Social responsibility has many different definitions. There is evidence of the different perceptions of what this should mean from a number of different societies across the world. Originally in the United States, social responsibility had been defined much more in terms of a philanthropic model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving. The European model is much more focused on operating the core business in a more socially responsible way, complemented by investment in communities for solid business case reasons. (Mallen Baker, 2003, Corporate Social Responsibility вЂ“ What Does it Mean?, www.mallenbaker.net)
Figure1, (A Caroll, 1991, The Pyramid of Corporate Social Responsibility, Business Horizons, www.oldredlion.org.uk)
Managers have an ethical and philanthropic responsibility to act beyond their economic and legal responsibilities. Ethical responsibilities include behaviors and activities that are expected of an organization from societyвЂ™s members. Philanthropic responsibilities are those that an organization isnвЂ™t expected to perform but these do benefit members of society.
Figure2, (Mallen Baker, 2003, Corporate Social Responsibility – What does it mean?, www.mallenbaker.net)
2. Whistle Blowing
This occurs when an employee illegal or unethical conduct on the part of others within the organization. An organizationвЂ™s response to whistle blowing is usually indicative of its stance on social responsibility. (Paul Davidson, Ricky W Griffin, 2003, Management- An Australian Perspective, 2nd Ed.).
2. Ethical Compliance
This is the extent to which an organization follows the basic ethical and legal standards of behavior.
3. Philanthropic Giving
This is basically giving of funds and donations to charities and other social programs.
2. Rights View of Ethics
This view states that ethical decisions are concerned with protecting and respecting the basic individual rights. E.g.: freedom of speech, privacy rights.
3. Theory of Justice View of Ethics
This view states that ethical decisions are made to impose and enforce rules fairly and impartially.
4. Integrated Social Contracts Theory
This view states that ethical decisions should be based on empirical (what is) and normative (what should be) factors.
Analyzing the arguments for and against social responsibility, it is evident that it is important for an organization to be socially responsible. Businesses have found clear benefits from being socially responsible. Organizations which take these issues seriously not only achieve benefits from society but also enhance their reputation, competitiveness, and their risk management (Carl Courtney, 2002, Corporate Social Responsibility- Who cares?, London). There are trends that are making these factors very important in the corporate world. A good reputation is vital to all organizations whether in the brand value of a large multinational or the customer service at a local store. There is evidence that shows a strong track record in social responsibility helps maintain and attract the best resources in the jobs market. There are growing expectations of society that an organization has to live up to. Organizations in todayвЂ™s corporate world have to live up to societyвЂ™s expectations or be left out.
The benefits that are derived from an organization being socially responsible donвЂ™t just happen; they have to be planned, managed and measured at every step of the way. From the study of few socially responsible organizations such as, The Body Shop and Proctor & Gamble (Richard Littlemore, 2001, Companies being socially responsible: WhatвЂ™s the bottom line?, www.bcbusinessmagazine.com), it is clear that the best results occur when the involvement in social responsibility has natural links with the organization. This suggests that different organizations will adopt completely different types on involvement in social responsibility while still generating real benefits. Therefore, it is essential as well as significant for an organization to be socially responsible in today corporate world.
Social responsibility has become a major part in the wealth creation process. When times get hard and push comes to shove, there is always the incentive to practice social responsibility more and better especially if it is a philanthropic exercise which is peripheral to the main business. But as with any process based on collective activities of society there is no вЂњone size fits allвЂќ. In different countries across the world, there will be and are different priorities and values to be taken into consideration that will shape how an organization acts.