The Importance Of Social Responsibility In Business

Introduction: One may argue as to what the primary goal of a business is. Should their focus be short-term and quantitative or long-term and qualitative? In Milton Friedman’s view, “the social responsibility of business is to increase its profits” (Friedman, 1970) as otherwise, that would mean spending the shareholders’ money for social interest. On the contrary, there is not a conflict between the interest of shareholders and that of society, customers, employees and the environment. In today’s world, business corporations are no longer just a profit earning entity; they are expected to conduct their operations not only legally, but also ethically. Alex Edmans put it best when he said, “Businesses exist to serve a purpose, and by doing so,

What one fails to consider is that majority of the world’s population works for small and medium-sized enterprises (SMEs). For instance, more than 70% of the people in USA work for non-corporates. As humans are the core of every organization, CSR can instead be understood to be a summation of Human Social Responsibility (Hutchisson, 2016). Businesses must work transparently and honestly- involving customers at every stage. Millennials, who are both future employees and customers, seem to recognize and respond to this in a way never seen before. According to a 2015 Cone Communications Millennial CSR Study, “more than 9-in-10 millennials would switch brands to one associated with a cause” (Cone Communications, 2015).

In today’s world, the expectations of citizens and the government as well as an individual’s power to scrutinize have gone up. In such an environment, separating CSR from everyday business has contributed to its failure. It is only through a clear definition of their contribution to society, radical engagement of their stakeholders and application of world-class management can corporates succeed in external engagement (Browne & Nuttall, 2013). Corporates must create shared value by aligning their social and business objectives to make CSR activities central to their overall