Social Responsibilities of Private Sector Businesses - Essay Example

 In the current world of competition and tough economic times, many enterprises are using different tactics to appeal to potential customers and the general public. In particular, enterprises in the private sector have incorporate social responsibilities in their objectives in order to portray a good image to the public. In this case, many enterprises have portrayed that their businesses are not only concerned with making profits but also in promoting desirable social attributes such as reduction in environmental pollution, reduction of discrimination in the society and provision of employment opportunities. However, these social responsibilities are additional expenditure to the organizations and deviate from the main objective of businesses, which is to make profit to the proprietors. This essay will argue whether the only social responsibility of private sector business is to maximize profits. To start with, private enterprises are formed with a basic purpose of generating profits to the shareholders. This is different from organizations in the public and voluntary sectors whose main purpose is not to make profits but to serve the public. This is because the revenues for setting up of setting up organizations in public sector come from the general public through taxation 1. Therefore, public organizations do not prioritize making profit over the quality of services or products offered to the general public. On the other hand, private enterprises prioritize making profits to the shareholders. This is because the revenues used in setting up the organizations come from individuals, who risk their resources in order to get benefits. It is also worth pointing out that employee in the private enterprises work in accordance to the aims of their employers. This means that employees in the private enterprise aim to increase profits while adhering to the society needs that are either set as rules in a country or as a way of promoting good company image to the public. In short, employees in the private enterprise are agents of the owners and whatever they do is based on the desires of the proprietors of the enterprise. Therefore, while carrying out social responsibilities in the industry, the main aim is to appeal to the public in order to improve business relations and hence better sales of products and services. However, it can be argued that private businesses have other reasons that promote their existence in order to make profit. This is because private businesses need the society more than anything else in order to achieve their main objective of making profits. For instance, private businesses have to employ qualified employees in order to produce quality products or services that can be sold in the market. Interestingly, private businesses capitalize in making profits but at the same time serving the interests of the community by providing quality goods and services. In addition, private businesses have to comply with ethical and legal regulations that are set by various communities in order to relevant in the market2. Moreover, in any business setting, entrepreneurs have to be sensitive to the changing consumer values in order to produce products that are relevant to the market. This way, businesses will be able to compete effectively while still generating the much needed profit to the proprietors. On this basis, private businesses are characterized by flexible and effective strategies that enable the businesses to identify the ever changing consumer demands. This means that the businesses contribute to the social responsibility in the society by satisfying the customer needs. In addition, private businesses contribute to improved economic situations in a country by generating revenue to the government and providing employment to the citizens. This also forms part of the social responsibilities of private businesses even though the responsibilities do not lead to profit generation. On the other hand, it can be argued that since private businesses are private properties, they can only be used for making profits. Considering the fact that many western countries have an economic system based on capitalistic principles, many entrepreneurs in the private sector operate businesses for their own gains. This is arguably acceptable because it makes no sense to acquire a property that is of no help to the owner. Similarly, proprietors of private businesses have a reason to make profit generation the sole social responsibilities of their firms. This is because many proprietors are keen to expand their businesses in the shortest time possible in order to increase profit generation. In addition, profits can be used as an easier measure of success in the industry compared to other values such as social responsibility3. This is because there is a clear relationship between return on investment and the profits generated in businesses. Of more interest is that most of the private business owners view the profits generated in the business as the major source of motivation to continue being in operation. Surprisingly, many private businesses engage on corporate social responsibility with an ultimate aim of increasing profit margins. Since the decisions to engage in corporate social responsibilities are made by individuals, either the proprietors or employees of private businesses, it is likely that the involvement in the social responsibilities can be translated into real profits generated in the business. It can be argued that corporate social responsibilities are used as a mask to attract profit generating activities in the businesses. This is because most of the corporate social responsibility activities are associated with things to do with rebranding, improved employee and customer relations and general improvement in the quality of management. These factors are the key drivers of financial returns in private businesses and many proprietors would not jeopardize their profit returns through poor management of these essential profit drivers. In addition, it is a common knowledge that many private business use corporate social responsibility as a tool to lure governments in making legislations that favor their business activities. In conclusion, private businesses focus mainly in profit generation in order to survive in the competitive markets. This can be attributed to the sources of revenues used in setting up private businesses. This is because unlike public businesses, private businesses are properties used for personal development by their owners. In addition, financial contributors in private business expect good returns on their investments. However, from the above discussion, it is evident that private businesses end up fulfilling other social responsibilities while striving to accomplish their main objective of making profit. This is mainly through provision of quality services and products to the customers and improvement of economic status in the society. Bibliography Campbell, J. L, ‘Why Would Corporations Behave In Socially Responsible Ways? An Institutional Theory of Corporate Social Responsibility’, Academy of Management Review, 2007, Vol. 32, No. 3, 946–967, retrieved 15 May 2014, < http://www.deakin.edu.au/__data/assets/pdf_file/0008/156923/oxford.pdf >. Harvard Business School, Is Profit as a “Direct Goal” Overrated? 2010, retrieved 15 May 2014, < http://hbswk.hbs.edu/item/6454.html >. Wetherly, P and Dorron Otter, The Business Environment: Themes and Issues, 2 edn, Oxford Publishers, New York, 2012 p. 15 Read More