The growth of businesses’ social role

The social role and context of business, also known as Corporate Social Responsibility
(CSR), emerged during the industrial revolution that took place in two phases between
the years 1750 and 1914. Businesses have steadily been engaging in CSR over the
years to the present point where 25 percent of consumers and 22 percent of investors
cite a “zero tolerance” policy toward companies that embrace questionable practices on
the ethical front” (2021).

During the industrial revolution days, factories understood that maintaining healthy
personnel improves both productivity and revenue. The production line was increasingly
being chastised for contributing to social inequality and women and child exploitation. It
became increasingly clear that corporate firm managers had the responsibility to
safeguard society's interests. In 1894, Milton Snavely Hershey (September 13th, 1857 –
October 13th, 1945), founder and owner of Hershey Chocolate Company, created a park
in his town and ensured that working families had recourse to recreational opportunities.
Workers at Hershey were also given low-interest loans so as to enable them to become
house owners. In 1909, Hershey and his wife Catherine established the Milton Hershey
School for orphans. To date, institution continues to provide tuition-free schooling to
nearly 2,000 impoverished students (Ledecky, 2021). Hershey’s contemporary, John
Henry Patterson (December 13th, 1844 – May 7th, 1922), was the founder of the
National Cash Register Company. He influenced the development of businesses’ social
role by setting up public amenities such as public baths, pharmacies, and restaurants to
thwart labour problems and promote job performance.

Come the 1960s to 1970s and academic material on the social role of businesses
emerged. Keith Davis, a management professor at Arizona State University's College of
Business Administration, published works on this topic. His renowned "Iron Law of
Responsibility" was widely upheld in the 70s and 80s. The term states
that "businessmen's social responsibility should correspond to their social power"
(Sharma, 2021). His premise is that for a business to ignore its societal duty will render
the result of a corresponding progressive loss in its social influence. Consequently,
emerging individual philanthropists who were also corporate leaders such as Cornelius
Vanderbilt and John D. Rockefeller became enthusiastic participants in social care
programs. They contributed money towards the construction of religious
and educational institutions. R.H. Macy Company of New York, better known as Macy's,
donated monies to orphanages and gave away charitable gifts.

Today, businesses’ social responsibility has taken on a wide range of sorts from
donating to charity with every transaction to giving away products and services to
deserving beneficiaries. Social responsibility has also spread to cover a variety of
categories such as the environment (businesses produce a considerable carbon
footprint), philanthropy (giving to charities in terms of money, time or resources), and
ethical labour practices. Regus, a global workplace supplier, polled 40,000 people about
how philanthropy and CSR affect employees directly. The findings showed that, given a
choice between two career prospects, 44 percent of interviewees would prefer to work
for a company that is involved in charity ("Employees prefer companies with CSR work |
Eastvantage", 2021).

In the endeavour to promote job performance and corporate image, the social role of
businesses has grown in the past two centuries. In the wake of the term "businessmen's
social responsibility should correspond to their social power", businesses’ caring
presence is now being felt in every sphere of human society.

References:

1. Aflac.com. (2021). Retrieved 8th November 2021, from

https://www.aflac.com/docs/about-aflac/csr-survey-assets/2019-aflac-csr-
infographic-and-survey.pdf.

2. Employees prefer companies with CSR work | Eastvantage. Eastvantage.com.

(2021). Retrieved 8th November 2021, from
https://www.eastvantage.com/newsroom/employees-prefer-companies-csr-
work.

3. Jee, S. (2021). Social Responsibility of Business. Economics Discussion.

Retrieved 8th November 2021, from
https://www.economicsdiscussion.net/business/social-responsibility/social-
responsibility-of-business/10141.

4. Ledecky, M. (2021). Corporate Social Responsibility: Past, Present, And Future -

EVERFI. EVERFI. Retrieved 8th November 2021, from
https://everfi.com/blog/community-engagement/csr-history/.

5. Mallin, C. (2009). Corporate social responsibility (pp. 20-21). Edward Elgar.

6. Sharma, S. (2021). The Evolution of Corporate Social Responsibility - LexQuest

Foundation. LexQuest Foundation. Retrieved 8 November 2021, from
https://www.lexquest.in/evolution-corporate-social-responsibility/.