Social Responsibility of

Business By, Praveena Richu Jacob Marthoma College of Management and

Technology, Perumbavoor.

Social ResponsibilitySocial Responsibility is one of the social issues

in International Business.It refers to obligation of an organization's

management towards the welfare and interests of the society in which it operates.

The word ‘responsibility’ means that the business has some moral obligations to the society.

The profit is not the primary purpose.

The companies social performance can be judged by social responsiveness shown to the needs of the community.

The primary objective is to strengthen itself with due regard to the interests of the shareholders, employees, and consumers.

Business should pay attention to the long term welfare of society.

Social Orientations of Business

Social Orientation is a business philosophy that takes the society’s well- being into account, in addition to the satisfaction of the consumer’s wants.

The extent of social involvement of a company may change over time and can be described by some models such as:

a) Carroll’s Model b) Halal’s Model

c) Ackerman’s Model

Carroll’s ModelArchie B. Carroll proposed a model having 4

categories of obligations of corporate performance.

-Economic-Legal-Ethical-Discretionary

Economic entity: The firm should have efficient operations to satisfy economic needs of the society

Legal responsibilities: A company is bound to obey the law of the land.

Ethical responsibilities: Norms which the society expects the business to observe though they are not mandated by law.

Discretionary responsibilities: voluntary contribution of the business to the social cause.

Halal’s ModelWilliam E. Halal’s proposes ‘return on

resources model of corporate performance’.

No corporate social posture will be value- free.

Beyond a certain level of economic activity, the social issues at stake may become conflicting.

Ackerman’s ModelIt has 3 Phases in the development of social

responsiveness:a) Top management recognizes the existence of a social problem.b) Company appoints staff specialists to study

the problem and suggest ways.c) Implementation of social responsibility programmes.

Extent of Social Orientation and Involvement

On the basis of extent of social orientation and involvement of companies, they are classified as:a) Anti- social: No social orientation but they are unfair in the conduct of the business.b) Indifferent: No social orientation beyond discharging legal as well as economic responsibilities.c) Peripheral: social orientation for name sake

d) Socially oriented: high level of social orientation but real involvement is constrained by limited resources

e) Committed and very active: high level of commitment and real involvement in the social welfare programmes.

Thank you…