Social Responsibility in Business
...hat is socially acceptable in practice (www.pwc.com). Pressure is often applied to businesses by interest groups, governments, employees and consumers to demonstrate higher standards of accountability and communication. Even cigarette companies are attempting to run advertisements informing potential customers of the dangers of smoking. In fact, Philip Morris offers links to help keep kids from smoking and to assist smokers in quitting. Their mission statement is “to be the most responsible, effective and respected developer, manufacturer and marketer of consumer products, especially products intended for adults. Our core business is manufacturing and marketing the best quality tobacco products to adults who use them.” (Philip Morris USA homepage) CSR is a commitment from a business to exceed federal and legal standards and to go above and beyond law to establish voluntary codes of conduct and self-regulation. Businesses often try to hide their profit margins and markups on their products. When using CSR, businesses should be more transparent with their financial and corporate information when communicating to the stakeholders. There are three major benefits to running a business with a CSR approach. First of all, a firm that is socially responsible builds trust with its employees and stakeholders. Many widely respected magazines and publications, such as Fortune, conduct surveys that evaluate the reputations of companies based on various facets such as social responsibility. Other publications list companies that are great to work for and businesses that really help out in the community. Studies have shown that there is a connection between a firm’s reputation and its share price. The second reason to be socially responsible is because firms do not want to attract bad publicity or to appear irresponsible. Oil companies, for example, fear oil spills not just because they are losing money, but also because it damages their reputation which results in more loss of money. The third reason an entity might be socially responsible is due to upper management or influential figures within the company. For instance, Ben Cohen and Jerry Greenfield created Ben and Jerry’s Ice Cream. Ben and Jerry’s Ice Cream has adopted social responsibility as an integral part of the organization’s values. The Ben and Jerry’s homepage offers links to many social and environmental reports and concerns. (Ben and Jerry’s homepage) Managers might be concerned if they are socially responsible, whether or not their customers will be willing to pay more for products or will investors pay more for stock. There are incurred costs to being socially responsible, such as spending money on philanthropic activities within the community. The benefits of social responsibility might be hard to see at first, but over time, loyalty and commitment are created within the organization, among employees, with customers, and within the local community. CSR is especially important as technological advancement is rapidly affecting business practices. Many consumers spend money on the Internet as an alternative to leaving the home and shopping elsewhere. I would be hesitant to purchase items online that require credit card and personal information if the company did not have a good reputation within the community. I believe that if a firm is committed to society and their employees, the employees will return that commitment to the firm and society will embrace the business. To compete successfully, companies must do more than just produce the facts and financial statements at the end of the period. The consumers, employees, shareholders and even the general public demand quality products, superior services, sound ethical stan...