Social Responsibility in business

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Social responsibility is defined as an organizations obligation to maximize its positive impact and minimize its negative impact in the community it operates (Ferrell, 2010, 2008). Socially responsible Organization implements policies which ensures their corporate behavior, positively impacts the communities within which they operate, by contributing to their growth and development. Some organizations do so by philanthropic works such as scholarships, education grants and donations to non-profit organizations within the community. Others do so by providing their employees with a good working environment, great health care benefits and lucrative compensation packages. In doing so by being financially transparent and by displaying environmental consciousness. Milton Friedman in a New York Times Magazine article said that the “basic mission of a business is to provide goods and services at a profit and by doing so said business is making its maximum contribution to society and is therefore being socially responsible” (Friedman, 1970). Friedman’s belief is a core concept of the Shareholder Model of Corporate governance. The fundamental principle of the Shareholder’s model is increasing the wealth of its shareholders and investors. Company Q closed down two stores in higher - crime - rate neighborhood claiming that these store were consistently losing money. Citing ‘worries over lost revenues due to possible fraud and stealing by employees who might say they are donating the food’, Company Q further declined a request from the neighborhood food bank to donate day old goods, choosing to dump them instead. Company Q’s behavior clearly demonstrates that they subscribe to the Shareholders Model of Corporate Governance. To Company Q ul... ... middle of paper ... ...ds to increase in quality and productivity of products and services (find source). “The reputation of a company is its greatest tangible asset with tangible value” Ferrell, 2010, 2008) responsible corporate social behavior positively affects a company’s image and reputation attracting the most highly skilled and qualified employees on the market. Company Q’s from shareholder to stakeholder model of corporate governance changes its corporate social behavior transitioning the company from a poor corporate citizen to a good corporate citizen. Works Cited Ferrell, O. C. (2010). business ethics ethical decision making and cases, 2009 update. (7th ed., p. 40). Mason: South-Western Cengage Learning. DOI. Friedman, M. (1970, September 13). The social responsibility of a business is to increase its profits. New York Times Magazine. DOI.
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