Social Responsibility in

Businesses
 Social Responsibility
-Is the idea that businesses should balance
profit-making activities that benefits society.
It involves developing businesses with a
positive relationship to the society in which
they operate.
-The International Organization for
Standardization (ISO) emphasize that
a business’s relationship to its society
and environment is a critical factor in
operationg efficiently and effectively
This is also known as
Corporate Social responsibility (CSR)
- some of the investors use a company’s
social responsibility, or lack thereof, as
investment criteria.
- social responsibility helps companies
develop good reputations
 Concerns of social
responsibility
Not everyone believes that businesses should
have a social conscience. Economist Milton
Friedman stated that “ social responsibilities of
business are notable for their analytical looseness
and lack of rigor”. Friedman believed only individuals
cab have sense of social responsibility . Business by
their very nature, cannot. Some experts believe that
social responsibility defies the very point of being in
business: profit above all else
Models of Social Responsibility
 Traditional Conflict Model
In the traditional conflict model for
corporate social responsibility, social values
and benefits are seen as in conflict with
shareholder profits. Under this model,
corporations opting to practice forms of
social responsibility are likely to see added
cost for doing so.
• Proponents of this conceptual model
generally argue that the nature of business
is one of trade-offs between economic and
moral values, and corporate managers will
inevitably be forced to decide between their
social and fiduciary responsibilities or their
commitment to shareholder equity value
Added Value Model
• This second model for conceptualizing
corporate social responsibility is to see social and
environmental commitments as a means to
increase profit. While proponents of this mode;
tend to acknowledge that conflicts persist in
business decisions, they also believe that CSR
investments are also capable of generating new
revenues. This models tends to focus on issues
like the value of CSR in attracting socially
conscious employees and managing the risks of
negative press.
 Multiple Goals Model
The third model for corporate social
responsibility posits a role for social values in
corporate decisions that are untethered to
economic values. Under this model
corporations have goals beyond shareholder
value, including the enhancement of their
community without respect to monetary gain.
 According to Redman, this model
emphasize quality of life of as the
basis of economic activity.
Economic model
 The economic model nonetheless
argues that social responsibility is the job of
others—particularly the government, non-
profit organisations, and other social
institutions. It would be unfair for
shareholders to have their invested money
channelled to expenditures that would not
yield returns. .
Furthermore, this model also argues that
businesses are already paying taxes and
the government used these payments to
meet the needs of the society. Successful
businesses are indirectly fulfilling their
social responsibility through taxation.
Socioeconomic Model
 Companies are now preferring the
socioeconomic model of corporate social
responsibility for varied reasons. For
public corporations for example, there is
a strong requirement to become social
responsible to promote and maintain an
ideal public image. Funding from these
corporations after all comes from the
public
 Another reason is that it would be in
the best interest of businesses to be
socially responsible because of the
current business and legal landscapes.
Doing so would help them avert
problems arising from legal actions that
might come from their stakeholders.
Examples of companies
practices social responsibility
in conduct of thier business
 GO NATURAL, THROUGH AND THROUGH:
BURT'S BEES
The focus for Burt's Bees has always been on
well being and "the greater good." As part of the
Natural Products Association, the company
helped develop The Natural Standard for
Personal Care Products, which created
guidelines for what can be deemed natural.
Burt's Bees follows the highest possible
standards for packaging sustainability,
furthering its dedication to the cause as a
member of the Sustainable Packaging Coalition.
Since the brand's start at a crafts fair selling
$200 worth of honey, the company has since
expanded to candles, lip balm and now more
than 150 products. In 2009, revenue topped $250
million.
USING ITS ECOMAGINATION: GE
To stay true to GE's mission,
Ecomagination offerings include products that
significantly and measurably improve
customers' operating performance or value
proposition and environmental performance.
Ecomagination helped GE build its business by
increasing awareness of how the company is
using renewable energy and reducing carbon
emissions.
As proof of the effectiveness of GE's
program, the Ecomagination portfolio has
grown from 17 products to more than 80
today, with revenues reaching $17 billion
in 2008, an increase of 21% over 2007.
THE NEW MEANING OF CLEAN: METHOD
As a cleaning product, Method hit the jackpot.
While cleaning products historically contained
hazardous chemicals, Method was able to
make safe and effective home and personal
cleaning products derived from natural
ingredients such as soy, coconut and palm
oils.
The products also come in environmentally
responsible, biodegradable packaging. As
one of the fastest-growing companies in the
world, and with $100 million in annual
revenue, Method proves that socially
responsible products can be wildly
successful.
BEAUTY COMES FROM WITHIN: THE BODY SHOP
The Body Shop is regarded as a pioneer of
modern corporate social responsibility as one of
the first companies to publish a full report on its
efforts and initiatives. Founder Anita Roddick led
her company to stand up for its beliefs and
champion causes such as self-esteem,
environmental protection, animal rights,
community trade and human rights.
From sponsoring posters in 1985 for
Greenpeace to presenting a petition against
animal testing to the European Union with 4,000,
000 signatures, The Body Shop has contributed
significantly to the causes it supports, and
exemplifies how other companies can do the
same.
BREWED RESPONSIBLY: STARBUCKS
COFFEE
Since Starbucks Coffee started in 1971, the
company has focused on acting responsibly
and ethically. One of Starbucks' main focuses
is the sustainable production of green coffee.
With this in mind, it created C.A.F.E. Practices,
a set of guidelines to achieve product quality,
economic accountability, social responsibility
and environmental leadership.
The company supports products such as
Ethos Water, which brings clean water to
the more than 1 billion people who do not
have access. To date, Ethos Water has
committed to grants totaling more than
$6.2 million.
LENDING A HAND TO MAN'S BEST FRIEND:
PEDIGREE
Pedigree dog food built its brand by focusing on
the need for people to adopt homeless dogs.
Funding the support and care of these animals
and sponsoring a national adoption drive,
Pedigree's 2009 goal was to distribute $1.5 million
in grants to 1,000 shelters and breed rescues.
Pedigree donates one bowl of food to animal
shelters every time it gets a Facebook fan, and it
did the same when the company's 2009 Super
Bowl commercial was viewed online. Pedigree's
goal is to donate 4 million bowls of dog food,
enough to feed every shelter dog in America for
one day.