Social Responsibility of Business: Increasing Profits

This essay discusses the concept of social responsibility of business and its impact on increasing profits. It explores different theories, such as socio-economic theory, added value theory, stakeholder theory of Corporate Governance, and triple bottom line theory. The essay provides examples of socially responsible behavior in business and highlights the importance of balancing profit, people, and planet.

Social responsibility
of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
The social responsibility of business is to increase its profits.....................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Corporate social responsibility refers to self regulating model which assist corporations for
becoming socially accountable to its stakeholders, public and also itself. Corporations owe
greater duty for stakeholders along with communities through possessing social conscience
(Aluchna, 2018). There are multiple types of activities and operations performed by business
enterprise with the hope of enhancing margins of profits. To understand corporate social
responsibility, Airdri Limited is considered. The company have developed corporate social
responsibility with ultimate objectives to provide opportunities for positively contributing
towards local community of Oxfordshire in order to gain huge profits. The present essay is about
the statement that is “Social responsibility of a business is for increasing its profits”. The essay
involves critical discussion on the statement through contrasting theories addition to extended
examples which illustrates socially responsible behaviour of business.
MAIN BODY
The social responsibility of business is to increase its profits
Business has main social responsibility for increasing its profits in the competitive scenario.
To attain this, multiple efforts are made by entire team of organisation. As per the viewpoints of
Pineda (2018), social responsibility is one of ethical framework which obliges each member of
organisation to act together with behave in the ways which benefits in entirety. As per socio-
economical theory of corporate social responsibility, business concern has responsibility for
promoting interest along with making huge profits. There is complex range of business social
responsibilities. One is economic business responsibility for maximising profitability just not for
attending stakeholders interest but also for making contribution towards economic progress. For
example, Airdri Limited is a small sized business that has grown for meeting customers and
society needs for staying ahead in hand dryers trends (Airdri Limited, 2020). The business is
integral actor in developing economy along with building nation. It have simple vision that is
believing that people with autism deserve as well as learning disabilities for living life to fullest.
It is more traditional economic theory which echoes the role effectively in order to generate huge
profits and ensuring to pay all types of taxation that are levied by government. Moreover, when
business are unable to manufacture and distribute profitable products addition to maintain
sustainability then it becomes quite complex for them to attend all the succeeding
1

responsibilities. In context to Airdri Limited, it initiates its practices through assessing needs of
children and individual support they comes in long way to provide economic friendly hand
dryers that are affordable by all income people with the aim of making huge profits. Another
business responsibility is legal business responsibility. The idea of laissez faire business is in
existent in modern economies. It is seen in United Kingdom that businesses are free to work and
act as they pleased without any restrictions. However, in present era, government of a nation has
become business regulators to maintain integrity in practices together with protect public
interest. Furthermore, they are obliged to follow all laws which concern their existence. Over
course of 2018, it is organising number of events, donations and many more to fundraise charity
addition to offering tours and sheltered experiences to service users that help it to make large
revenues (Airdri's 2018 Charity Partnership. 2020).
Ethical business responsibility is one of range among business responsibility that is all about
impacts organisational of decisions and actions on stakeholders in varied ways. This gives
Airdri Limited obligations for following ethical standards, values etc of society in which it
operates. The company makes ethical attempts that are expected by society and are codified by
law. Its main responsibility for society is to make certain attempts that benefits the society but
not harm any of its surroundings. The other one is philanthropic business responsibility which is
depended on the ways business sees themselves as active members along with contributing factor
in society (Lacoste, 2016). It implies that an organisation have duty for giving back in many
ways along with increase its profits so to contribute widely in betterment of society. Some
businesses become philanthropic without making much spending while some holds capability
building seminars and fundraising activities. In case with Airdri Limited, it donates funds and
its hand dryers to the needy people. Along with this, it also donate funds to protect scarce
natural resources through using recycled materials in packaging of hand dryers.
According to Friedman, a business have one and only one responsibility for using its
resources together with engaging in activities that are particularly designed for enhancing profits
as long as it stays within game rule, that is to say, engaging in free competition without fraud. It
has been argued by Friedman that organisations must only emphasis towards those practices
which are related to profits, effectively excluding charities which do not generate any direct
revenues. In contrary, statements or views of Freeman for corporate social responsibility are that
main responsibility of entity is to create or devise values for stakeholders as well as fulfil its
2

