Importance Of Social Responsibility In Business

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Importance of Social Responsibility for Businesses
Business plays an important role in the economy as well as in the society. Since businesses are run by private owners, they act in the way that increases their profits. But, because of their great influence, businesses are expected to also take some social responsibility. Milton Friedman, in the essay “The social responsibility of business is to increase profits”, argues that businesses’ only responsibility is to increase its profits and although they may do generous deeds, they are not required to do them (Friedman 157-164). However, this type of mentality can harm business. Social responsibility is no longer a choice for business but rather a way for them to survive because disregard for
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One example of cheating in business can be the Sears automotive repair chain scandal during the 1990s. Since the stock prices of a company are very important, the pressure to keep the prices high leads businesses to take drastic actions. To improve their earnings, Sears implemented a new system of compensation. This put the employees under immense pressure to increase their sales to keep their jobs. In turn, employees engaged in cheating such as dishonesty about the amount of repairment needed in a vehicle. This method of increasing profits did not continue for long. Consumers complained about the cheatings in the Sears stores and soon investigation began on Sears in 44 states. This scandal not only dropped Sears in the public eyes, but also cost it almost $2 billion in fines, settlements, and lawsuits (Callahan 129-130). Even if a company can make up the money lost in a cheating scandal, the negative image a company gets after cheating can forever be a stain on its reputation and reduce the number of future …show more content…
Aside from the fact that companies contribute to pollution greatly and therefore should help in reducing it, companies should also strive to create environmental friendly practices because it can be profitable to them. Companies can make a positive impact on the environment by decreasing fossil fuel use and energy consumption. Reduction of energy consumption is beneficial not only for the environment, but also for the companies since it causes cost reduction. Similarly, water conservation is useful for both people and businesses because drought conditions in both present and future can have a significant impact on companies. Waste reduction is another way businesses can help improve environment. Recycling, reusing, and selling can save businesses money (Grayson and Kjelleren). These various examples of environmentally friendly practices show that being environmentally responsible is not just good for the planet, but for the companies as well and companies will have to start using such practices to keep up with the

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