Social responsibility

Social responsibility is an ethical or ideological theory that an entity whether it is a government, corporation, organization or individual has a responsibility to society. This responsibility can be "negative," in that it is a responsibility to refrain from acting (resistance stance) or it can be "positive," meaning there is a responsibility to act (proactive stance). While primarily associated with business and governmental practices, activist groups and local communities can also be associated with social responsibility, not only business or governmental entities.

There is a large inequality in the means and roles of different entities to fulfill their claimed responsibility. This would imply the different entities have different responsibilities, in so much as states should ensure the civil rights of their citizens, that corporations should respect and encourage the human rights of their employees and that citizens should abide with written laws. But social responsibility can mean more than these examples. Many NGOs accept that their role and the responsibility of their members as citizens is to help improve society by taking a proactive stance in their societal roles. It can also imply that corporations have an implicit obligation to give back to society (such as is claimed as part of corporate social responsibility and/or stakeholder theory).

Social responsibility is voluntary; it is about going above and beyond what is called for by the law(legal responsibility). It involves an idea that it is better to be proactive toward a problem rather than reactive to a problem. Social responsibility means eliminating corrupt, irresponsible or unethical behavior that might bring harm to the community, its people, or the environment before the behavior happens.

In today’s society a business must maintain ethical principles in order to be successful. (Kaliski, 2001) Businesses can use ethical decision making to strengthen their businesses in three main ways. The first way is to use their ethical decision making to increase productivity. This can be done through programs that employees feel directly enhance their benefits given by the corporation, like better health care or a better pension program. One thing that all companies must keep in mind is that employees are stakeholders in the business. They have a vested interest in what the company does and how it is run. When the company is perceived to feel that their employees are a valuable asset and the employees feel they are being treated and such, productivity increases.

A second way that businesses can use ethical decision making to strengthen their businesses is by making decisions that affect its health as seen to those stakeholders that are outside of the business environment. (Kaliski, 2001) Customers and Suppliers are two examples of such stakeholders. If we were to look at companies like Johnson & Johnson, their strong sense of responsibility to the public is well known. (Hogue, 2001) In particular, take for instance Johnson & Johnson and the Tylenol scare of 1982. When people realized that some bottles of Tylenol contained cyanide they quit buying Tylenol, stocks dropped and Johnson & Johnson lost a lot of money. But they chose to loose even more money and invest in new tamper resistant seals and announce a major recall of their product. There was no “certain amount” for this situation; Johnson & Johnson had to lose money to be socially responsible. But in the long run they gained the trust of their customers. Now when people look at other products, there is a sense of faith and trust in that Johnson & Johnson would not allow a product to harm people just to meet their own bottom line.

A third way that business can use ethical decision making to secure their businesses is by making decisions that allow for government agencies to minimize their involvement with the corporation. (Kaliski, 2001) For instance if a company is proactive and follows the EPA guidelines for admissions on dangerous pollutants and even goes an extra step to get involved in the community and address those concerns that the public might have; they would be less likely to have the EPA investigate them for environmental concerns. “A significant element of current thinking about privacy, however, stresses "self-regulation" rather than market or government mechanisms for protecting personal information” (Swire, 1997)  Most rules and regulations are formed due to public outcry, if there is not outcry there often will be limited regulation.

Human responsibility
One part of social responsibility is being responsible to people, for the actions of people, and for actions that affect people. Social responsibility is about holding a group, organization or company accountable for its effect on the people around it. People within the company, people working with the company, the community the company is in and those who buy from the company.

The idea of being responsible to customers has actually long been imbedded in the ethics of business. The idea of treating a customer with respect and attention is not new particularly in sales and commission based work. What is new is the idea that it's not to profit from the customer, but to genuinely care about what the customer wants and needs.

Accountability for people inside a company is something new. Many times when a scandal or irresponsible behavior comes to light in the corporate world the company and those involved often try to distance themselves as much as possible. Cover ups, buy offs and “golden parachutes” all fall under this behavior. Social responsibility would nearly be the opposite of what goes on in the business world today – a company taking the blame and doing what is needed to fix the problem rather than committing more crimes to cover up the first one.

In many countries, by law, a corporation's only responsibility is to make as much money as possible for shareholders (economic responsibility) and to obey the law (legal responsibility). Social responsibility holds companies and organizations responsible for the people they affect, even indirectly. It also holds a company responsible for inaction, or indecision. Basing on the idea that a company or organization has the power to help people or, at the least, not harm them, it has the moral responsibility to do so. Social Responsibility is a doctrine that says that every being whether it is a village, town, state, corporation, organization, government or individual has responsibility to society.

If we take a look at business ethics as a whole and how those individual decisions within a company are made we can gain a better understanding of how socially responsible ethics works within the context of human responsibility. First most (at least half) of all corporations base their decision making off of the company’s code of ethics. (Kaliski, 2007) This ethical code allows for business managers to have an outline to bring forth their decisions from. The code of ethics is just a starting point within the company, a tool to be used by CEOs to help guide employees when they are faced with ethical dilemmas.

There are always three factors that we can confront in facing an ethical dilemma. (Pride, Hughes, and Kapoor, 2008)   The first factor is the individual factor or what decision we might make ethical when we are left to our own judgment, the next is the social factor or the decision that we might make with social reasoning interjected and the last being the opportunity factor. To place these factors in a better light we can use the following example. Let us pretend for a moment you are standing in front of a 7-11 store. You see a gentleman come out of the store and drop a twenty dollar bill in front of you and keep walking down the street. You look around there is no else there, the gentleman is now half way down the block. No one else except you saw him drop the twenty dollar bill. What do you do? Do you return the twenty dollars to the man who drop it, even though he is far away at this point and might take some effort to catch up with? Do you take the twenty dollars and run in the 7-11 and quickly spend it? Or do you go for the middle of the road option and hand the money to the clerk behind the counter at 7-11, in case the man returns to try and find his missing money? This is the individual factor, what do you do when faced with an ethical decision as an individual.

