Social Responsibility in Business - Essay Example

There are many stakeholders in an organization. Some of the important and direct ones are; shareholders, customers, employees, and vendors. The usual approach that is adopted by corporations (and advocated by Milton Friedman in the chosen article) is to increase the value for the shareholders and maximize profits as much as possible. John Mackay stated in the chosen feature that maximizing profits would not be the objective of stakeholders like employees and customers. Therefore, a business model should aim to provide value to all of their six stakeholders; customers, employees, shareholders, suppliers, societies, environment. This forms the basis of social responsibility. The following are some of the benefits of an ethical approach to managing a business:
- Increases the motivation of the employees,
- Produces better service and products for the customers as per their requirements,
- Earns a positive image for the company,
- Attracts new employees,
- Benefits the communities and environment.

‘Capitalism’ has been made notorious due to the concept of maximizing profits at all levels. This concept can be marketed in a better manner if it is realized that all constituencies need to be catered to in the management of any business. According to John Mackay in a feature on Reason.com; a socially responsible corporation should maintain a good balance between the interests of the investor, community, customers, and human resources of the corporation. Gebler (2010) stated that the employees, customers, and suppliers can evaluate if the company is conducting its business in an ethical manner or not. Employees should be able to trust them for their career development and bright future whereas customers should be assured of a consistent quality service and responsible production processes. Corporations should not strive to increase short-term profits; rather long-term value should be aimed.

The entrepreneurs of any business shape its direction and vision since they have ownership rights over the business. Their mission statements should constitute long-term plans for the provision of quality to their customers and ensure that their employees are satisfied with their job descriptions; these steps eventually increase the profits of an organization and cater to the interests of the shareholders. However, the stakeholders also possess a certain degree of power to influence changes in the business direction of the company, for example, many organizations give their shareholders the right to submit resolutions at the shareholder's meetings that might be held at regular periods. The shareholders can urge the company to change the direction or any business process for the welfare of society. The current investors have the right of approving the philanthropic actions that might be a part of the respective business’s vision.

John Mackay discussed the renowned retailer, Whole Foods, and their commitment to the social welfare of their communities. They follow a tradition of holding 5% days all around the year; 5% of the total sale on those specific days is given to a deserving non-profit organization for their social work in the communities. This campaign urges customers to spend more in those days and even introduces a new set of customers to their stores. Such a campaign earns new customers for Whole Foods, greater revenues, and a socially responsible status for the company in the market.