When it comes to defining the word ‘Social Responsibility’ all of us are quite confident that its means every entity, be it an individual or an enterprise is responsible towards the betterment of the society at large. …
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Every organization works with the goal of making some money. Either they consider that as profit earned or that contribute to the society by providing value addition to their stakeholders or they need that money to re-invest and cover the cost of their running business. But in any-case money is required. Thus, if a businessman complies to the social responsibility only, he/she will be required to behave in many ways which provide no benefits and in some cases loss to the owner of the business. For example, if he starts hiring hardcore unemployed people in the organization for contributing to reducing unemployment from the society and not well equipped and highly qualified workers, the company’s performance will greatly suffer and the owner will be in great debts ultimately.
Jhon Mackey has made a major mistake in statement where he openly declared that the shareholders have the right to leave the company and invest their money elsewhere. This portrays his un-professional attitude, as the investors and the shareholders are the major assets for the company form where all the funding is coming in. For any business, it is very essential that the shareholders and the investors remain happy with the company’s and its employee’s performance, else the company will not survive and go bankrupt.
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Corporations are a part of the society and usually have huge reserves, human as well as financial, at their disposal. It is the responsibility of every organization to use those resources for the betterment of mankind instead of only focusing on the generation of maximum profits.
With the growing challenges for the society, more institutions and nations are now working together to encourage human rights, protect individual property rights, the rule of the law and to protect the environment. The social entities have rewritten or reframed the roles and responsibilities of the businesses keeping parity with recent changes and urgency.
Social responsibility also refers to a company’s obligation to maximize its positive impact while minimizing its negative impact on the society (William & Ferrel, 2011, p. 94). The International Institute of Sustainable Development explains that social responsibility is a term without a single authoritative definition.
Ethics, while clearly evident when examined externally, are usually less clear when viewed from the perspective of those who have to live with the consequences. Friedman’s (1970) indictment against the state of the corporate entity as a socially responsible manifestation, however, denies the ethical responsibility of the corporation and places it in the space that is common to US and UK belief systems on the position of the corporate entity.
Social Responsibility of a Business.
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.
history, the demand for and scrutiny of ethical corporate governance is at an all time high (Graham, Litan, Sukhtanker 2002). These scandals and others, coupled with the expansive growth of the global economy and increased consumer awareness regarding environmental issues, has denoted a need for change in previously successful business models of increasing profits.
But CSR is a vast area and naturally demands a huge effort on the part of the corporate sector. The term 'CSR' first originated in the US in the 1950s though its concepts are very old. The Co-operative Bank, Ben & Jerry's and Body Shop have made their name on CSR-style ethical principles before the term was coined (Internet, The story so far).
John Mackey, CEO of Whole Foods, stated that social responsibility undersells the humanitarian dimension of capitalism. He also does not believe that long term shareholder value is not maximized by donating time