What is Social Responsibility?
Social responsibility refers to a commitment to act ethically and to positively contribute to the local community and to society at large. Social responsibility can be practised by individuals but also by businesses – via the individuals, systems and policies that form a business.
Social Responsibility in Business
Businesses have traditionally been viewed as being entities that were created and sustained ONLY for the increase and maximization of profit. However, this traditional notion of business has been re-examined by business philosophers, top level managers and business entrepreneurs in recent years, as some businesses with an all-too-narrow view of profit-seeking only have created problems of unethical practises, environmental damage and even human exploitation. Thus, consumers and many members of the public have demanded the need for businesses to be socially responsible, and many businesses and start ups are responding by taking on socially responsible business models.
For businesses, social responsibility can be exercised in 2 core ways:
1. Corporate Social Responsibility
A key way that businesses today are becoming more socially responsible is through CSR or Corporate Social Responsibility initiatives. In this case, the business will typically have economics and profit as its key driver, however, CSR will play a role in the business operations as the standard in which business is conducted.
Corporate social responsibility refers to the commitment by businesses to behave ethically and to contribute to economic development, particularly through the improved quality of life for workers and their families and other initiatives and policies that contribute to the local, and even global, community overall.
2. Social Entrepreneurship
While CSR practises social responsibility in businesses that are primarily geared towards profits, social entrepreneurship takes it further and suggests that for-profit aims can actually coincide as just one of the main drivers along with positive social and environmental aims too.
A number of business start ups today have more than just a single bottom line of profit. Rather, they have a double bottom line or triple bottom line, as these businesses seek to achieve profit goals with goals to positively impact the community and/or the ecology. Social entrepreneurship business models have a mission and vision that is based on positively contributing to society, while ensuring financial sustanability and profitable growth.
Social Responsibility in Business as a New & Growing Field
It must be noted that social responsibility in business via CSR and social entrepreneurship is still a new and growing field of both theory and practise. Different businesses apply social responsiblity initiatives in varying degrees as it will highly depend on the entrepreneurs, top level managers, and the interests of stakeholders and consumers.
In most cases, the social responsibility of a business will be self-regulated. This can be beneficial on the one hand, because different businesses will have varying amounts of resources (depending on the econonomic conditions and financial position of the business) to implement differing degrees of social repsonsbility initiatives and policies. Thus, self regulation allows the business entrepreneurs, managers and investors to allocate resources effectively according to their needs and conditions facing the business at a given point in time.
Nonetheless, self-regulation can be problematic as businesses may totally forego business ethics and social reponsibilities altogether, or they may misrepresent their operations as being socially responsible when in fact they are not.
Balancing Profits & the Deeper Purpose of Business
Evidently, the concept and application of social responsibility in business can be a tricky endeavour. Businesses will therefore have to strike a balance with the need to increase profits alongside the need to achieve their deeper purpose, which is often to help improve the quality of life for their stakeholders and for society as whole.