Role of Social Responsibility in Business

This report discusses the role of social responsibility in business organizations and the methods and approaches used to fulfill social duties. It analyzes the concept and complex range of businesses' social responsibility, the application of philosophical and practical models to specific situations, and the audit skills for evaluating the ethical and sustainable standing of organizations. The report focuses on BMW, Google, Microsoft, and Lego as case studies.

MODULE: Social
Responsibility of Business
Supervised by

Table of Contents
INTRODUCTION...........................................................................................................................3
a) Concept and complex range of businesses (SME) social responsibility.................................3
c) Application of philosophical and practical models of social responsibilities to specific
situations.....................................................................................................................................4
d) Audit skills for evaluation of the ethical and sustainable standing of a range of
organisations...............................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Social responsibility in business basically deals with various duties which company has
to fulfil towards society. Every company has aim to earn maximum profits apart from that it is
important to contribute towards welfare of society and towards external environment (Ehie,
2016). This report based on various dilemmas which business faced while adopting such
responsibilities, application of practical & philosophical models is done and then several audit
skills are applied for evaluating sustainability and ethical standing of various organisations. In
this report, BMW, Google, Microsoft and Lego are taken into consideration and how these
companies adopt social responsibility in their operations is analysed.
a) Concept and complex range of businesses (SME) social responsibility
Social responsibility can effectively be considered as the businesses, that helps in
maximizing different range of shareholder values that helps in maintaining the reputation within
the market in a manner that benefits not only to the company but to society as well. In other
words, it can be said that social responsibility has become increasingly important to investors
and consumers who seek investments that are not just profitable but also contributing towards
welfare of the society and environment as well. If it is talked about the concept of social
responsibility then it is said to be something, which is carrying the ethical framework and
focuses on a particular entity, which could be anything from an organization or individual.
Basically, it has an obligation and a duty for every individual, as it has to be performed in order
to maintain a balance between the economy, values and ecosystem.
On this concept, many critics have given their arguments that nature of business has not
basically considered society as stakeholders. But, over the years it can be said that many
individuals have stated that social responsibilities has specifically been a part of large
multinational business organisations. But, in fact it is related to small and medium-sized
enterprises (SME), has effectively been a much more considerable forefront in regards to (Social
Responsibility). This has helped in natural engagement among local communities. On the other
hand, with SMEs turning over £1.9 trillion and responsible for 60 of UK private sector
employment¹ in 2017, their role in voluntarily promoting positive environmental and social
change is significant (Mihaljević and Tokić, 2015). Basically, there are ample number of theories
like friedman vs freeman, stakeholder, triple bottom line theory and so on, that can effectively be
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utilised to analyse the complexness of businesses in regards to social responsibility. Whatever
the organisation’s size, people and the planet really should be on a par with profit these days. In
the present context, it can be said that small, medium and large level of organisations has
considered different range of social responsibilities and these are presented underneath:
Micro/small business (Street shops and small enterprises), most small business
enterprises carries thinking as they are being socially responsible only considering the support
that they are giving towards the local economy and along with the community i.e. being
profitable or by employing number of staff members (citizens of a particular country), but it does
not consider recognitions in regards to importance of other obligations or duties. Here, it can be
said that some of the key areas that these firms takes into considerations are : environmental
management, communities, employees and supply chains and many more.
Medium level business organisations, this type of organisation consider or plays an
important role for economic conditions of a country. There are many companies that has given
employment to handicapped people so that they can support society from their own side. but
again this has not been considered as one of the important areas for these types of business
organisations are coming under medium level. Along with this, if it is talked about large level of
business companies like Google or Lego then these companies performs ample number of CSR
activities so that they could easily support the society and manage their brand image as well
within the market (Wagner-Tsukamoto, 2015). Activities can be anything from distributing
books among different schools, providing people that are below the poverty line with blankets
and other clothes based on the season and so on. On the other hand, if it is talked about social
responsibilities of SMEs, then they promote these practices to achieve competitive advantages in
their relationship with stakeholders.
c) Application of philosophical and practical models of social responsibilities to specific
situations
In the present context, there are ample number of philosophical and practical models of
social responsibilities that are helping business organisations in maintaining their core at
marketplace and some of these are Traditional Conflict Model, Added Value Model and so on.
All of these models are presented with situations that the different companies has faced in
regards to social responsibility.
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Basically, traditional conflict model related to tu social responsibility, social values and benefits
are seen as in conflict with shareholder profits. Under this model, if applied weather in the
Google where the situation is that shareholders of the company are not ready to invest more just
because they had this thought of that practising social responsibility for performing any sort of
act could lead the company to add cost in their products or services offered by them. In the
present context, this type of model is being applied after focusing upon nature of business and
regards to trade-offs between economic and moral values, and corporate managers that may
directly look into equity value shareholders that are having. shareholder equity value. (Visser,
2016). Along with this, one of the primal CSR model that can be applied and i.e. Carroll's CSR
Pyramid. Basically, Carroll's CSR Pyramid, based on this model, CSR is said to be built over
foundations in regards to profit to profit as they may come first for Google and Microsoft, After
that, need for Microsoft and Google and is also it will also be required to ensure over complying
with all laws & regulations. Including this, just when Google along with Microsoft, it will be
