Over the years, Business Corporation have held the core goal of financial responsibility of making profits and raising the value of shareholders. Recently the idea of social responsibility have been introduced. In this responsibility, business organizations are expected to show concern for its employee’s welfare, environment and community around then. In this context, the corporations are expected to give back to the society along their focus on making profits. In social responsibilities, business organizations are expected to set and uphold working ethics (Drumwright, 1994). Corporations that consider social responsibility have to place their investment on the market, workplace, and the community. Companies are expected to support social responsibility voluntarily, but laws may be applicable in cases of environmental concerns. Social responsibility is guided by three primary principle that is sustainability, accountability, and transparency. For social responsibility to flourish there are supporting factors like governance, globalization, ethical culture, and sustainable development. Since social responsibility have introduced into a corporation, there are challenges like some people thinking that business organization are solely meant to make profits to the owners and stakeholders. Principles of social responsibility act as a vision when a firm is implementing the requirements for a corporation to be considered responsible socially.
Sustainability is a responsible corporate aspect of an organization. With sustainability, the current corporate actions are assessed to analyze future expectation or outcomes. For instance, the trend of exploiting raw materials is observed so that in a future scarcity problem may not be experienced (Drumwright, 1994). For example, oil wells must be managed and in the case in future they are depleted there must be an alternative to fill in their gap. For the principle of sustainability as an aspect of corporate responsibility to be upheld, a resource especially natural resources should be used at a rate that allows regeneration. Regeneration will sustain the existence and continued the enjoyment of services from the resource. For a fabric company to continue manufacturing, it must ensure once cotton or sisal whatever the material they are using, is replanted. Replanting does not only ensure that their production coast will go down and continue enjoying the profits but also will guarantee the continuation of the business. In this context, the corporation takes the role of preserving the ecosystem in the society. The rate of consumption and regeneration of the resources are the measured to ascertain whether the actions are sustainable (Drumwright, 1994). In a situation where the resource used cannot be replaced like oil wells, a plan should cover a future where the support would not be available. The awareness on future unavailability should cover local communities’ needs and how to meet them after the supply is depleted. This will make the corporation accountable for the actions.
Accountability is another principle that guides the performance of corporate social responsibility. The corporate is expected to take responsibility on the adverse impacts to the external environment resulting from corporates activities. The corporate business is expected to quantify their impacts to the environment and to give a report for mitigation purposes. For instance, corporations mining nuclear energy, are supposed to notify the surrounding society of its impact. Accountability means the business corporate is answerable to the surrounding community and its stakeholders and not only the business owners (Campbell, 2007). The accountability aspect gives a window through which the society and other stakeholders airs their views concerning the corporates activities. Accountability requires the corporate to be responsible for the handling of the environment and reporting any lingering hazard. Once the report is presented to the surrounding and stakeholders, their recommendations would reflect their interests and values. In their reporting transparency is required to ensure genuine risks are appraised and mitigated.
Transparency is a social responsibility principle that requires organizations to provide real and authentic reports concerning their operations. Masked reports will misguide the surrounding community and stakeholders when giving solutions and recommendations in cases of environmental and human risk. For instance, a nuclear plant in a particular location may choose to disguise their report with less harmful effects on the corporations’ activity (Campbell, 2007). The masking with result into passing of inadequate mitigation programs. The community will latter suffer from unknown kinds of mutation which will tremendously affect their health. Transparency requires the corporate to be sincere in their reporting even when the report may lead to legal action. Social responsibility places the ecosystem and its elements first and the previous selfish perspective on profit is shunned. Transparency just like the previous two principles bestows the power to stakeholders and members of the society in determining the course of action (Campbell, 2007). Transparency benefits the external parties on assessment of the corporates activities and the privileges it brings to the community. Social responsibility is an institution that benefits the community, but it faces a lot of challenges from various background. Some business owner finds it unfair that they have to consider the society in their operations.
Business believe that the community is not part of the corporation, and so it should not be answerable only to stakeholders. They challenge the premises of social responsibility especially I places where the government does not oversee business activities. Such corporation pays a small wage and does not comply with legal institutions (Gray, Owen, & Adams, 1996). Some business owners argue that corporates are set up to make profits on behalf of stakeholders. Performing anything that contravenes the purpose of profit making is considered straying from the fundamental reason for establishing businesses. Many business have a constitution but does not have the provisions of social responsibility. Once such principal pillars of the company are missing the vision is set to exploit the community and its employees. Those corporation that boast over their success in advocating for social responsibility in their area is at risk of losing customers. Such companies are considered to be using the obligation as a marketing strategy for their products(Gray, Owen, & Adams, 1996). Some corporate may go loses in the process of giving back to the society. Those losses may discourage other corporation from investing generously in the community. In such situations the company my shift into providing essential benefits expected by the society of neglecting their duty.
In conclusion, the corporates in their efforts to fulfill their duty to promote social responsibility, the community should provide a conducive environment. Some communities vandalize the infrastructures of a corporation that contributes to incur losses. Corporates that are responsible does not exploit customers by overcharging their products to cover for social responsibilities costs. Setting up a guideline for the implementation of social responsibility activities is important to avoid any confusing with companies goal and purpose. The government established legal standards can be assumed to be minimum goals of corporate social responsibility. The above challenges can be avoided by taking a corporate initiative of promoting wellness of the community and its member. Corporates can avoid losses when investing in a community by allocating in its budget.
Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of management Review, 32(3), 946-967.
Drumwright, M. E. (1994). Socially responsible organizational buying: environmental concern as a noneconomic buying criterion. The Journal of Marketing, 1-19.
Gray, R., Owen, D., & Adams, C. (1996). Accounting & accountability: changes and challenges in corporate social and environmental reporting. Prentice Hall.