responsibilities for them. It is argued by Freeman that stakeholder approach to company is suited
towards integrate ethics, societal considerations and many more. The organisation that uses
concepts and theories of Freeman are responsible to take account of needs and wishes of many
great people. While the businesses which adopts theory of Friedman are majorly responsible
towards enhancing profits to benefit shareholders.
In accordance to Bhaduri and Selarka (2016), it is critically evaluated that society is
collection of people in which individuals coerce others for conforming certain norms whole
others overrules and dictate social responsibility in varied situations. It is well said that there is
one and only social responsibility of corporation is to use resources together with engage with
activities that are specifically designed for increasing profits as long as the business stays within
rules if industrial games and engage in free competition without any fraud or deception.
Added value theory of social responsibility is the theory that sees social addition to
ecological commitments of business as means for enhancing profits. At the time when
proponents of the theory tend to acknowledge that disputes persists within decisions of business,
it is believed that corporate social responsibility investment have also competences for
generating new revenues (Cooper, 2017). In case with Airdri Limited, managers apply the
pragmatic model in order to focus towards issues or complexities in garbing attention of socially
conscious customers, managing risks related to negative press etc. For example, Airdri Limited
is facing complexities in confronting its social responsibility. With application of added value
theory, the managers have make their focus towards complexities including value of CSR to
attract socially conscious clients and managing risks with the means or objective of enhancing
profits to huge numbers.
It is also evaluated from the argument made by contemporary advocates of corporate
social responsibility that business concerns also have responsibility to enlarging profits through
making their concentration towards stakeholders as well as (Cui, Jo and Na, 2018). For this, they
apply Stakeholder theory of Corporate Governance. Common stakeholders of business in
present world include suppliers, customers, community and employees. Along with this,
stakeholders of specific organisation are individuals, groups along with companies which are
directly or indirectly influenced from the operations. In context to Airdri Limited, inclusion of
stakeholders is key for achieving success in increasing profits of entity. It creates a sense of
shared values that mitigates or reduces conflicts among stakeholders. These have huge ideas and
3

innovation that benefits the business in operating activities in the manner that leads to meeting
social responsibility that is making revenues. At same time, many business leaders of large
organisations believe that businesses have social purposes along with profitability that are nit
necessary to be mutually exclusive. These people also says that businesses not only have
responsibility for profit maximisation but also have responsibility for maximising or meeting
interest of each stakeholder that is part or associated with the entity in terms of workings or other
manner (Hillary, 2017). By applying the theory, Airdri Limited are able to analyse the level of
power as well as interest its stakeholders have on business. For example, employees are the
stakeholders that have low powers but high interest in what is going on business, how much
production and income is generated by it and so on. It has been evaluated that business are
responsible to maximise interest of all its stakeholders so that unique ideas and huge investment
are made in business resulting in making revenues for it. When the interest of stakeholders is met
promptly then this benefits the company to huge manner and assists it to execute that actions that
makes things possible for making and enhancing profits.
As per (de Bakker, 2016), it is evaluated that businesses must implement triple bottom
line theory for making emphasis on concerns related to society and environment just as they do
for increasing profits. The theory states that instead of one social responsibility, there must be
three that are profit, people together with planet. It sees to gauge an organisational level
commitment towards social responsibility of business along with its impacts on external
environment over time. in other words, the author of theory that is John Elkington says that a
business not only have responsibility for increasing financial profits but also to improve
individual lives along with planet. For example, Airdri Limited managers finds it difficult to
switch gears among priorities and responsibilities which are diverse in nature and maximises
financial profits while performing greatest good for its people and planet ( Airdri Limited, 2020).
In this situation, application of triple bottom line is advantageous for the business as it assist in
evaluating its performance in wider perspective for generating huge revenues along with
business values. The main element of the theory is people which are also said to social impact. It
is important for the company to emphasis for balancing individual lives and the ways they live
(Moratis and Cochius, 2017). Airdri Limited have huge responsibility towards its people that are
employees which are part of business works. For example, managers of Airdri Limited make
fair payment to its all employees and takes effective initiative for ensuring that they work in safe
4

