Definitions. Social Responsibility of the Enterprise
Social responsibilities are ethical theories concerning every entity, be it a government, organization, or individual enterprise towards the society at large. Social responsibility involves being accountable for the impacts that might be caused by some actions. Every entity has to consider the impacts that some actions might have on society and become accountable for them (Anon. 2010).
All business entities have an ethical duty of being socially responsible. Some social responsibilities may be positive and others negative. Businesses are expected to work towards increasing the positive effects and eliminating negative effects. However, many businesses tend to concentrate on shareholders’ wealth maximization and forget about the welfare of society.
A small local grocery (company Q) located in a major metropolitan area recently closed down a couple of its stores which were located in the regions experiencing high crime rates. The reason for their closure was that they were running at a loss. As a result, all the other stores started offering high-margin items which were health unconscious and had limited organic substance.
The area’s food bank requested company Q to make some donations of a day-old product. The management could not borrow the idea and declined the donations. They reasoned that it could have encouraged fraud and employees could have taken that advantage to steal from the company claiming that they were donating. The management then decided to throw away the food instead of donating it.
One of the weaknesses in company Q was that they were more concerned about the shareholders’ wealth maximization to an extent that, they forgot about society’s wellbeing. The company raised the prices of their products to maintain their sales turnover when some of their stores closed down. Every business has to ensure that society is not exploited at the expense of other people’s mistakes. Instead of raising the prices, the company could have researched better marketing strategies to boost their sales and this could have resulted in higher returns.
Another weakness in company Q was that they offered products of low quality. They did not put into consideration the adverse effects that such products could have on the customers. These products were not conscious of the health of the users. The company failed to understand the need of retaining customers because by offering healthy unconscious products it simply sent the society to look for alternative sources or use substitute products. The company should therefore embark on strategies of retaining and attracting customers and one such strategy is to offer high-quality products.
High-quality products do need strong marketing because they advertise themselves. The company could have embarked on a production of a few products of high quality and sold them at high prices thus maintaining their revenues.
Some members of society do not have the strength to work or some have disabilities. For example, there are orphans, widows, the disabled, and the elderly who have no one to look after them. Society has to help such people. When company Q was asked to give away some donations, they declined due to internal reasons. This does not show ethical behaviors because an internal problem simply shows how disorganized the company was. It shows that the management was not effective because they had failed to deal with their employees.
The company went ahead and threw away the food. This shows that they did not only lack respect to society, but also God. Donations are one of the strategies for marketing, if company Q had realized that, they could not have thrown their foodstuff but could have donated to the needy and in the process make the company known to a larger society.
Every business has to uphold social responsibilities in society. Society is the customer of the business. Businesses should aim at making sure that all the customers are satisfied and that they can retain them. Every business, therefore, has to make sure that it works hard to reduce the negative effects while increasing the positive ones.
Social Responsibility Measures
For every business, some measures have to be taken into consideration for that business to be considered socially responsible. These measures are a social investment, ability to solve problems, quality of products, and financial function (Anon, 2010). When a business is striving to meet its goals it must consider these factors. When the society is well satisfied, then it becomes easy to run the business because more customers will be attracted thus increasing sales and even revenue. Another important point to note is that poor management ruins businesses. For a business to be successful, it has to employ professional and skilled managers who will be responsible for the day-to-day running of the business.
Anon. (2010). Social Responsibility – Doing the Right Thing. Web.