Social Responsibility of Business: Theories, Examples, and Impact

This report provides a comprehensive overview of the social responsibility of businesses, also known as Corporate Social Responsibility (CSR). It delves into the core principles, emphasizing ethical conduct towards social, environmental, and economic factors. The report examines the importance of CSR in enhancing profitability through high-quality products and services. It discusses contrasting theories, including Stakeholder Theory, which prioritizes the obligations of a business towards various stakeholders affected by its actions, and the Triple Bottom Line, which focuses on economic, social, and environmental sustainability. Furthermore, the report highlights the benefits of CSR activities, such as improving public image, customer retention, access to funding, brand awareness, competitive advantage, and cost savings. The report concludes by reiterating that social responsibility is crucial for businesses to achieve sustainable profits and growth by considering the needs of society.

Social Responsibility of
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1) Critically discuss this statement using contrasting theories and an extended example that
illustrates Socially Responsible behaviour..................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Social responsibility in business is also called Corporate Social Responsibility (CSR)
where organisations and people behave and conduct business in ethical manner towards cultural,
environment issues, social and economic (Eriksson and Svensson, 2015). Business should
conduct all those activities and operation at marketplace which should not harm their customers
and employees. The main social responsibility of any business is increasing their profits in
effective and efficient manner through providing high quality products and services. This report
highlights about concept of social responsibility along with using various theories and models.
MAIN BODY
1) Critically discuss this statement using contrasting theories and an extended example that
illustrates Socially Responsible behaviour
Social responsibility is also called corporate social responsibility which uses resources
and engaging activities designed to increase profits at free competition without any frauds.
According to the provided statement, questions has raised that business should engage
themselves for social responsible activities. The main aim of corporation is making profits at
market. The different approaches to new responsibilities are:
Stakeholder Theory
This theory was designed by Edward Freeman and others which represent corporate
social responsibility (Fernández and Rajagopal, 2014). Instead of initiating business and looking
towards world they should consider obligations for stakeholder theory. This theory assist in
describing about those group and individuals who are affected by actions of organisation.
According to this theory, who are touched by business hold certain rights and obligations to
participate and direct it. For example, whenever factory produces industrial waste then there is
attachment of CSR responsibility which is directly link to factory owners for disposing it safely.
This theory begins when individual lives in the society and focus on business ethics. They are
regarded as stakeholders of organisation and contributing in corporate decisions.
For example, if organisation produces chemical for industrial use then they have to
includes different stakeholders such as workers, owners, suppliers, creditors, local business,
government entities and so on. It is very important to consider need and demand of society and
accordingly produce products as per their requirements. In today's era, stakeholder are the person

who are liable for profits and gains of business at market place. Other example can be there are
many organisation which produces tobacco which is harmful for society though they are earning
huge amount of profits. It is not the part of corporate social responsibility. It is very important to
consider society need and requirements in effective and efficient manner.
Whenever there is identification of stakeholders at surrounding then there is rise of
stakeholder ethics (Gray, Adams and Owen, 2014). Its main purpose is maximizing profits.
There is collective bottom line which summarised about effect of company's action towards all
stakeholders. The main objective of business is maximising profits and gains of business in
effective and efficient manner. The stakeholders of company are treated like shareholders of
organisation who focus on business goal and objectives in effectual manner. There should be
transparency in order to increase value for promotion of stakeholder ethics in appropriate
manner.
The stakeholder and shareholder analysis are different from one another. This theory
focus on creation of value for stakeholders which includes suppliers, communities, customers,
employees, shareholders and so on. This has increased and use in both personal and professional
life. This can change behaviour of society and its people in effectual manner which is required
more for carrying out activities and operations of business. Therefore, with fulfilment of society
need and demand, profits should be earned in effective and efficient manner so that maximum
output can be achieved.
Triple Bottom Line
It is defined as theory which focus on corporate social responsibility where leaders of
organisation tabulate about bottom line results not in economic terms rather than in terms of
social and environment (Hack, Kenyon and Wood, 2014). When there is intersection of
economics and ethics, sustainability provides long term maintenance of balance. There are three
aspects of triple bottom line theory which are described below:
Economic Sustainability- This provide long term financial solidity over volatile that can
be short term profits also which can be more or less. It is responsibility of large corporation to
create business plan to run their business and activities in an effective and efficient manner. It all
depends upon favour of duration when organisation was started operating their business at
market place. In this line, business should be valued and does not use quick reaches to become
rich and bear losses. The economic growth can be obtained by business through manufacturing

