Organisational Operations.
Social responsibility refers to a situation whereby people or organisations behave ethically and with sensitivity towards social, cultural, economic and environmental issues. The people and the organisations make it their business to take care of these issues. They are thus able to develop a positive responsibility in the environment in which they exist. According to the International Organization for Standardization this particular relationship is a critical factor in the ability of an individual or organization to operate effectively. Carroll’s (1979, 1991) identified four categories of social responsibility economic, legal, ethical and philanthropic.
McGuire (1963, p144) argued that the idea of social responsibility supposes that the corporation has not only economic and legal obligations but also certain responsibilities to society that extend beyond these obligations. Organizations need to be socially responsible because it would mean a better relationship between it and its customers. Customers are known to prefer products that support a cause. According to a Forbes article on social responsibility it states that more than 88% of consumers think that companies should try and achieve their business goals but at the same time strive to improve the society and environment. Such activities include charities and non-profit financial donations. Customers believe that such companies have positive thoughts beyond making profits at heart. This serves to draw them apart from their competitors. This can only mean increased profits for the company. Investors are also known to be more willing to invest in a company that is socially responsible a good example is when investment firms and stockbrokers pulled money away from BP due to its operations in Alaska. According to Harried Sabetti in an article titled The For Benefit Enterprise, new trends are supporting business that are socially responsible for example accounting standards, financial markets and professional services. According to him there will be an emergence of a fourth sector of the economy which is expected to reshape the future of capitalism. Benefitting these companies.
Employees would also wish to work in organisations that are socially responsible. The great driving force in a company is its working force. According to Jack Welch GE’s CEO the guy behind the company’s growth, you build the best team, you have a high chance of winning. Most employees would prefer working that is socially responsible. In this respect an International Corporate Social Responsibility study of Human Resource Management show that social responsibility is very important to employee morale. With this, a company is able to tap the best talent that is up to the task in performing a particular task in the organization. This would more profits for a company that has decided to embrace social responsibility.
From Valuation: Measuring and Managing the Value of Companies second edition, value based management is a new management approach which is geared at improving organizational performance. It is a customer based system built upon shared principles and core values. Geared at instilling an ownership within an organization. Values-based management is not just a “do-gooder” ploy. This is because of various factors that are usually at play which makes more than a “do-gooder” ploy. For example, when an organisation practices value based management, managers are guided by the company’s shared values as they make decisions and as they work for their organizations. This is because, value based management combines the goals of corporate social responsibility with the metrics used in Value Based Management. Managers are therefore leaders and they view themselves as servants of the organization who empowers others to achieve their maximum potential but not one who rules by fear or refuses to be accountable to others.
To balance the interests of a variety of stakeholder groups, management require to ask themselves as they analyse this. This is in order to meet each of their need. Such questions include who are the organizations stakeholders. Stakeholders to a company are people that the company has accepted benefits and to whom the company hold obligations. These stakeholders need to be respected because they play a role in the company’s running and influence the organizations success. Stakeholder theory maintains that stakeholders are owed an obligation by the organization and they may exert beneficial or harmful influence to a company. The second question could be what stakeholders want. This is because their interests are varied. Stakeholders also need to be listened to since they have a voice in organizational decision making and they should therefore be listened to. Another question is why managers should pay attention to stakeholders. According to Milton Friedman shareholders own a firm by the virtue of owning equity shares and they wish to maximise the value of their shares. Managers have been given a responsibility by shareholders for example to maximise their wealth and going against this would be violating their moral property right. Another question would be what the managers should prioritize among stakeholders. Managers should be able to allocate time and resources to all stakeholders. This should be based on their needs in the organization. Those stakeholders with needs that are very crucial should take moral precedence among the others.
Managers are very powerful individuals in any organization and they have a great deal of power. Due to this, there is always a danger of them misusing discipline in their organizations. For example when they practice favourism in an organization. They may particularly favoured certain individuals within the organization since they like them or because a form corruption took place where maybe money was exchanged or an offer was extended to the manager so as to make them prefer certain individuals over others for example when giving promotions. In case they highly dislike those they do not favour.
Some managers also don’t love listening to their subordinates. Their opinion is thus highly disregarded. You have to do as they like it and your opinion however correct is not regarded. They also retaliate against anyone who does not agree with them and may even terminate their employment with the organization without any good reasons. In this case they always have reasons to do away with you.
REFERENCES
-IVEY business journal- Improving the Practice of Management- Key Questions about Stakeholder Theory.
– Valuation: Measuring and Managing the Value of Companies second edition,
– The Business Case for Corporate Social Responsibility: A review of Concepts ,Research and practice- Archie B. Carrol and Kareem M shabama.
