The responsibility of business towards society is known as social responsibility. So, according to the definition, a business firm has the responsibility to achieve its financial objectives and serve society. No business can exist in isolation as each and every organ of the society contributes towards the successful functioning of a business.

The concept of social responsibility means an ethical framework where individuals or corporations must fulfil their duties by taking actions that benefit society. Social responsibility is a way to achieve sustainability. An organisation can succeed by being viable in the long term by adopting key social responsibility principles like transparency and accountability. The social responsibility factor that a company follows adds a lot of benefits like increasing productivity, roping in the best talents around, and improving the reputation of the organisation to usher in golden opportunities for growth.

According to Howard. D. Bowen, “Social responsibility is to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”

The International Organisation for Standardisation (ISO) has published an international standard called ISO 26000 to assist organisations in assessing and consequently addressing their social responsibilities. According to the ISO 26000-2010:Guidance on Social Responsibility, social responsibility is the responsibility of an organisation based on the impact or effect of its decisions. It acts on society and the environment via transparent and ethical behaviour that contributes towards sustainable advancement and includes the health and welfare of the society. It will also consider the expectations of stakeholders and is compliant with applicable laws and rules, and is also consistent with the norms of international behaviour. The concept of social responsibility is integrated throughout the workings of an organisation and is also practised in the relationships with their employees.

The organisations can achieve sustainability if they are observant and keen to understand their impact on society and the environment. And if they adopt a transparent and ethical behavioural approach, it will be very helpful to protect the success of society and its environment in the long term. One of the principles of social responsibility is a triple bottom line known as ‘people, planet, and profit’. It means that to achieve the aim of profit, the organisation does not have to harm the planet or exploit its people in any way. The various organisations can find a way to profit and keep their planet and people safe and happy.

Core subjects of social responsibility

According to the ISO 26000-2010:Guidance on Social Responsibility, there are seven central subjects of social responsibility, namely:

1. Organisational governance
2. Human rights
3. Labour practises
4. Environment
5. Fair operating practises
6. Consumer issues
7. Community involvement and development

Key principles of social responsibility

Apart from the above-given central subjects, the ISO 26000 also provides seven key principles of socially responsible behaviour, namely:

1. Accountability
2. Transparency
3. Ethical behaviour
4. Respect for stakeholder interests
5. Respect for the rule of law
6. Respect for international norms of behaviour
7. Respect for human rights

Social responsibility in business

The concept of social responsibility of business has another name of corporate social responsibility (CSR). Corporate social responsibility is a new concept of the market reading answers. It checks on the people and organisations to know whether they are behaving and conducting business in an ethical and value-bound manner and with sensitivity for society’s social, cultural, economic, and environmental issues. The concept of corporate social responsibility aids individuals and governments in creating a positive impact on business and society by making wiser decisions. The wise decisions are those that consider the impact of today’s choices on people and society in the future and not just those which focus on profit acquisition.

Results of business can drive an industry, investments, free enterprise, and other traditional economic forces, but the reputation of an organisation and its competitive ability depends on the integration of the concept of social responsibility for decision-making and improvement of performance.

Every company has to operate and exist in an environment with which it interacts, and the company cannot exist in a hollow or without an environment. For example, it collects its inputs of manpower, money, materials, and machines from the environment. And after the conversion of inputs into appropriate outputs, the company sells it to different segments of society that are important parts of the environment. So, it can be seen that a business organisation depends on the society both for procuring input and disposing of the output, which creates an obligation on the part of the business to look out and manage the welfare and betterment of the various sections of society. The business should be concerned towards the long-term welfare of society.

Social responsibility and ethics

A company or person’s behaviour must be governed by ethics which are a set of moral principles. Companies should also incorporate a set of ethics in their daily operations, especially those that will affect the community or environment.

History of social responsibility

Earlier quality costs and responsibilities of every concerned person for maintenance of quality was an issue of debate as against the end-of-the-line inspection system. A movement of social responsibility started on the issue of the role of a corporation in having responsibility towards society. And then, it was seen that people, planet, and profit are mutually interdependent on each other. As the aspect of quality leads to profit, the aspect of responsibility leads to sustainable profit. The new trends move from corporate social responsibility programs to sustainable development and social responsibility.

Advantages of social responsibility

Some of the advantages of the concept of social responsibility for a company are:

• Provision of competitive advantage: The companies which apply social responsibility usually fetch more reliable customers as they give a positive message which can be used in the positioning and marketing of the company’s brand, thus giving them a competitive edge in the market.

• Increased workforce retention: The success of a company is because of the people who make it possible or the workforce. If the company is a consistent provider of a friendly and responsible culture for its employees, it can surely attract and retain a measurable, skilled, and smart talent pool.

• Creates more focus of investors on the business: According to the ideology of top-notch investors, a company’s commitment to sharing the concept of social responsibility puts the company at the right place to taste lasting success. By balancing the profit motive of an organisation with the social wellbeing scenario, endless and lucrative opportunities are generated for the business.

• Setting up an improved and interesting business culture: A company’s workforce will be more motivated, showing better commitment and ability if they can also see the nobler side of the company in the form of social initiatives falling in the right place. If the company gives time to its employees to support their causes, too, it will lead to higher productivity and engagement by the workforce resulting in profits for the organisation.

• Formation of an improved loyal base of customers: Generally, consumers are attracted to companies that provide a good reputation certificate. And customer advocacy goes a long way to bring new customers under one roof. If the customers have rave reviews and positive things about a business, it will prove lucky for the company in many ways.

• Improved reputation of the company: By undertaking social initiatives, a positive impression is created for customers and investors about the company’s financial viability, which can be an attraction zone for old and new investors.

Disadvantages of social responsibility

Though the concept of social responsibility is more of a positive issue mostly, there are some flaws, including:

• Money matters: The concept of social responsibility is a costly affair to quote, which can be best handled by larger organisations who can afford the allocation of a large budget to get the benefits from social responsibility. It is not pleasing for small-scale and closed-budget organisations. The smaller companies may use social media to share initiatives or policies of social responsibility, but for monitoring these channels, they will need more time and resources, which does not strike the right chord with them.

• Profit-making capacity is impacted: A company has a relation of trust with its workforce and shareholders, and the pricey social responsibility requirements can cause a negative impact on it directly.

Conclusion

A business organisation, for its existence, has to depend on society for two reasons, namely procurement of input and disposal of the output. So, then it becomes binding on the business to look out for the welfare and best results of various sections of society. So, every organisation has to have a heart and a mind and balance the profit motive of the company on one side with the fulfilment of the task of the concept of social responsibility too in the best way.