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Social Responsibility

The idea that businesses have an obligation to foster social betterment has been a much-debated topic in the past 50 years. The notion that corporate executives should balance the interests of all stakeholders, the communities in which they operated, and society at large began to blossom in the 1960's. Social responsibility refers to a company’s duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities in which it operates and in society at large. The essence of socially responsible business behavior is that a company should balance strategic actions to benefit shareholders against the duty to be a good corporate citizen. The underlying thesis is that company managers should display a social conscience in operating the business and specifically consider how management decisions and company actions affect the well-being of employees, local communities, the environment, and society at large. A company’s corporate social responsibility strategy is defined by the specific combination of socially beneficial activities it opts to support with its contributions of time, money, and other resources. Companies that take social responsibility seriously can improve their business reputations and operational efficiency while also reducing their risk exposure and encouraging loyalty and innovation.