What are the social responsibilities should be carried out by the firm?

The major arguments for the assumption of social responsibilities by business are:

  • Public expectations: Social expectations of business have increased dramatically since the 1960s. Public opinion in support of business pursuing social as well as economic goals is now well solidified.
  • Long run profits: Socially responsible businesses tend to have more and secure long-run profits. This is the normal result of the better community relations and improved business image that responsible.
  • Ethical obligation: A business firm can and should have a conscience. Business should be socially responsible because responsible actions are right for their own sake.
  • Public image: Firms seek to enhance their public image to gain more customers, better employees, access to money markets, and other benefits. Since the public considers social goals to be important, a business can create a favorable public image by pursuing social goals.
  • Better environment: Involvement by the business can solve difficult social problems, thus creating a better quality of life and a more desirable community in which to attract and hold skilled employees.
  • Discouragement of further government regulation: Government regulation adds economic costs and restricts management’s decision flexibility by becoming socially responsible, the business can expect less government regulation.
  • A balance of responsibility and power: Business has a large amount of power in society. An equally large amount of responsibility is required to balance it. When power is significantly greater than responsibility, the imbalance encourages irresponsible behavior that works against the public good.
  • Stockholder interests: Social responsibility will improve the price of a business’s stock in the long run. The stock market will view the socially responsible company as less risky and open to public attack. Therefore, it will award its stock a higher price-earnings ratio.
  • Possession of resources: Business has the financial resources, technical experts, and managerial talent to provide support to public and charitable projects that need assistance.
  • The superiority of prevention over cures: Social problems must be dealt with at some time. Business should act on them before they become serious and costly to correct and take management’s energy away from accomplishing its goal of producing goods and services.