Need for Social Responsibility

This section opens the central question: what is the right thing for a business to do? Should a firm be run purely for the benefit of its owners, who may want the maximum possible profit — or is it responsible for serving other sections of society such as customers, employees, suppliers, government and the community?

• Social responsibility is essentially an ethical issue, because it turns on what is morally right or wrong in relation to the firm's responsibilities.
• It also carries an element of voluntary action — a businessperson may feel free to perform, or not perform, these responsibilities, and may decide how far to serve various sections of society. In practice, not all business people feel equally responsible.
• Because of this, a long-standing debate exists: one view holds that a firm's only social responsibility is towards its owners; the opposite view holds that a firm is responsible to all sections of society affected by its decisions and actions.

Corporate Social Responsibility (CSR) and sustainability (informational box): Corporate sustainability is the role companies can play in meeting the agenda of sustainable development — a balanced approach to economic progress, social progress and environmental protection. There is no single, universally accepted definition of CSR, but each definition stresses the impact business has on society and society's expectations of business. Two cited definitions:

• European Commission: CSR is "the responsibility of enterprises for their impacts on society". …