BUS3001: Social Responsibility of Business Essay - Feb 2020

This essay critically examines the statement "The social responsibility of business is to increase its profits," using contrasting theories and the example of the Red & Blue restaurant. The essay explores the multifaceted nature of Corporate Social Responsibility (CSR), arguing that it extends beyond mere profit maximization to encompass environmental protection, employee welfare, and consumer satisfaction. It discusses various aspects of CSR, including stakeholder needs, ethical business practices, and the Triple Bottom Line (TBL) model, which emphasizes social, environmental, and economic considerations. The analysis challenges the notion that profit is the sole driver of CSR, highlighting the importance of goodwill, consumer trust, and ethical conduct. The essay also touches upon skill audits, particularly market research and monitoring, as crucial elements for adapting to changes and maintaining effective CSR strategies. The conclusion emphasizes that CSR is a broad concept that integrates care for all stakeholders and their needs. The essay's framework underscores that businesses can only work in a socially responsible manner when they have extra money, which in turn enables them to manage the environment and society.

SOCIAL RESPONSIBILTIY

EXECUTIVE SUMMARY
The present essay is about the concept of social responsibility is to increase profit or not.
Corporate social responsibility is a concept which assist the companies in taking care of the
environment and the society in which business is operating. The present discussion took place
keeping in mind Red & Blue restaurant and its say on CSR. This discussion took place in order
to prove the statement wrong that CSR is directed towards increasing the profits. The discussion
evaluated different roles of CSR other than increase in profits. In the end it was agreed that CSR
not aims at increasing profits only but it is a wide area which includes taking care of all
stakeholder and their needs, increase in goodwill, increasing consumer satisfaction and many
other related issues.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
Range of business social responsibilities...............................................................................4
Model of social responsibility................................................................................................6
Skill audit................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Corporate social responsibility is the activity which needs to be followed by companies in
order to maintain and develop environment in which they operate. Thus, it is very necessary for
company to maintain its responsibility towards the society and environment because this is a
process which help companies in producing a positive impact over the society (Baik, Farber and
Lee, 2016). The present essay will discuss topic that is social responsibility of business is to earn
profits only. This topic will be discussed in regard of Red & Blue restaurant which is an
independently owned restaurant chain in Liverpool and aims at serving fresh food and drinks to
consumers. This statement will be critically evaluated with help of different theories and
examples.
Critically discussing whether social responsibility of business is to increase its profits or not
Range of business social responsibilities
In this modern and highly competitive world it is very crucial for businesses to take care
of the environment in which company is operating. However, this is majorly pertaining to the
fact that if business operates in isolation that is without taking care of environment then society
will not like the business. Thus, to maintain a good image within market and among the society
most important thing for businesses is to maintain and protect environment and society. The
corporate social responsibility is not only limited to environment or society but this also includes
consumers, employees, ethical working and many other practices which are correct at the moral
basis.
There are many different areas where business needs to be responsible for the
development of society and environment. It is mostly assumed that social responsibility of
business is to increase the profits only. But this is not at all correct as the CSR is spread to a large
variety of responsibilities. The profit earning is important for maintaining corporate social
responsibility because companies can work in socially responsible manner only when they have
extra money. This will be only there is the company earns a good amount of money as this
money will be used for managing the environment. Thus, it can be said that increasing profits of
company can be a part of being socially responsible but this is not only responsibility of the
company.
Along with increasing profits there are many different areas where company needs to be
socially responsible for benefit of both company as well as the society and all stakeholders of the

