Page 91 - Fundamentals of Management Myths Debunked (2017)_Flat

90 Part 1 • Introduction
On the other side is the socioeconomic position, which
holds that management’s responsibility goes beyond
making profits to include protecting and improving
society’s welfare. 15
When we talk about social responsibility (also
known as corporate social responsibility, or CSR), we
mean a business firm’s intention, beyond its legal and
economic obligations, to do the right things and act in
ways that are good for society. Note that this definition
assumes that a business ❶ obeys the law and ❷ pur-
sues economic interests. But also note that this defini-
tion ❸ views a business as a moral agent. In its effort
to do good for society, it must differentiate between
right and wrong.
PRNewsFoto/Chicco USA/AP Images are those activities a business firm engages in to meet
We can understand social responsibility better if we
compare it to two similar concepts. Social obligations

certain economic and legal responsibilities. It does the
minimum that the law requires and only pursues social
goals to the extent that they contribute to its economic
goals. Social responsiveness is characteristic of the
business firm that engages in social actions in response
to some popular social need. Managers in these compa-
Artsana, the Italian maker of Chicco baby
care products, invests in social responsibility nies are guided by social norms and values and make
16
initiatives that help children in need both in practical, market-oriented decisions about their actions. A U.S. business that meets federal
Italy and in the poorest regions of the world. pollution standards or safe packaging regulations is meeting its social obligation because laws
Chicco’s global “Happiness Goes from Heart
to Heart” project is aimed at treating mandate these actions. However, when it provides on-site child-care facilities for employees
childhood heart disease and supports the or packages products using recycled paper, it’s being socially responsive to working parents
brand’s mission of “making children happy and environmentalists who have voiced these social concerns and demanded such actions. For
and giving them something to smile about”.
many businesses, their social actions are probably better viewed as being socially responsive
rather than socially responsible, at least according to our definitions. However, such actions
are still good for society. Social responsibility adds an ethical imperative to do those things
social responsibility that make society better and to not do those that could make it worse.
(corporate social
responsibility, or CSR)
A business firm’s intention, beyond its legal and
economic obligations, to do the right things and act Watch It 1!
in ways that are good for society
If your professor has assigned this, go to the Assignments section of mymanagementlab.com to
social obligation complete the video exercise titled Honest Tea: Corporate Social Responsibility.
When a business firm engages in social actions
because of its obligation to meet certain economic
and legal responsibilities
social responsiveness Should Organizations Be Socially Involved?
When a business firm engages in social actions in
response to some popular social need
Managers regularly confront decisions where social
responsibility is a factor.

The importance of corporate social responsibility surfaced in the 1960s when social activists
questioned the singular economic objective of business. Even today, good arguments can be
made for and against businesses being socially responsible. (See Exhibit 3–2.) Yet, arguments
aside, times have changed. Managers regularly confront decisions that have a dimension
of social responsibility: philanthropy, pricing, employee relations, resource conservation,
product quality, and doing business in countries with oppressive governments are just a few.
To address these issues, managers may reassess packaging design, recyclability of products,
environmental safety practices, outsourcing decisions, foreign supplier practices, employee
policies, and the like.