Exam 6: Managing Social Responsibility and Ethics

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Arguments in favor of business social responsibility include: a.Public expectations - Public opinion now supports businesses pursuing economic and social goals.b.Long-run profits - Socially responsible companies tend to have more secure long-run profits.c.Ethical obligation - Businesses should be socially responsible because responsible actions are the right thing to do.d.Public image - Businesses can create a favorable public image by pursuing social goals.e.Better environment - Business involvement can help solve difficult social problems.f.Discouragement of further governmental regulation - By becoming socially responsible,businesses can expect less government regulation.g.Balance of responsibility and power - Businesses have a lot of power and an equally large amount of responsibility is needed to balance against that power.h.Stockholder interests - Social responsibility will improve a business's stock price in the long run.i.Possession of resources - Businesses have the resources to support public and charitable projects that need assistance.j.Superiority of prevention over cures - Businesses should address social problems before they become serious and costly to correct.Arguments against business social responsibility include: a.Violation of profit maximization - Business is being socially responsible only when it pursues its economic interests.b.Dilution of purpose - Pursuing social goals dilutes business's primary purpose of achieving economic productivity.c.Costs - Many social responsibility actions do not cover their costs and someone must pay those costs.d.Too much power - Businesses have a lot of power already and if they pursue social goals they will have even more power.e.Lack of skills - Business leaders lack the necessary skills to address social issues.f.Lack of accountability - There are no direct lines of accountability for social actions.