company as well (Cui, Jo and Na, 2018). The competition is very high in the environment and
consumers are also becoming conscious about protection of environment and society. Thus, it is
the responsibility of companies in order to increase their consumers and sales they have to work
in effective manner and take measures in order to protect environment. This will in turn protect
the environment and increase the sales and as a result of this the profits of the company will
increase. Hence, this increase in profit will in turn be used by companies in protecting the
environment and investing in betterment of society (Albuquerque, Koskinen and Zhang, 2019).
The companies many a time donate their profit share to the people who need them or to some
charities.
Another social responsibility of business in maintaining CSR is that they must take into
consideration employees of company as well. This is pertaining to fact that if employees are
mistreated and company is taking measures in protection of environment is of no use. Thus, it is
necessary for companies to use good policies for the benefit of employees and to abide by all
human and labour laws which are applicable to company. For maintaining this responsibility that
is benefits of employees, Red & Blue restaurant provides 24 weeks paid holidays to both mom
and dad at time of child birth. Also, company tries to maintain a good culture and ambience at
workplace so that employees are motivated to work in effective manner.
The other area of maintaining social responsibility for business is to satisfy consumers in
proper and effective manner (Dyck and et.al., 2019). It is very necessary for companies to
provide consumers all products and services of effective quality as if consumers are not sappy
then they will not like products of company and this will decrease sales of company. Hence, for
this it is very necessary for Red & Blue restaurant to provide a good quality food to its
consumers in order to satisfy their needs and make them happy. This will be a tough job for
restaurant as consumers comes from different cultural background and have different
requirements. Thus, for managing the consumers in responsible manner it is the moral duty of
restaurant to provide food products in accordance to their needs only.

Figure: Benefits of CSR
Model of social responsibility
Thus, for effective working of the Red & Blue restaurant theory of TBL that is Triple
Bottom Line can be implemented. This theory must be applied by restaurant as this theory states
that company needs to maintain three basic line for managing its CSR issues (Leipziger, 2017).
These three different aspects are social, environmental and economic. All these three aspects of
model cover almost all areas for which restaurant is socially responsible. This model analyses
performance of the restaurant on basis of three criterion that is environment, social and finance.
If restaurant is good in managing all these three aspects then it can be said that the company is
able to manage its CSR practices in effective and efficient manner (Liang and Renneboog, 2017).
This model also includes profit as a criterion because money is also necessary for
survival of the business. But this does not mean that restaurant need to focus only on profit but
also on other two areas that is people and planet. In accordance to this model all these three areas
are crucial for success of Red & Blue restaurant. The major reason underlying this fact is that
these three areas are more crucial for the success of company. This model states that if restaurant
focus only on the profits by ignoring other two areas then it cannot assume to be successful in its
operations. It is so because other two areas that is people and environment are more important

than earning profits. This is pertaining to the fact that if society will not like the product and
services of restaurant then they will not consume it and hence profits of restaurant will fall down.
In the similar way if restaurant does not take care of environment then also consumers
will not like this fact and will not consumer products and services of Red & Blue restaurant.
Moreover, for the successful working of Red & Blue restaurant it is very crucial to take all three
aspects of this model into consideration. Hence, for society and environment it is necessary for
restaurant to manage the waste of food in proper manner. For effective use of the food which is
left by many consumers can be used to give to poor people or people who have no access to good
quality food (Schrempf-Stirling, Palazzo and Phillips, 2016). Thus, it is very important for
restaurant to maintain effective balance between the environment and sustainability. Also,
resources are very limited and scarce and competition and user of these resources are high. Thus,
it is responsibility of restaurant to use the limited resources in effective and optimal manner.
In case of people or society it is very necessary for Red & Blue restaurant to have
effective measures in order to satisfy the needs of the people associated with restaurant that is
consumers and employees of restaurant. These are major people which will be affected by the
working of restaurant as they are more interested in profitability of company. For managing
consumers Red & Blue restaurant’s responsibility of Red & Blue restaurant is to provide food
products of effective quality and also, they must outline all the ingredients of food. The outlining
of ingredients is necessary as this will build a trust among the consumers as they will know what
are added to the food and whether it is of good quality or not (Wang and et.al., 2016).
For managing the profits of Red & Blue restaurant it is very necessary to work in ethical
manner and earn the profits in actual way. This is majorly pertaining to the fact that if company
is using wrong measures of earning money then it is not an ethical and correct way of working.
Hence, for managing this responsibility it is very necessary for Red & Blue restaurant to
maintain proper accounts and not to misuse any of the accounting principles (Crane, Matten and
Spence, 2019). Also, they must get their accounts audited from time to time. In addition to this
company must also not charge a very high profit margin such that they just focus on profit
earning and ignores the quality. This will impact two factors of Triple Bottom line model that is
profit as it will be earned by using wrong measure. Another is people and it will be affected
because the consumers will have to pay high prices for products which are not of good quality.

