The primary objective of doing business is to earn a profit. Besides earning profit, the other responsibility of doing business is the social responsibility that is inherent with earning profit from the public. The public paves the way for the success of an organization in the long run. So, it is the responsibility of the business house to return something in service or in other forms of value to contribute to the welfare of the society. The first opportunity of this thesis is to justify, so as to why businesses have a corporate social responsibility. The major focus will be on the socio-economic responsibilities of corporate houses towards the society as a whole. The businesses need to survive with significant margins of profit, but at the same time, they need to contribute to the betterment of the people, from whom they are earning a profit.
Corporate Social Responsibility
The customers are a base of building good businesses, and it is often the customers who decide on the long-term fate of the business. The customers are entirely dependent upon many factors at large. The major factors that influence the customer's perception are a competitor brands marketing strategy, new advanced products or services and the necessity of the product or service to the people (Hunnicutt 2009). Beyond doing businesses, companies need to formulate such an organizational culture, which promotes the sense of responsibility towards the environment on which the company operates. Some management thoughts schools also argue that, if the companies tend to focus on the responsibility aspect of the society, they will lose focus on the primary goal of business that is earning a profit. The major drawback to this statement is that it faces severe limitations in restricting the scope of the company's objectives which must correlate with the progressive strategies towards the environment (Ybema, Yanow and Sabelis 2011). The company cannot afford lose its profit but what it can certainly do is, set aside some parts of that profit to undertake holistic plans to uplift the condition of the society. The business house leadership should be applying their conscience in finding ways to integrate their efforts of both learning and doing well to the society (Hoffman 2000). The next topic of discussion will be on plans to integrate profit with progressive planning.
Integration of Profit margin with Societal Funds
The business leader must judiciously plan the ways in which the company can both serve the people and the environment and earn a profit as well. What if the business doesn’t comply with the code of ethics and responsibility? The business will have to comply with the objective in the long term (Tracy 2014). In the long run, the customers won't be aloof to the fact that the company doesn't contribute to the developmental process of the nation. If this situation happens, the customers will abandon the company's loyalty and will shift to another product. The business houses that have become successful have always contributed to the cause of social progress. Some businesses who have concentrated on earning massive margin profits without significant contribution to the society have lost out on competition. The leaders must concentrate on building schools and providing infrastructure to the underdeveloped regions of the nations. The companies have been both successful as well as have earned a huge respect from social culturists (Johnston 2009). The governments also provide incentives to the business houses contributing to the progress of the nation. The planning process is very crucial in integrating profit and progress. Progress can be both made internally as well as externally. An industry might provide free housing, a school for all and free quality medical care for all residents in the locality of their operation. The profit aspect will be taken care of itself if the duties towards the people are fulfilled by the company in due time. The people are well informed now a day and will buy a product which is sourced in a fair manner.
Indicators of social performance of a business
The social indicators of performance varied in nature. They range from safety and work standards the companies create and maintain for their employees, and the health facilities provided by the company (Herrmann 2012). What if, the company doesn’t provide these central facilities? If the company fails to achieve the required heat standards and associated safety risks, the company would soon be earmarked by authorities for economic sanctions. The company needs to provide these crucial employee benefits, or they would lose their human resources to other rival companies. The employees are better motivated in their work if the company has certain appreciative measures to evaluate their performance (Gashi 2013). If all the employees notice, that the company cares for them and seeks their full safety in work environments, they will be better motivated to work under this company. The company must also take appropriate measures for the well being of the employee's family. The employee's family must get medical benefits and other associative care for free. If the company makes such social investments, it would be beneficial for the company in the long run. The company would be benefitted by the high employee turnover and better profit margins which are a direct derivative of corporate social investment (Idowu et al. 2013). The company would be ahead of its competitors if they can satisfy their employees first, then focus on the primary objective of meeting the customer's needs. The various developmental activities that must be focused upon can be unique to each company, and specific to the environment where the company operates from.
The progressive planning for effecting social changes
The high level of planning is necessary to integrate profit making efforts and developmental activities. But what are also necessary are the tools to begin functioning with. The management of developmental activities can be complex and varied regarding areas of application. What happens when the company fails to succeed in the progressive developmental process? The company must not fail, because, even if it fails, it will be pointed to by the regulatory authority of the area and the local communities. The participation of the local communities and the business leadership is crucial for this to happen, since, it is often seen that the plans stay at the table, and all concerned parties aren't made aware of the decision that was taken. The plans aren't implemented, and the communities aren't aware of the plans of development, so they get apprehensive about the company's intentions (Balasubramanian 2007). It is for the well-being of the people and the employees that the company gives proper incentives other than the regular remuneration for appreciative activities (Morris 2010). Often, the companies have a specific Social Cell that regulates the fine balance between profit making and progressive developmental activities.
The company management and leadership are better motivated by the influx of huge profit. But the employees are hardly attentive to the profit making aspect./ Either the employees want better pay packages for themselves or health benefits for themselves or their families. If the company provides the minimum of these activities, its motivates the individual working for the company. The businesses need to divert their attention from making financial breakthroughs and reaping harvests of profits and set aside their profit margins for developing the society at large. A major stationery company manufactures exercise books in India. The company clearly states that if a customer buys this notebook, he is directly contributing 2 per cent of the notebook's cost to the welfare of village education system. The customer always buys that product which makes him aesthetically sensible and humble towards his environment. It is true that companies which dedicate more time and efforts towards developing the culture of Social Responsibility sustains market presence and stays afloat in financial crisis situations.
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Ybema, S., Yanow, D. and Sabelis, I. (2011). Organizational culture. Cheltenham, UK: Edward Elgar Pub.