Why Firms must Pursue Social Responsibility

862 views Published on 7th September 2010

By Dr Isaac Chaneta, University of Zimbabwe – Harare, Zimbabwe

Introduction

Organisations have, for a long time, acknowledged their responsibility towards the community and the environment in which they operate. Responsibility does not end with the production of goods or rendering of high quality service as required by the community, but extends into the social field. Social responsibility is a social norm that holds any social institution, including the smallest family unit and the largest corporation, responsible for the behaviour of its members. An organisation’s responsibility extends far beyond the internal maintenance of its human resources to outside the work environment as well.

The social responsibility of an organisation is becoming even more important today. Organisations are expected to be involved in real social problems of the community to show that they do not want to use the community for personal gain only, but that they want to give something back to the community to ensure better dispensation for both parties (Pincus, 1992). Today, however, organisations pursue multiple goals with emphasis on social awareness, care and commitment. Social responsibility is so important that the sources of an organisation may depend to a large extent on the social commitment.

Arguments for and Against Involvement of Organisations in Social Responsibility

Why does an organisation become involved in social responsibility programmes? Roy Pascoe (1998) says that social responsibility is just as important to an organisation for the achievement of good profitability. He adds that there are several reasons why an organisation should show its social responsibility:

Relationship with employees: A good relationship with employees is established if an organisation supports the education, culture and welfare organisation serving these employees. Supporting the organisation that serves employees ensures improved employee morale because their living standards are raised and this may result in increased productivity. The promotion of these relationships is inherent in human resources management process such as equal employment opportunity programmes, health and safety programmes and the provision of incentives and fringe benefits.

Relationship with the community: Skinner and Von Essen (1995 p 2258) state that an organisation cannot build a relationship with the community on the basis of promises and propaganda. A good relationship with the community is the product of responsibility, policy and conduct on the part of an organisation. Raymond Ackerman (1997) Chairman Pick n’ Pay states that if we help the community, it will respond by helping us.

Relationship with consumers, commerce and shareholders: By making contributions to social causes, an organisation fosters good relationships with consumers, commerce and shareholders. Pincus (1192 p 31) reports as follows: “ Pi ck n’ Pay” which won the Food Marketing Institute International Hall of Fame Award for Social Responsibility in 1984, was founded on consumerism and a strong base of social responsibility.” He says that, after all, consumers, commerce and shareholders are the groups who provide the financial resources that enable organisations to become involved in social responsibility programmes.

Public Image: Companies enhance their public image to get increased sales, better employees, access to financing and other benefits. Because, the public considers social goals important, business can create a favourable public image by pursuing social goals.

Better Environment: A business environment can help solve difficult social problems, create a better quality of life and give rise to a desirable community in which to attract and keep skilled employees.

Possession of Resources: Business firms have the financial resources, technical expertise and managerial talent to support public and charitable projects that need assistance.

Superiority of Prevention over Cures: Social problems must be addressed one at a time. Business should act before these problems become serious and costly to correct, taking managers’ energies away from accomplishing their goals of producing goods and services.

Dilution of purpose: The pursuit of social goals dilutes business’s primary purpose i.e. economic productivity. Society may suffer if both economic and social goals are poorly accomplished.

Costs: Many socially responsible actions do not cover their costs. Someone has to pay those costs. Business must absorb the costs or pass them on to the consumers through higher prices.

Too Much power: Business is one of the most powerful sectors of our society. If it pursues social goals, it will have even more power. Society has given business enough power.

Lack of Accountability: Political representatives pursue social goals and are held accountable for their actions. Such is not the case with business leaders. There are no direct lines of social accountability from the business sector to the public.

Importance of Social Responsibility

Cronje et al (1990 p 389) maintains that the social responsibility of business is increasingly coming to the fore. The public expects an organisation to become closely involved in the real social problems of the community in which it operates. One of the tasks of management is to initiate programmes to bring the corporate sense of social responsibility to the attention of the external public. Management should keep a watchful eye on activities that might be construed by external groups as irresponsible, giving rise to resentment.

Robbins and Coulter (1999 p 146) state that it is a business firm’s obligation (beyond that required by law and economics) to pursue long-term goals that are good for the society.

Social responsibility adds an ethical imperativeness to do the things that make society better instead of those that make it worse. A socially responsible organisation goes beyond what makes economic sense and is obligated by the law and chooses to help improve society because it is ethical to do so. A company that meets pollution control standards established by the government or does not discriminate against employees over the age of forty in promotion decisions is meeting its social obligation. When it provides on site child-care facilities for employees, it is being socially responsible.

Conclusion

Long-term profitability cannot be attained if an organisation does not act in a socially responsible way. Social responsibility is not confined solely to matters affecting the external environment. The internal environment and the well-being of workers and their working conditions are no less important. Cronje et al (1992) are of the opinion that the support of such services by an organisation, fosters good moral and allows for higher standard of living for its staff which can also lead to higher productivity. When it becomes known that an organisation has the welfare of its employees at heart, this creates a spirit of good will and commitment and the, organisation then does not need to scrape the labour market barrel to get and keep good workers.

References

Latham G.P and Locke E .A, “Goal Setting — A motivational Technique that Works,” Organisational Dynamics Vol.8,1979.

Lawler E.E and Hackman J .R, “Corporate Profits and Employee Satisfaction: Must They Be in Conflict?” California Management Review, 14, 1971 pp 46-55

Locke E. “What is Job Satisfaction?” Journal of Organisational Behavior And Human Performance, 4, No.6,1969 pp309-336.

Mabey C, Salaman G and Story J. 1998, Human Resource Management: A Strategic Introduction: Blackwell Publishers Inc.

Mead M, 1978 Culture and Commitment: The New Relationships Between The generations in 1970s: Garden City NY: Anchor Books.

Newton K, Leckie N and Pettman B .0, “Quality of Working Life,” International Journal of Social Economics, Vol 6 No. 41979.

 


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