Arguments For and Against Social Responsibility

Arguments in favour of business accepting social responsibility:

1. Long-run self-interest: A business that maintains a healthy, educated and prosperous community around it ultimately benefits from a larger market, a more productive workforce, and social stability that protects its own long-term interests.
2. Public image and goodwill: Socially responsible conduct builds a favourable public image, which can translate into customer loyalty and easier access to capital, government approvals and talented employees.
3. Avoidance of government regulation: A business that voluntarily behaves responsibly reduces the pressure on government to impose stricter regulation on the industry as a whole.
4. Business has the resources: Businesses command significant financial, technical and managerial resources that can be deployed effectively to address social problems.
5. It is the right thing to do: Since business draws so much from society — capital, labour, natural resources, infrastructure — it has an ethical obligation to give something back.

Arguments against business accepting social responsibility:

1. Violation of profit-maximisation objective: Critics argue that a business exists to earn profit for its owners, and diverting resources to social causes is really diverting shareholders' money without their explicit consent.
2. Burden on consumers: The cost of social-responsibility activities may ultimately be passed on to consumers through higher prices.
3. Lack of social skills: Business managers are trained to make business decisions, not necessarily to judge the best way to address complex social problems — that expertise may lie better with government or specialised social organisations. …