Fundamentals of Social Responsibility

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Fundamentals of Social Responsibility:

Corporate Social Responsibility: The managerial obligation to take action that protects and improves both the welfare of society as a whole and the interests of the organization.
Davis Model of Corporate Social Responsibility:

Keith Davis: A generally accepted model of corporate social responsibility. List of 5 propositions that describe why and how business should adhere to obligation to take action that protects and improves the welfare of society as well as of the organization.

Davis model:

Proposition 1: Social responsibility arises from social power: Business has power over society and can influence minority and environmental pollution issues.
Proposition 2: Business should operate a 2 way system: Inputs from society and open disclosure to the public.
Proposition 3: Social costs and benefits shall be considered prior to proceeding: Profits are not the only factors involved.
Proposition 4: Social costs shall be passed on to the consumer: Business can bot be expected to foot the bill for social activities; the cost must be passed along to the consumer as well.

Proposition 5: Business has a responsibility for some social problems outside their normal area of operation: Business should help solve social problems, if they can.
Performance of Social Responsibility Activities by Business:
Perform all legally required social responsibility activities. Consider voluntarily performing social responsibility activities beyond those legally required. Inform all relevant individuals of the extent to which the organization will become involved in performing social responsibility activities.

Performing Required Social Responsibility Activities:

Federal Legislation requires that business perform certain social responsibility activities. Environmental Protection Agency(EPA): Enforces socially responsible environmental standards. Equal pay act of 1963: Equal pay for equal work. Equal Employment Opportunity Act of 1972:

Highway Safety Act of 1978
Clean Air/ Act Amendment of 1990.

Voluntarily Performing Social Responsibility Activities: Assessing the positive and negative outcomes of performing social responsibility activities over both the short and long term, and the performing only those activities that maximize management system success while making a desirable contribution to the welfare of society.

Social Responsiveness:

The degree of effectiveness and efficiency an organization displays in pursuing its social responsibilities.
Determining Whether a Social Responsibility Exists:
Determine which specific social obligation are implied by specific business situations. Ex: tobacco execs need to consider reducing harm to public while increasing revenues. Social Responsiveness and Decision Making:

Socially responsible organizations are both effective and efficient in meeting its social responsibilities without wasting organizational resources in the process. Approaches to meeting Social Responsibilities:

Two types of proposed approaches:
Lipson
S. Prakash Sethi

Lipson's Approach:
Incorporate social goals into the annual planning process. Seeks comparative industry norms of social programs. Presents reports to all stakeholders on social responsibility progress. Experiments with different approaches for measuring social performance. Attempts to measure the cost of social programs as well as the return on social program investments.

S Prakash Sethi's...
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