Businesses have an obligation to operate far beyond solely making profits and abiding by business laws
Victoria Lesko
DB 1
COLLAPSE
Businesses have an obligation to operate far beyond solely making profits and abiding by business laws. Stakeholders may not be interested in a business practicing social responsibility however, consumers are demanding more businesses to be socially responsible. Therefore, businesses are starting to adhere and implement social responsible business practices because of the backlash they can receive from consumers. “The consumer demand for responsibly produced and fair trade goods is swelling, resulting in increased demand for corporate social responsibility activity and information” (Holder-Webb et al., 2009, p. 497).
Technology plays a major role in the shift from profit driven businesses to social responsible businesses. The use of technology gives consumers access to unlimited information regarding business activities and allows them to do their own research before purchasing items. Companies can suffer huge financial losses if they are deemed to conduct business in a non-socially responsible matter. Society has created a demand for corporate virtue and businesses have responded in varying degrees and have been able to reap financial benefits in the process by behaving accordingly (Berger et al., 2007). Social responsibility and financial gains can be accomplished simultaneously because consumers want to support businesses that give back to the community, protect the environment and advocate for social and political issues.
Therefore, the statement made by Milton Friedman is not as relevant today as it might have been back in 1976. In 1976, technology was not easily accessible by consumers so businesses were more profit driven rather than consumer focused. More than 40 years later, the call to action businesses are experiencing from not only from consumers, but employees, is causing businesses to shift their focus to more social responsible business practices. Businesses are also starting to realize the benefits that come from adhering to social responsible business practices. Financial success can result from sustainable corporate social responsibility actions and consumers are able to keep these businesses accountable by supporting their actions.
References
Berger, I. E., Cunningham, P. H., & Drumwright, M. E. (2007). Mainstreaming corporate social responsibility: Developing markets for virtue. California Management Review, 49(4), 132-157. doi:10.2307/41166409
Holder-Webb, L., Cohen, J. R., Nath, L., & Wood, D. (2009). The supply of corporate social responsibility disclosures among U.S. firms. Journal of Business Ethics, 84(4), 497-527. doi:10.1007/s10551-008-9721-4
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