Figure: Triple Bottom Line
Source: (Triple Bottom Line. 2020)
Skill audit
Ethics is defined as the moral values which need to be considered at time of doing the work. this
includes what is right and what is wrong on the basis of moral. The business ethics is defined as
the practice of business of doing the work which is ethically correct and does not include any
fraudulent practices. It is necessary for the companies to maintain business ethics because
without this the company cannot run successfully.
For successfully managing the CSR it is very crucial for Red & Blue restaurant to have
effective skills of audit. The audit skills help company in analysing the fact that there are many
frequent and fast changes taking place within environment and it is very dynamic. Thus, it is

very crucial for companies to continuously monitor all changes taking place and changes which
are impacting working of company must be adapted by company. Also, for this most crucial
audit skill is of market research as needs and preferences of consumers changes very frequently
and this affects working of company to a great extent. In addition to this another major audit skill
is of monitoring and evaluating. This is necessary as the changes needs to be evaluated in proper
manner and then it is necessary for monitoring also (Grayson and Hodges, 2017). This
monitoring will help company in knowing that whether the intended change has been
implemented in same manner as was required by company or not.
For instance, Red & Blue restaurant is having god audit skill as they are good at
researching the needs and taste of the consumers and ethically in correct manner adapt to these
changes. This is done so that the consumers are happy and satisfied and this will help restaurant
in earn money in proper and correct manner.
CONCLUSION
From the above study it can be summarised that managing corporate social responsibility
and ethics and sustainability is very necessary for the success of business. The major reason
behind this is that in current competitive world it is very crucial for businesses to manage
environment and direct its working towards protection and safeguarding of environment. This is
helpful for company as it is beneficial in improving the state of environment and this in turn will
increase goodwill and market position of companies. Moreover, managing ethical and
sustainable working is necessary along with caring of environment.

REFERENCES
Books and Journals
Albuquerque, R., Koskinen, Y. and Zhang, C., 2019. Corporate social responsibility and firm
risk: Theory and empirical evidence. Management Science. 65(10). pp.4451-4469.
Baik, B., Farber, D. B. and Lee, S., 2016. CEO ability and corporate social responsibility
activities. Working paper, Seoul National University, Seoul.
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Cui, J., Jo, H. and Na, H., 2018. Does corporate social responsibility affect information
asymmetry?. Journal of Business Ethics. 148(3). pp.549-572.
Dyck, A. and et.al., 2019. Do institutional investors drive corporate social responsibility?
International evidence. Journal of Financial Economics. 131(3). pp.693-714.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make
corporate social responsibility work for your business. Routledge.
Leipziger, D., 2017. The corporate responsibility code book. Routledge.
Liang, H. and Renneboog, L., 2017. On the foundations of corporate social responsibility. The
Journal of Finance. 72(2). pp.853-910.
Schrempf-Stirling, J., Palazzo, G. and Phillips, R. A., 2016. Historic corporate social
responsibility. Academy of Management Review. 41(4). pp.700-719.
Wang, H. and et.al., 2016. Corporate social responsibility: An overview and new research
directions: Thematic issue on corporate social responsibility.
Online
Red & Blue restaurants. 2020. [Online]. Available through: < https://www.b.co.uk/company-
profile/?red-&-blue-restaurants-ltd-106938 >
Triple Bottom Line. 2020. [Online]. Available through:
<https://www.researchgate.net/figure/The-interconnection-of-the-elements-of-the-Triple-
Bottom-Line-concept_fig1_329185478>