required to focus upon philanthropic options, it also needs to meet its ethical duties.
EFQM, This is said to be the Model, which is specifically linked with global context,
where recognising the management framework which allows both Microsoft and Google to attain
success through measuring where they are on the path towards transformation, helping them
understand the gaps and possible solutions available, and empowering them to progress and
significantly improve their overall performance level of both the business organisations (Google
and Microsoft).
On the other hand, Added Value Model can also be considered as one of the crucial
model that could help in understanding the concept of social responsibility. This could be
understood without very good situation of Microsoft where the company has kept its focus on
reducing the radiations that are emitted by CPU and other types of devices that company has
built. Under this, considering social along with the environmental considerations has always
been used to improve the overall profit margins. But, stakeholders of this organisation that is
Microsoft are basically 310 to focus upon conflicts that may perceive among business decision
making as they are the one who are basically investing on all the activities that the company is
serving to their customers (von Schnurbein, Seele and Lock, 2016).
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d) Audit skills for evaluation of the ethical and sustainable standing of a range of organisations
Ethics can be defined as different range of moral principles that effectively helps in
governing a person's behaviour or the conducting of an activity. Freeman vs Friedman, have
always considered to be very contrasting opinions in the context of achieving all goals and
contain all such responsibilities on the basis of a business. In the context of the world wide
famous company Google. Co. and Lego, if they start in the perspective of freeman it states that
one person who has most of the power in commodity shall be providing giving directors of such
claiming in the firm. In this there is no such results to such and it always reaches to an impasse.
In the context of freeman companies like Lego, Google and more shall be divided in proportions
to stakeholders and competitors and customers, here any person can claim to become a member
of people and in the end like google its shares are public but to limited journals of people and it
had invested in the stock market but overall it cannot be declared to be centrally owned company
(Oh, Hong and Hwang, 2017). The ultimate goals are to gain monetary revenues and figure out
the fact that one person has to claim the main purpose of such maxims and claim all such
expenses which are bared by company final stakeholders issues is complicated in both and one
shall provide the correct understanding and apply such methods to which the company shall gain
monetary benefits and goals shall be achieved by them.
Triple bottom line, it is a framework or a theory which mainly recommend and suggest
that companies and organisations need to focus on social as well as environmental concerns just
like they do for earning profitability. It is an accounting framework which mainly includes three
parts such as social, financial and environmental. It is a framework which mainly includes three
parts such as People, Planet, Profit. With the help of this, the company will be able to support its
sustainability.
It has been analysed that some of the organisation adopt triple bottom line approach in
order to evaluate and examine their performance so that they can create greater business value at
the competitive marketplace. In the present context of Google and Microsoft, it has been found
that Triple Bottom Line is an approach which is required to perform by the management team of
organisation in order to enhance their surroundings and environment. With the help of this
approach it has been said that managers of Google and Microsoft could effectively use this sort
of framework which not only earn profitability at the marketplace but also create positive brand
image by enhancing and improving the lives of people. Apart from this, it is the approach which
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assist in creating a positive image of the Microsoft and Google at the competitive marketplace
and gain various opportunities (Lee and Lee, 2015).
On the other hand, if it is talked about Stakeholders of Google and Microsoft then both of them
carries different range of perceptions from each other. This could be understood with good
example of a situation where Microsoft has considered an event which is to collect all the
scrapped motherboards, chips and other plastic materials that has been utilised in the PC
cabinets. This social act was done to recycle the waste materials which were of no use of its
users. In the present context the perception of their stakeholders (investors) was that the
company investing in this social responsibility act will not even provide them major benefits.
Apart from this, it was required for them to understand about how badly all the plastic
materials has been destroying the environment. On the other hand, if it is talked about Google
then this company’s current CSR efforts are comprehensive and satisfactory, based on
international standards and expectations. In order to fulfil all the requirements, a situation has
been taken into consideration where employees were being as one of the important stakeholders
that are playing a crucial role. For example, many workers want to work for Google because the
company is perceived as one of the best firms to work for. This stakeholder group is important
because they define the company’s capabilities, such as the capability to innovate rapidly.
CONCLUSION
From the above mentioned report, it has been concluded that social responsibility plays a
very important and essential role in each and every business organization. Thus it helps business
in effective working and also helps in doing social welfare for the society. In this report role of
social responsibilities is discussed in brief, as they it helps business ineffective operations. For
illustrating social duties some important methods and approaches are used by management of
business organization such as freeman vs Friedman, triple bottom, stakeholder analysis in an
effective and efficient manner.
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REFERENCES
Books and Journals
Ehie, I. C., 2016. Examining the corporate social responsibility orientation in developing
countries: an empirical investigation of the Carroll's CSR pyramid. International
Journal of Business Governance and Ethics. 11(1). p.42755.
Mihaljević, M. and Tokić, I., 2015, January. Ethics and philanthropy in the field of corporate
social responsibility pyramid. In Interdisciplinary Management Research XI.
Visser, W., 2016. 19. The future of CSR: towards transformative CSR, or CSR 2.0. Research
Handbook on Corporate Social Responsibility in Context, p.339.
Wagner-Tsukamoto, S., 2015. What ethics? Economizing the Carroll pyramid of corporate social
responsibilities (CSR).
von Schnurbein, G., Seele, P. and Lock, I., 2016. Exclusive corporate philanthropy: rethinking
the nexus of CSR and corporate philanthropy. Social Responsibility Journal. 12(2).
pp.280-294.
Oh, S., Hong, A. and Hwang, J., 2017. An analysis of CSR on firm financial performance in
stakeholder perspectives. Sustainability. 9(6). p.1023.
Lee, J. and Lee, Y., 2015. The interactions of CSR, self-congruity and purchase intention among
Chinese consumers. Australasian Marketing Journal (AMJ). 23(1). pp.19-26.
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