Question

What is the purpose of the for-profit firm? What value does it create for society? What is the relationship between a firm and the societies in which it operates? What responsibility does a firm owe society to self-regulate its actions in pursuit of profit? Define corporate social responsibility and how Corporate Social Responsibility (CSR) affects firms’ ability to meet (or not) their social obligations, if any.

Answer 1

A for-profit corporation is one whose main purpose is to make money, that is to make a profit. It compares with a non-profit or not-for-profit company that is focused on keeping themselves going. Non-profit organizations usually have other non-business purposes, such as civic support. The vast majority of corporations are for-profit entities around the world. Your nearby corner store, restaurant, and supermarket is all organized for profit.

Business-to-society contact is necessary for the company to thrive and for society to benefit from the business process. There are two types of business-to-society connections, generally. The primary engagement of a company with society requires all the direct relationships required for it to fulfill its main task of manufacturing and supplying products and services for the community.

The business environment consists of the community in which it operates, the government which establishes and operates the business under its legal provisions. The business company takes from its staff the energy and expertise and generates products and services. Consumers purchase the goods and services that are the business' goal and target. The owners are, of course, the business' creditors and the managers channelize the financial support they have to achieve the best results. In this phase, numerous secondary concerns and parties including employee unions, consumer concerns, environmentalist demands, rival competitors and so on also need to be discussed.

Corporate Social Responsibility is a management philosophy whereby businesses incorporate social and environmental issues into their business processes and their stakeholder interactions. CSR is commonly defined as the manner in which a business maintains a balance of economic, environmental, and social imperatives while meeting shareholder and stakeholder expectations at the same time. It is important in this sense to draw a distinction between CSR, which can be a concept of strategic business management, and charity, sponsorships or philanthropy.

CSR affects the ability of a company to recruit top talent, and influences the levels of work satisfaction and retention rates of employees. Currently joining the workforce the next generation of employees are seeking employers with a simple and successful CSR strategy. In 2016, quality talent wants to be employed by a transparent company with the objective of doing good, while also making a profit. Businesses that do not pursue a plan for corporate social responsibility risk losing the best talent to businesses that do so.

The emergence of social media has also influenced the value of social responsibility for businesses. Today, firms with unethical business practices are unfairly revealed on social media and can greatly harm their image in a matter of a couple of hours. Alternatively, social media also acts as a platform to highlight businesses that adopt CSR or those with ethical business practices that can result in improved revenue, a wider market reach and free constructive ads.