of high quality products and following of ethical values and principle in effective and efficient
manner. Therefore, main business is to increase profits by following social responsibility at
marketplace.
Social Sustainability- It is defined as balance in live of people and the way of living by
them at society (Hilson, 2012). There are many fortune company which is declining over years
and living their live with single penny. There is imbalance as rich are becoming more richer and
poor are becoming more poor which leads society to get anger and rise in revolution among each
others. There is rise in threat of governmental laws and regulations which impact society in both
positive as well as negative way. For business to be stable over long term, opportunities there
should be spread of many aspects and factors. They can follow fair trade movement for sharing
of equal wealth and opportunity. This requires human respect rather than ending with dollars.
The workers should not be treated like machines and tools. Therefore, social sustainability needs
to consider requirement of people of society in effective and efficient manner. This helps in
achievement of better outcomes.
Environmental Sustainability- This begins from affirmation of natural resources such
as clear air, water, oil fueling our engines. If these things keeps on deteriorating then future
generation will not be able to enjoy their life quality life experience. The conservation of
resources is regarded as important for development of new sources of energy which can leads for
substitute. There are many organisation which deals in industrial chemical that harm society and
environment. They have to use different tools and techniques for better achievement of results so
that maximum output can be gained. For example, harmful chemical manufacturing business
earn maximum profits and gains which leads to impact health of society people.
Therefore, this triple bottom line is important theory for corporate social responsibility. It
is very important to consider each and every aspects so that better results can be achieved in
effective and efficient manner.
Corporate Social Responsibility (CSR)
Corporate social responsibilities are considered as very important activities as it is helpful
for society as well as business (Homburg, Stierl and Bornemann, 2013). These activities are
essential for protecting environment and society as well as help business to earn more and more
profits. Company is using various resources of society as well as environment so it is important

to full fill their responsibilities towards society. Importance of CRS activities of organisation in
order to increase profitability is mention below.
Improve public image: CRS activities are very important in developing strong public
image and this will have huge impact on sales of company (Kolk, 2016). By conducting various
social activities as well as providing benefits to society, organisation can create new and positive
brand image in market area. Customers will also like purchase product from well known
company so it will increase the profits of business.
Customer retention: Company can conduct different corporate social responsibilities for
the welfare of society. These activities will be very helpful in attracting as well as retaining
customers. Business is developing strong market image through corporate social activities and
this is very helpful in influencing customer to buy product from their company. Customer will
also choose those company which is providing benefits to there society.
Access to funding: Organisation can access funds easily by conducting various corporate
social responsibilities. Company need funds and other financial resources to conduct their
business activities as well as corporate social responsibilities. By implementing different CRS
activities company can easily access to funds from different sources. Access to funding will be
very helpful in conducting business activities in more effective and efficient manner. This will be
very helpful in enhancing profits of organisation.
Brand awareness and recognition: Corporate social responsibilities are very helpful in
developing strong brand image in market area ( Kotchen and Moon, 2012). These activities leads
to create brand awareness and recognition in market where company is offering its products and
services. In corporate social responsibilities company committed to conduct business in more
ethical manner and its creates a positive perception in customer mind. By creating brand
awareness and recognition in market area company will be able to attract more customers and
influence them to purchase product from their company.
Competitive advantage: CRS activities are very helpful in gaining competitive
advantages over other rival companies. Organisation which is executing different corporate
social responsibilities in order to provide some benefits to society they can attract more customer
as well as gaining competitive advantages over its rival company. All of these activities are very
helpful in building strong and positive brand image in market area as well as targeted customers.
This will leads to have competitive advantages over its competitors company.

Cost saving: By conducting different CRS activities company is able to attract as well as
influences more customers (Kraus and Brtitzelmaier, 2012). This lead to reduction of marketing
activities and save the cost of company. Business can conducting its activities is effective and
efficient manner with less cost and improve the profits of business. CRS activities will directly
enhance the sales and it lead to improve profits.
CONCLUSION
The presented report concluded that social responsibility of business helps in increasing
profits of enterprise in effective and efficient manner. It is also called corporate social
responsibility as each and every business running their activities and operations at marketplace
has to consider need of society. There are different theories which are used for describing social
responsible behaviour of organisation and individuals that leads to better outcomes. Therefore,
with the fulfilment of society people need and demand leads to enhance profits and gains in
appropriate manner.

REFERENCES
Books and Journals
Eriksson, D. and Svensson, G., 2015. Elements affecting social responsibility in supply
chains. Supply Chain Management: An International Journal. 20(5). pp.561-566.
Fernández, A. M. L. and Rajagopal, 2014. Convergence of corporate social responsibility and
business growth: an analytical framework. International Journal of Business Excellence.
7(6). pp.791-806.
Gray, R., Adams, C. A. and Owen, D., 2014. Accountability, social responsibility and
sustainability. Pearson Education Limited.
Hack, L., Kenyon, A. J. and Wood, E. H., 2014. A critical corporate social responsibility (CSR)
timeline: How should it be understood now. International Journal of Management
Cases. 16(4). pp.46-55.
Hilson, G., 2012. Corporate Social Responsibility in the extractive industries: Experiences from
developing countries. Resources Policy. 37(2). pp.131-137.
Homburg, C., Stierl, M. and Bornemann, T., 2013. Corporate social responsibility in business-to-
business markets: How organizational customers account for supplier corporate social
responsibility engagement. Journal of Marketing. 77(6). pp.54-72.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Kotchen, M. and Moon, J. J., 2012. Corporate social responsibility for irresponsibility. The BE
Journal of Economic Analysis & Policy, 12(1).
Kraus, P. and Brtitzelmaier, B., 2012. A literature review on corporate social responsibility:
definitions, theories and recent empirical research. International Journal of
Management Cases. 14(4). pp.282-296.
Tayşir, E. A. and Pazarcık, Y., 2013. Business ethics, social responsibility and corporate
governance: Does the strategic management field really care about these
concepts?. Procedia-Social and Behavioral Sciences. 99. pp.294-303.