[Solution] Social Responsibility and Organizations
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Author: Sarah Bennett
Society expects organizations to act responsibly, meaning they should avoid doing harm to others. Social responsibility refers to the set of obligations an organization has to protect and enhance the society in which it functions.
Areas of Social Responsibility
Organizations are primarily responsible to three areas of society: organizational stakeholders, the natural environment, and general social welfare.
Social responsibility toward organizational stakeholders means dealing with them fairly and honestly while following all regulations that may govern the stakeholder relationship (for example, issuing truthful financial disclosures to the organization's investors). The stakeholders of an organization vary depending on what it does, whom it serves, and whom it answers to.
Organizational Stakeholders
Examples include: Employees, Customers, Suppliers, Shareholders, Communities, Government
In recent years, responsibility for the natural environment has taken on greater urgency for organizations, due to heightened public awareness of environmental issues. Some prominent environmental issues include:
- Climate change
- Oil spills
- Fracking
Many organizations burnish their social responsibility credentials by promoting the general social welfare. For example, they might contribute to the arts, educational institutions, and community groups. Some believe organizations should act more broadly to correct political injustices in the world; thus, managers may deliberately avoid doing business in countries with oppressive regimes.
Arguments For and Against Social Responsibility
There are various perspectives on whether businesses should engage in socially responsible activities beyond their primary economic function.
Organizational Approaches to Social Responsibility
Organizations can take different stances toward social responsibility, ranging from obstructionist to proactive.
Select the word or words that best complete the sentence.
An organization's obligation to protect and enhance the society in which it functions is referred to as .
View Explanation
An organization's obligation to protect and enhance the society in which it functions is referred to as its social responsibility.
Select the correct response to the following question.
Which of the following is an area of social responsibility for organizations?
- General social welfare
- Social contract
- Compliance
View Explanation
A socially responsible organization may contribute to charity, support the arts, promote public health and education, or avoid business dealings with oppressive governments. These activities are all ways of demonstrating care for the general social welfare.
Select the correct response(s) to the following question.
Which of the following are arguments in favor of businesses practicing social responsibility? Check all that apply.
- Businesses often have the money and other resources to solve major problems.
- Businesses create problems and should therefore solve them.
- Businesses are powerful enough to force governments to solve problems.
- Businesses are less corrupt than governments and can solve problems more equitably.
View Explanation
One argument in favor of practicing social responsibility is that businesses create problems and should therefore solve them. Another argument is that many businesses have the money and other resources needed to solve problems. Still another argument is that businesses are citizens of or partners in the society in which they operate.
The power of businesses or their relative level of corruption are not invoked as reasons they should exercise social responsibility.
Match each example with the stance toward social responsibility it represents.
Doing business in a way that puts customer safety at risk
Taking the initiative to start a nonprofit to meet a community need
Making products that comply with safety regulations but do not use the latest safety technology
Helping a youth center after the center requests assistance
View Explanation
An organization with an obstructionist stance toward social responsibility is unwilling to consider the social consequences of its actions or take responsibility for unethical behavior. Putting customers at risk is one example of obstructionism.
An organization with a defensive stance toward social responsibility is willing to obey laws so as to avoid ethical scandals or legal trouble, but does nothing beyond that. An example of this is making products that are as safe as the law requires but no safer.
An organization with an accommodative stance to social responsibility is willing to engage in programs that promote social and environmental welfare or the interests of stakeholders, but only if others reach out to the organization or convince its leaders that the programs are worthy causes. This business has an accommodative stance because it helped the youth center after the center asked for assistance.
A proactive stance toward social responsibility is a willingness to take the initiative in joining or founding programs that promote social and environmental welfare or the interests of stakeholders. Starting a nonprofit on its own initiative is an example of an organization's taking a proactive stance toward social responsibility.
