Do corporations have a responsibility to society that extends beyond merely maximizing profit?

Social Responsibilities 1

Social Responsibilities of Business Corporations

Do Corporations have Social Responsibilities that Extends much Beyond the Profit Maximizing Concept Social Responsibilities 2

Introduction

In the early 20th century , business firms were predominantly concerned with maximizing their profits . However , in the 1970s , social activists began to question business enterprises ' singular objective of profit maximization . They argued that since businesses derive their existence from society , they have some obligations towards its interest and welfare . The concept of social responsibility mainly became popular after the publication of Howard R

. Bowen 's Social Responsibilities of Businessman in 1953 . Bowen argued that business enterprises should consider the impact of their decisions on society . Many philosophers consider social ethics and responsibilities as science of conduct HYPERLINK "http /www .authenticityconsulting .com " \n Carter McNamara

In the modern era , since the expectations of the society have changed a lot , organizations have become more aware of their social responsibilities . A careful analysis of arguments for and against the involvement of organizations in social welfare is truly necessary to determine whether an organization should implement social initiatives or should they go for only profit-maximizing alternatives

Arguments against Social Responsibilities of Corporations

Opposes the principle of profit maximization

The principal objective of a business is profit maximization . Hence , any social involvements may not be economically fruitful for a business with respect to this motive

Excessive costs

When a business incurs excessive costs for social involvement , it passes the cost on to its customers in the form of higher prices . Society therefore , has to bear the burden of the social involvement of business by paying higher prices for its products and services , which would otherwise , could have been available at lower prices

Social Responsibilities 3

Weakened international balance of payments

A weakened international balance of payments situation may be created by the social involvement of organizations . Since the cost of social initiatives would be added to the price of the products , the multinational companies selling in international markets would be at a disadvantage when competing with domestic companies which may not be involved in social activities

Increase in the firm 's power and influence

Businesses are inherently equipped with a certain amount of power . Their involvement in social activities can lead to an increase in their power and influence . Such influence and power may corrupt them . Specially , in the third world countries , this increment of power may cause the business corporations engage with unnecessary conflicts with its own customers

Lack of necessary skills among business-people

Many business-people do not possess the necessary skills to handle the problems of society . Their expertise and knowledge may not be relevant to deal with social problems

Lack of accountability to society

The business corporations should not get involved in social activities until a proper mechanism to establish the accountability of businesses is developed and implemented

Lack of consensus on social involvement

There has been no agreement regarding the type of socially responsible actions that a business should undertake

Social Responsibilities 4

Arguments for Social...