SOCIAL RESPONSIBILITY

OF BUSINESS
LECTURE – 4
 Social responsibility : Concept
• Social responsibility is the set of
obligations of an organization to
seek actions that protect and
improve the warfare of society
along with its own interests.-
Kathryn M. Bartol and David C.
Martin (2005).
 Social responsibility : Concept
• Corporate social responsibility (CSR)
is the actions taken by businesses
that further some social good
beyond the interests of the firm and
that which is required by law.-
McWilliam et al (2006)
 Social responsibility : Concept
• CSR is a continuing commitment by
business to behave ethically and
contribute to economic development
while improving the quality of life of
the workforce and their families as
well as of the local community and
society at large. – Redington ( 2005 ).
 Elements of CSR

• 1. Social obligation – business shall engage in

legal pursuit of profit and should refrain from
illegal behaviour.
• 2. Social responsiveness – business shall take
preventive actions to preserve social good and
promote social welfare.
• 3. Social reaction – business shall behave in
reaction to currently prevailing social norms,
values, and performance expectations.
 Debate
• Business has social responsibility .
• Business does not have any social
responsibility other than providing
goods and services to the society.
 Arguments for Social Responsibility of
Business
• Changed public expectations to
business.
• Better environment for business.
• Public image
• Avoidance of government regulations.
• Socio-cultural norms
• Balance of responsibility with power.
 Arguments for Social Responsibility of
Business
• Interdependence of business and society.
• Stockholders interests
• Let business try
• Business has the resources
• Problems can become profit source
• Prevention is better than cure
• Iron law of responsibility
Arguments against Social Responsibility of
Business
• Invisible hand theory
• Business may suffer for social
involvement.
• Social cost will increase.
• Inept custodian of social responsibility
• Dilution of business purposes
• Business has enough power
Arguments against Social Responsibility of
Business
• Lack of accountability
• Lack of board support
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QUESTION?
THANK YOU ALL.