Fundamentals of social responsibility
Managers must ask themselves, however, how far beyond the minimum they should attempt to go.
Virtually all economic systems of the world recognize the vital importance to the societies of businesses making profits. Of the Fortune companies, 90 percent—and almost half of all other firms—have ethical codes. Ethics can be defined as concern for good behavior.
Codes of ethics must be monitored continually to determine whether they are comprehensive and usable guidelines for making ethical business decisions. Established laws are generally considered minimum standards for ethics.
Some companies limit themselves to making an impact on the immediate communities around their factories, offices, etc.
Second, our data enable us to differentiate between CSR engagement and compliance. In its origins, society views business organizations as institutions that will produce and sell the goods and services society needs and desires.
Social responsibility of an entrepreneur
Therefore, we expect that these historically established laws and institutions, which define rules and rights for stakeholders are the more fundamental sources of CSR. In the same manner, making profits is necessary for a company but it would be very limiting to say that that is the sole purpose of a business! Proposition 2: Business shall operate as an open system, with open receipt of inputs from society and open disclosure of its operation to the public. This difficult and complicated question entails assessing the positive and negative outcomes of performing socially responsible activities. Managers should view codes of ethics as tools that must be evaluated and refined in order to more effectively encourage ethical practices. The utilitarian principle: Act in ways that result in the greatest good for the greatest number. Similarly, most of the research funded by governments is mission-oriented, such as protecting the environment, developing new drugs, or designing more lethal weapons. According to the concept of corporate social responsibility, a manager must strive to achieve both organizational and societal goals. In addition to what is required by laws and regulations, society expects businesses to operate and conduct their affairs in an ethical fashion. As mentioned in the article listed in Annexure 1, apart from financial resources, companies bring some unique competencies to making a positive impact on the society through CSR. These strengths include - accountability, responsibility, the concepts of efficiency and effectiveness, results-orientation, project management skills, etc. The four-way test: Ask whether you can answer "yes" to the following questions as they relate to the decision: Is the decision truthful? First, the Davis model for social responsibility, developed by Keith Davis, suggests that there are five key concepts or propositions that drive business socially responsible behavior. If and when such a regulatory framework does become a reality, CSR would be become a compliance activity.
In terms of managing the CSR activities, many companies create a team within their own organizations; others go for partnerships with credible and sincere NGOs.
based on 38 review