also, organizations that make social responsibility an integral part of their business record more impacts.
The vital points to know about social responsibility are;
- Social responsibility is a theory that holds that individuals, businesses and organizations should act in the best interest of the society in which they operate in, in addition to maximising shareholder value.
- Corporate social responsibility entails that businesses execute initiatives and policies are of benefits to the society.
- Social responsibility strikes a balance between making profits and making positive contributions to society.
- Social responsibility is one of the factors investors consider before doing business with an organization.
Social Responsibility in Practice
For organizations that have integrated social responsibility as a core of their business, they can embark on projects such as planning trees to preserve nature and the environment. Also, projects that reduce pollution in the society such as the reduction of greenhouse gases are regarded as socially responsible projects. Organizations can also make donations for education grants and communities, philanthropist contributions are also social responsibility projects. Volunteer work for environmental changes and improvements, offering fair wages to workers and contributing to projects aimed at improving the society are part of social responsibility.
Social Responsibility Concerns
There are certain concerns or criticisms raised against social responsibility, especially by people who do not believe that every organization should have a social conscience. One of the notable social responsibility concerns was raised by Milton Friedman, an economist who believed that individuals are the only ones that need to have a sense of social responsibility. According to Friedman, "social responsibilities of business are notable for their analytical looseness and lack of rigor." due to the fact that businesses do not have the same operations, some scholars and economists are of the opinion that social responsibility kicks against the crux of a business which is to make profit.