Now we can take the same scenario and change it slightly. Now instead of standing in front of the 7-11 alone you are now with a group of friends. Say you all are standing out in front of the store having a few beers and now you and your friends see the gentleman drop the twenty dollar bill and keep walking. What do you do? What do your friends do? If your friends take the money and you don’t agree would you say something to them? Would you try and stop them? Would you tell the person who lost the money who has it? At what point do your ethics change given your social surroundings? Would you make the same ethical decisions if instead of a bunch or your friends you were with co-workers? What if it was just you and your spouse? What if you were in the same situation but you were there with your children? This is the social factor. (Pride, Hughes, and Kapoor, 2008)

The opportunity factor comes into play in that if the gentleman never drops the twenty dollar bill, you never have to make an ethical decision. (Pride, Hughes, and Kapoor, 2008)   Our code of ethics comes in under our social factor. Once the opportunity factor has been introduced, then even as an individual in a work place setting we have a code of ethics to guide us as a social factor.

These codes are created however just to be guidelines. After all “There is no way that all situations that involve ethical decision making an organization can be addressed in a code. Codes of ethics must be monitored continually to determine whether they are comprehensive and usable guidelines for making ethical business decisions. “ (Kaliski, 2007)

When it comes to the actual decision process in the human responsibility part of socially responsible ethics there are many other factors that can be used to make ethical decisions. (Kaliski, 2007) For instance there are several areas that a manger could point an employee to outside a code of ethics to assist them with making an ethical decision. Some of them are:

"The Golden Rule: Act in a way you would want others to act toward you.

The utilitarian principle: Act in a way that results in the greatest good for the greatest number.

Kant's categorical imperative: Act in such a way that the action taken under the circumstances could be a universal law, or rule, of behavior.

The professional ethic: Take actions that would be viewed as proper by a disinterested panel of professional peers.

The TV test: Always ask, "Would I feel comfortable explaining to a national TV audience why I took this action?"

The legal test: Ask whether the proposed action or decision is legal. Established laws are generally considered minimum standards for ethics.

The four-way test: Ask whether you can answer "yes" to the following questions as they relate to the decision: Is the decision truthful? Is it fair to all concerned? Will it build goodwill and better friendships? Will it be beneficial to all concerned?"

(Kaliski, 2007)

All of these can help to guide an employee when the code of ethics is lacking or simply when the code does not cover all areas that an employee might run into. These factors come into what is needed to explain human responsibility part of socially responsible ethics.

Criticism of the doctrine of positive responsibility
Many, particularly libertarians, assert there is no "social responsibility" to do anything, but to refrain from doing. They argue that social responsibility only exists to the extent that an individual or business should not initiate physical force, threat of force, or fraud against another. In his famous article The Social Responsibility of Business is to Increase Profits, Nobel economist Milton Friedman(Classical View/theory of Social Responsibility) asserts that businesses have no social responsibility other than to increase profits and refrain from engaging in deception and fraud. He maintains that when businesses seek to maximize profits, they almost always incidentally do what is good for society. Friedman does not argue that business should not help the community but that it may indeed be in the long-run self-interest of a business to "devote resources to providing amenities to [the] community..." in order to "generate goodwill" and thereby increase profits.

Another famous economist highly critical of this doctrine is R. Edward Freeman, author of a number of papers on stakeholder theory from an explicitly libertarian perspective.

Can a business be socially responsible?
This brings us to the next question in the search for the meaning of socially responsible ethics and what it means to business. Can a business be socially responsible? If it can be then criteria does it need to be to ensure that it is perceived in this manner? For each business it must be a different measure. (Kaliski, 2007) After all, each business is trying to reach different goals. However, there are four areas that should be measured not mater what the outcome that is needed. Those measurements are Economic function, Quality of life, Social investment and Problem solving. In economic function the goal that is trying to be achieved should be measured to see if it meets with the cost guidelines that the business is willing to contribute. (Kaliski, 2007) For instance if the business were to try to better the plant by reducing its carbon footprint; how would it go about doing this? (Carbon Footprint, 2006) Would it begin by doing something major like installing water heaters throughout the building or re-doing the building insulation? Or would they begin in small ways that would be more cost effective like mandating that parking lots lights are turned off at a certain time? Or that office computers all be turned off at the end of the workday instead of being left on and simply logged out. In the quality of life measurement “should focus on whether the organization is improving or degrading the general quality of life in society”. (Kaliski, 2007) Does the business produce a tangible good? Is that tangible good anything that betters society and how people live? If the business produces a service, then does that service do anything to improve how people live? If the answer to those questions was no, then how could the good or service produced better society?

Social investment looks at what the business is doing for the community. (Kaliski, 2007) Does the business work with the community to fix outstanding issues and social problems? How much of an investment does it make? What issues are they addressing? To what depth are the problems that they are working to fix? Are they trying to fix major issues like drug addiction in impoverished areas or are they working on smaller issues like providing recreation activities for youth? Is the problem they are working on fixing a large social problem with far-reaching consequences? Or is the problem a localized one that is area specific?

Problem solving looks at to what extent the business will work to fix the problem. (Kaliski, 2007) Will the business simply contribute money to an organization working on the issue? Will they allow company employees to volunteer on company time to fix the problem? Will it pay others to fix the problem? Will is actually be in the trenches working on the issues? Will they company actually have a department working on the issue and nothing else?