CORPORATE SOCIAL RESPONSIBILITY
The term social responsibility means different things to different people. Generally, corporate social responsibility is the obligation to take action that protects and improves the welfare of society as whole as well as organizational interests. According to the concept of corporate social responsibility, a manager must strive to achieve both organizational and societal goals. Current perspectives regarding the fundamentals of social responsibility of businesses are listed and discussed through (1) the Davis model of corporate social responsibility, (2) areas of corporate social responsibility, and (3) varying opinions on social responsibility. A model of corporate social responsibility that was developed by Keith Davis provides five propositions that describe why and how businesses should adhere to the obligation to take action that protects and improves the welfare of society and the organization: * Proposition 1: Social responsibility arises from social power. * Proposition 2: Business shall operate as an open system, with open receipt of inputs from society and open disclosure of its operation to the public. * Proposition 3: The social costs and benefits of an activity, product, or service shall be thoroughly calculated and considered in deciding whether to proceed with it. * Proposition 4: Social costs related to each activity, product, or service shall be passed on to the consumer. * Proposition 5: Business institutions, as citizens, have the responsibility to become involved in certain social problems that are outside their normal areas of operation. The areas in which business can become involved to protect and improve the welfare of society are numerous and diverse. Some of the most publicized of these areas are urban affairs, consumer affairs, environmental affairs, and employment practices. Although numerous businesses are involved in socially responsible activities, much controversy persists about...
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