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The words "social responsibility" may be famous among some companies but may be unimportant to others.

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Introduction

The words "social responsibility" may be famous among some companies but may be unimportant to others. Social responsibility can be defined as a specific company's obligations to pursue long-term goals, which may be gainful for the society beyond the requirements by the law and economics (Robbins, et. al., 2003: pp. 138). The businesses and organizations are engaged in activities to care for, conserve and contribute to the society's welfare both externally and internally. Social responsibility requires an organization's mission to maximize its positive impact on and minimize the negative occurrences (Lantos. G, 2001: pp. 5). Social responsibility can be sub-divided into two opposing categories. They are, the classical view or also called the purely economic view, and the socioeconomic view. Derived from today's society, majority of businesses are implementing the socioeconomic view as its benefits outweighs the cost. However, the two views that conflict one another will be explained in detail below. One of the views stated in social responsibility is the classical view or also known as the purely economic view. A business, which practices this view, only has the social responsibility of maximizing the company's profit. It is also stated that the manager's main priority is to operate the business in the best awareness of their shareholders (Robbins, et al., 2003: pp. 136). Most companies do not produce social goods as it adds to their costs. Being socially responsible may cause shareholders to have a lower rate of return; consumers will lose, as they have to pay a higher cost and also, employees will lose, as they are only able to obtain low-level wages. ...read more.

Middle

Joyner and Payne (2002) state "Managing by value, not by profits, is a powerful process that will set the business on the path to becoming a 'Fortune 500' company". Hence, it can be seen that practicing socioeconomic view is better than classical view and clearly, economic responsibilities are not the greatest magnitude for an organization but being able to survive and obtain profit in the long run would better benefit everyone. The importance of economic responsibility can be seen from the "Pyramid of Social Responsibility". Alan Jones (2002) states, "The base of the pyramid is economic responsibilities followed by legal responsibilities and the top with ethical responsibilities". A company, which only has profit maximization as primary priority from classical view may as well suffer through legal approaches if they do not constitute to protecting the welfare and environment. For example, as stated by Robbins (2003), Manville Corporations in the United States have been charged for producing asbestos, which causes fatal lung diseases. This company was practicing classical view and being economically responsible as to maximize profit. However, this company was forced to file for bankruptcy as this company was concealing information regarding the sickness that affected some of its employees. Hence, economic responsibilities suggested by classical view are not the greatest magnitude of an organization but being socially and ethically responsible is far more important. Consequences after being just economically responsible may be higher then maximizing profit itself. The hazards, which may occur after a company tries to maximize profit, could bring the company down in the future. ...read more.

Conclusion

Hence, it became an internationally well-known company and is earning millions of dollars after a few years. This shows that implementing socioeconomic view benefits not only the environment and welfare of society but also maximizes the profit in the long run. It proves that economic responsibilities by classical view are not the greatest magnitude. Another example to show the economic responsibilities are not the greatest magnitude is through the story "Exporting A Problem" by Macabe Keliher. This article is about Taiwanese companies dumping their toxic waste in other countries as Taiwan has tighter environmental companies have to pay a large amount of fines and this could jeopardize the company's survival. Hence, their profit-making motive would never be successful. From the example given, we can tell that implementing classical view, which suggests that economic responsibilities are the greatest magnitude is not true as maximizing profit is not the main priority, nevertheless, being able to survive, protecting the environment and the welfare of others in socioeconomic view are the greatest magnitude. In brief, economic responsibilities such as maximizing profit as the primary priority are not the greatest magnitude of an organization but being ethical and socially responsible by preserving the environment and protecting the welfare and, others, is the greatest magnitude for survival of the company in order to maximize revenue in the long run such as The Body Shop illustration. Hence, businesses and companies should practice the socioeconomic view as they can implement both protection and preservation of welfare and environment, and, maximize profit in the long run, rather than merely maximizing profit as long as it constitutes to the legal requirements. 2489 words 1 ...read more.

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