environment at its workplace. The company also organises wide events, Initiatives as well as
donations on order to fundraise charity and offer organisational tours for its employees to meet
service experiences. The other element is planet which is also named as environmental impacts.
It shows that it is responsibility of business to make effective moves for reducing ecological or
carbon footprints as maximum as possible. The last element is profit which is essential
responsibility of business to be fulfilled to fullest. The company makes wide number of
strategies, implement them with discussion of stakeholders that results in making huge revenues
that is its key responsibility to compete in business environment. The team of Airdri Limited
executes strategies, tactics and programmes for achieving profit ratios as defined.
In range of organisations, managers evaluate ethical along with sustainability standing. In
case with Airdri Limited, the company performs ethical operations that drives its growth and
meets targets of profit in the competitive world. It is the most successful company which is
benefited from multiple trade services along with other practical support from its key people
(Feng, Wang and Kreuze, 2017). By making huge contributions in development of society
through paying taxation and others, the company stands in sustainable manner that assist it to
make improvements within its practices in order to achieve favourable outcomes in competitive
scenario.
From the viewpoints of different authors and application of theories related to corporate
social responsibility, it has been evaluated that some says that the sole responsibility of an
organisation is for maximising its profits. This is done through multiple ways (Lee, 2017). In
contrary, there are some theorists who propounded various theories associated for corporate
social responsibilities. With the evaluation it is analyse that other that maximising profits,
business have responsibility towards stakeholders, planet, people and profit.
CONCLUSION
The mentioned essay concludes that all businesses make efforts to meet their social
responsibilities for increasing profits in dynamic world. Social responsibility is a concept that
provides a structure to define mission, vision, objectives etc of organisation along with
expressing extent of its accountability together with obligations. The discussion is done on the
basis of various concepts and theories including socio-economical theory, added value theory,
stakeholder theory of Corporate Governance and triple bottom line theory. Socio economic
theory states that a business organisation has multiple responsibilities such as legal business
5

responsibility, economic business responsibility, ethical business responsibility and philanthropic
business responsibility. In contrary, added value theory states that a business is required to focus
on social and environmental commitments with the hope of maximising profits. However,
stakeholder theory says that it is social responsible of business to meet interest of all its
stakeholders that have powers and interest in company for increasing profits. At last, triple
bottom line theory reflects that a business have social responsibility towards safeguarding
people, protecting planet and increasing profits.
6

REFERENCES
Books and Journals
Aluchna, M., 2018. Corporate Social Responsibility vs. Business Strategy. Upravlenec, 9(4).
Bhaduri, S. N. and Selarka, E., 2016. Corporate governance and corporate social responsibility
of Indian companies. Springer Singapore.
Cooper, S., 2017. Corporate social performance: A stakeholder approach. Taylor & Francis.
Cui, J., Jo, H. and Na, H., 2018. Does corporate social responsibility affect information
asymmetry?. Journal of Business Ethics. 148 (3). pp.549-572.
de Bakker, F., 2016. Managing corporate social responsibility in action: talking, doing and
measuring. CRC Press.
Feng, M., Wang, X. and Kreuze, J. G., 2017. Corporate social responsibility and firm financial
performance. American Journal of Business.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Lacoste, S., 2016. Sustainable value co-creation in business networks. Industrial Marketing
Management. 52. pp.151-162.
Lee, D., 2017. Corporate social responsibility and management forecast accuracy. Journal of
Business Ethics. 140 (2). pp.353-367.
Moratis, L. and Cochius, T., 2017. ISO 26000: The business guide to the new standard on social
responsibility. Routledge.
Popescu, D. I., 2017. Social Responsibility and Business Ethics: IV. Social Responsibility and
Process driven by Customer. Quality-Access to Success. 18 (160).
Reverte, C., Gomez-Melero, E. and Cegarra-Navarro, J. G., 2016. The influence of corporate
social responsibility practices on organizational performance: evidence from Eco-
Responsible Spanish firms. Journal of Cleaner Production. 112. pp.2870-2884.
Online:
Airdri's 2018 Charity Partnership. 2017. [Online]. Available through: <https://airdri.com/airdris-
2018-charity-partnership/>
Airdri Limited. 2020. [Online]. Available through: <https://airdri.com/celebrating-45-years-of-
airdri/>
Pineda. E. M. 2018. Four social responsibilities of business. [Online]. Available through: <
https://www.versiondaily.com/the-four-social-responsibilities-of-a-business/>
7