Social Responsibilities of Businesses: Beyond Maximizing Profits

This article argues that businesses have social responsibilities beyond maximizing profits. Fulfilling moral, environmental, and societal obligations can benefit the company by increasing employee satisfaction, customer loyalty, and brand image, and avoiding government regulation. The article provides evidence from various studies and sources to support the importance of fulfilling social responsibilities.

As well as making money businesses
also have social responsibilities
Do you agree or disagree

TABLE OF CONTENTS
Arguments in favour of fulfilment of social responsibilities of a business.....................................3
REFERENCES................................................................................................................................6

Arguments in favour of fulfilment of social responsibilities of a business
I totally agree with the statement that a business has to fulfil the social responsibilities along
with making money. Social responsibility means that the business has to work towards the
betterment of the society and take measure that benefits the society and environment along
with maximising the shareholder value. Fulfilling its moral imperative of social responsibilities
also helps a business in achieving its prime directive which is maximisation of shareholder
value. As in this modern era, suppliers as well as customers prefer companies who adhere to
their environmental and social responsibilities(Sroka and Szántó, 2018). It will not be idealistic
to expect from businesses that they would direct all their activities for benefits of the society,
but the concept of social responsibilities is that they should try to maximise their profits by
working in a socially responsible manner. This means that to maximise the shareholder value
they should work in a way that is beneficial for all its stakeholders and the business should also
not ignore the interests of other groups like consumers, workers, etc. Social responsibilities are
generally a business’ sense of responsibility and the voluntarily duties carried out by the
business organisations that goes beyond the duties and activities dictated by law. The
arguements in favour of social responsibilities are-
Moral responsibility - A business’ existence depends on the society as it procures the resources
for its input from the society and disposes its production through output to the society. It
acquires its input like machines, manpower, material, etc. from the society and environment
and converts them into outputs that are sold as products or service in the society. As the
business uses various resources of the society, it should pay it back in terms of services that
would benefit the environment, consumers, workers and community as a whole(Voronkova
and et.al., 2020). Even the International Organization for Standardization states the importance
of a business maintaining a balance between enhancing their economic performance and
fulfilling their social responsibilities. To decrease their negative impact on environment,
business can use resources in an efficient way to limit their waste and reduce carbon footprint
and emission. And to adhere to their responsibilities towards people, they should ensure ethical
practices and policies for employees by offering fair opportunities and wages.

Employee satisfaction - The employees in a socially responsible business are generally more
motivated and have higher morale as the company tries to keep the interest of its employees as
well. Motivated workers tend to be more productive and efficient as they tend to work in ways
that could reduce wastes and make optimum utilisation of the resources. This in turn increases
the company’s productivity and value thus increasing profitability too. Even the employees
these days prefer to work in companies that have a strong sense of purpose(Jehan and et.al.,
2020). This study is also backed up by Harvard Business School. To fulfil the responsibilities
towards its employees, the business must recognise the rights of workers and ensure there is no
discrimination between employees and they get a healthy working environment.
Consumer awareness - Customers also tend to be attracted and stay loyal to the business and
brands that are socially responsible and committed to support the environment and community.
Customer retention and loyalty are key elements for long term success and growth of the
company. A business can fulfil its responsibilities towards customers by providing their
products at fair prices and should not supply unsafe and shoddy products. The business should
also provide consumers appropriate after-sales services. Many research conducted in this field
show that consumers do not buy products from a company that support the issues that are
contradictory to their beliefs(Popescu, 2018). One can take Tesla as an example where the
environmental conscious consumers were attracted by the company’s green automotive
products and electric cars.
Environmental obligations - The foremost social responsibility of a business is towards the
environment. The business should take measures to ensure that their activities do not damage
and harm the environment. This can be done by trying to reduce air and water pollution as
environment pollution is greatly hazardous to people’s health. The company should also focus
on increasing the energy efficiency in its operations. Company’s actions towards reducing
usage of plastic and other non-biodegradable wastes can help the environment in the long run.
Societal obligations - The business fulfils its responsibilities towards the society as a whole by
producing goods and providing services to meet the requirements of the society and also by
providing employment to the people(Latapí Agudelo, Jóhannsdóttir and Davídsdóttir, 2019).
Many companies take part in various charities that provide scholarships to students or help in
eradicating poverty, provide food and shelter to needy, etc.

Better brand image - Socially responsible businesses have a better brand image which not only
attracts customers but also investors. As it increases the investments in the business, the
financial prospects of the business eventually improve. Such companies also gain a competitive
advantage and are more sustainable in the long run.
To avoid government regulation - It is essential for a business organisation to acknowledge and
perform its social responsibilities to enjoy the freedom and flexibility in the long run. By
voluntarily carrying out these duties, the business can avoid government intervention as it can
sometimes lead to adverse effects on the business and its image(Ferrell and et.al). Government
and legal bodies of many countries have passed legislations and regulations to safeguard the
interest of the society and protect the environment from extreme harm.
All the above arguments prove that a business must recognise and fulfil its social
responsibilities towards the various sections of the society and environment. This will not only
be beneficial for the society but for the company as well. This will benefit the organisation in
achieving its primary target of maximisation of shareholder’s value and increase in profitability
as now-a-days employees, customers, suppliers, etc. are aware about the need and importance
of fulfilment of social responsibilities. Hence, a company should adhere to its obligations of
responsibilities towards employees, customers, community, environment and society as a
whole.

REFERENCES
Books and Journals
Ferrell, O. C. and et.al., 2019. Business ethics, corporate social responsibility, and brand
attitudes: An exploratory study. Journal of Business Research. 95. pp.491-501.
Jehan, N. and et.al., 2020. Relationship between organisational virtue and perceived role of
ethics and perception of social responsibility in business: testing a mediation
model. International Journal of Business Governance and Ethics. 14(2). pp.166-180.
Latapí Agudelo, M. A., Jóhannsdóttir, L. and Davídsdóttir, B., 2019. A literature review of the
history and evolution of corporate social responsibility. International Journal of
Corporate Social Responsibility. 4(1). pp.1-23.
Popescu, D. I., 2018. Social responsibility and business ethics: VII. Circular economy and the
role of corporate social marketing. Calitatea. 19(163). pp.118-121.
Sroka, W. and Szántó, R., 2018. Corporate social responsibility and business ethics in
controversial sectors: Analysis of research results. Journal of Entrepreneurship,
Management and Innovation. 14(3). pp.111-126.
Voronkova, O. Y. and et.al., 2020. Corporate social responsibility of business as a factor of
regional development. Entrepreneurship and Sustainability Issues. 7(3). p.2170.