Social Responsibility of a Business - Term Paper Example

? Social Responsibility of a Business Introduction Over the past years, the social responsibility of a business has had varied interpretations from different people. According to economist Friedman, the social responsibility of any form of business is to maximize profits under all circumstances. This famous claim by Friedman however triggered a debate on what the social responsibility of a business is. The businessperson Mackey disagreed with Friedman’s thought terming it as narrow and underselling humanitarian aspect of capitalism. Mackey strongly believes that the social responsibility of a business is not only to increase profits but also to create value for all the stakeholders in the business. Mackey argues that the social responsibility of a business to shareholders, society, and the stakeholders are varied and all are satisfied in different ways, which should be taken seriously by any kind of business to be successful. I strongly agree with Mackey that the social responsibility of a business is not only to increase profits, but also to satisfy the needs of the society, shareholders, and stakeholders, which are as well important. Social responsibility of business to stakeholders The stakeholders in a business comprise the community, employees, suppliers, and clientele. According to Mackey (2005), all these stakeholders draw the meaning of the business in their own way of satisfaction. It is worth noting that the groups’ needs are varied as well and the needs are satisfied in different ways. The customer is the fundamental component of any business as without the customer, the business cannot exist and therefore, putting the needs of the customers first in a business is the important process of achieving business goals. According to Ghuman and Aswathappa (2010), the social responsibility of a business to a customer is mainly to produce quality goods and service that satisfy the needs of the customers (p.63). It is also important to note that the goods and services should be readily available to the customers at a reasonable price and the business needs to be honest and transparent with the customers. A business needs the services of employees to be able to satisfy the need of its customers and this implies that there is need for a business to satisfy the social needs of its employees. Satisfied employees in any business will translate into efficiency and quality output, which are valuable assets to the business. The social responsibility of a business to employees include, good working conditions and attractive salaries and wages, social security such as insurance and pension schemes, better living standards among others. Suppliers are as well important to a business and therefore there is need for a business to satisfy the suppliers socially. Mackey believes that all the stakeholders in a business are important for a business to attain its goals. Suppliers supply business raw materials needed to produce certain goods or services and it is their responsibility as well to get the finished products close to the customers. For the smooth functioning of the business, the social function of the business is to give them a fair deal in the business. Social responsibility of a business to shareholders The shareholders in layman’s term are the owners of a business and the social responsibility of the business is to satisfy their needs. Although most shareholders majorly focus on increased profits, Mackey admits this though in a different perspective. According to Mackey, profits maximization should not be the soul goal for a business but the business need to put first the interest of the entire stakeholders. Mackey (2005) argues that by putting first the interest of the stakeholders by value creation, this will act as a means to an end. As the business works hard towards maximizing profits for the investors, it is important to bear in mind that by satisfying the customers and other stakeholders, the profits are likely to increase. The shareholders being the owners of the business, it is the social responsibility for the business to provide security to their investments and pay the interests on time. It is with no doubt that satisfying the customers’ needs places the business in the right direction towards achieving its goals. It is also important to acknowledge that other stakeholders are as well important just like the investors in a business. Happy and satisfied stakeholders translates into much profits and therefore Mackey’s (2005) argument can work best for a business in this competitive business world in the twenty first century. In addition, is the responsibility of the business to provide the shareholders great business opportunities for their full participation in the business. Social responsibility of the business to the society According to Pride, Hughes, and Kapoor (2012), a business should be adding value to the society and this can be achieved through a number of ways (p.61). Making donations to address certain issues in the society is one of the social responsibilities of a business to the society. Even though donations are encouraged in business, they should not undermine the business operations and should not harm the customers and the employees (Kennedy, 2013). The society comprises of people, families, organizations or groups and these, there is a social responsibility for business create a positive impact on. These groups are interdependent and the welfare of the entire society will have a positive impact on the business. Mackey also supports donations and gives a good illustration how the whole food give a certain percentage to charity. Other social responsibility for a business to the society include, employment creation, participating in environmental conservation programs, promoting culture and sports, preserving cultural values and providing assistance to the vulnerable groups in the society among others. According to Kurtz and Boone (2011), it is also important to note that the society is a system and paying attention to the welfare of the sub systems will have a positive impact on the business (p.63). Mackey (2005) also adds that this is a decision left for the business and it is voluntary, though it is an important aspect for any business. Conclusion In conclusion, the business social responsibility are varied, the stakeholders, shareholder, and the society all need to be satisfied in different ways for the smooth running of the business. By putting the customers first in the business by satisfying the needs, the business is capable of realizing great profits. The employees are as well important and it is the responsibility for the business to satisfy their needs to satisfy the customers appropriately. The shareholders are not the only important people in the business, all the stakeholders, and the society are as well important and therefore a business should work towards satisfying the welfare of the whole group. Finally, business main agenda should not only be to increase profits but to create value to all the groups involved. Works Cited Ghuman, K. & Aswathappa, K. (2010). Management: Concept, practice and cases. New Delhi: Tata McGraw Hill. Kennedy, R. (2013). The Social Responsibility of Business. Acton Institute. Retrieved from http://www.acton.org/pub/commentary/2013/09/18/social-responsibility-business Kurtz, D. L., & Boone, L. E. (2011). Contemporary business. Hoboken, N.J: Wiley. Mackey, J. (2005). Rethinking the Social Responsibility of Business. Reason.com. Retrieved from http://reason.com/archives/2005/10/01/rethinking-the-social-responsi/3 Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2012). Business. Mason, OH: South-Western Cengage Learning. Read More