In all business environments, the agenda of competition is the most significant. A business has to present competitive strategies concerning the market it shares with other similar entities. Even if a business enjoys monopoly power, it has to keep devising ways of streamlining its efforts towards its goals. Business goals are of composite nature and constitute of a complex collection of intertwined objectives. Most of the objectives, such as profit, have magnitude as the determinant factor of success. However, well-balanced objectives bestow responsibility on any business. A business has to conduct its activities and policy implementation in such a way that the impact on all aspects of the society is well within acceptable limits of the particular society. Social responsibility includes accountability of its actions towards the employees and accountability towards the customers, and the population in the immediate physical environment of the business.
The law considers the corporate social responsibility factor when formulating regulations for the business environment. To a certain limit, the legal guidelines are sufficient to ensure that businesses observe the fundamental guidelines of corporate social responsibility. However, the structure of the law is such that it encompasses corporate social responsibility issues only at the moment of formulation. The law has its basis on the experience in the past, the present situation and speculation or anticipation of the events to take place in future. The future is one aspect of the business environment that is difficult to determine precisely. It is important that any business or corporate entity consider setting standard criteria for developing solutions to any social issue arising in the business environment in future. These criteria of developing solutions should observe the limits set by the law, but must take into account the areas left out by the law. In this essence, the set criteria are able to govern a situation where the law is too obsolete to offer reasonable guidance. The development of criteria for solution formulation is done in the light of the knowledge that the law is not sufficient in taking care of the developments of the future. In particular, developments in technology and standard procedures of going about issues in business could change with time leading to loopholes in the legal guidelines. A sound corporate setup should not consider this loophole as an advantage to gain, but should adopt a solution to guide the business in its affairs while exercising full social responsibility. An example of technological development is the software and music industry. It is universal that all music is purchased for listening whether from a shop or online in the internet. A software firm develops software that enables the users to download and listen to music from the internet without the authority of the owner of the music. International law recognizes duplication of copyrighted music as an offence. In many countries, the law concerning the use of internet and software is vague, and thus the developer of the program can argue that the manner in which the user of the software applies it is not within their legal responsibility definition. According to the law, the software developer has exercised full social responsibility when marketing the product. However, business ethics may consider the action of the software developer to be a gross transgression and irresponsible since the software directly aids perpetration of a criminal offence without adding any other benefit for the user. The business entity has thus not observed the corporate social responsibility expected of it (Jennings 8).
Majority of corporate entities aim to survive in business as long as possible. For the business to lay lasting foundations in the society in which it exists, social responsibility is a major ingredient in implementation of its policies. Since all businesses are part of a society, the business entity has to be relevant to the society for it to survive. Moreover, the business should not pose any threat to the interest of the society. To ensure this, corporate social responsibility has extends beyond the definition by legal statements. This argument sufficiently explains importance of full social responsibility of the business to the business.
Ideal corporate entities are allowed to exist in the society with the primary aim of creating better environmental conditions for the society to thrive in. the existence of all business setups is based on the perceived importance of the businesses to the society. Otherwise, the society would not allow business setups to exist since they would pose as barriers to the activities of the society. The general aim of all business is creating better conditions and efficiency in the society. To realize this aim, the corporate entity must focus on the needs and nature of the society when exercising social responsibility. If a business is determined to maintain its practices within the limits of the law alone while ignoring the plight of the society, then the business entity will be breaching the fundamental theories that constitute the reason for its existence. Thus, business must play its role properly to be meaningful to the society.
For perfect business practices to endure, a business must set a definition of its corporate social responsibilities parallel to the law while considering the universal laws too. Different countries and business environments have different rules to govern business activities. Some countries or environments may have less definitive laws regarding business activities as a deliberate tactic to attract investment. In this kind of a setup, the conduct of some practices in the business is at the discretion of the business since the law does not set a sufficient standard that the business is supposed to observe. It is upon any particular business to decide the position to assume to make progress businesswise while still maintaining an acceptable level of social responsibility. Taking advantage of the lapse situation within the business environment to make extra profits does not mean that the business is performing well. This kind of action could mean that the business ranks poorly in the scale of usefulness in realizing a better society (Boeger et al 40).
Social responsibility may involve the behavior of the employer towards the workforce or labor. As an important part of the business, the treatment of labor should ensure its maximum utilization. This is only possible if the company utilizing the labor takes into consideration the effect of each of its actions on the workforce. The well-being of the workforce is the chief determinant of the strength of the business entity. This is because the workforce develops and implements all policies within the organization. In this regard, to provide a motivational force, the business’s perception should be that of concern about the welfare of the workforce beyond the threshold required by the law. Invoking the requirements of the law alone when dealing with labor social issues may develop a casual attitude in the workforce such that the workers will only offer the minimum effort required by the contract between them and the company. This kind of a relationship between the employer and the labor force could lead to a dismal performance of the company.
Corporate entities thriving within a particular environment owe their existence to the society in which they are set. The law does not require the businesses to ensure wellbeing of the society and in the case where it does, the degree of participation of the corporate entity in the endeavor of betterment of the society is ill defined. A company has to devise it own regime for developing a relationship between themselves and the society so as to realize long term stability in the face of competition in the market. This regime is beyond any law that the relevant authorities can formulate. This is because their basis is that of goodwill rather than the need to stay within any legal boundaries. The philanthropic aspect of a company is part of corporate social responsibility. An example is the relationship between a company and a customer who is in the immediate physical environment of the corporate entity. It requires more than legal correctness to convince the customer to purchase the commodities of the company. A good relationship has to exist between the company and the customer based on appropriate social relationships developed by the company (Boeger et al 85). Good relationships are dependent on the extent to which the company goes to ensure a good relationship with the society, and this is beyond observing legal responsibility.
In some cases, two or more lines of operation, which are different areas of specialization of different businesses, may affect each other negatively. One business entity may modify its products such that the product conforms to all standards requirements set by the law. However, the modification of the product may lead to poor performance another product produced by another company. In this case, the problem arises when the two products are not in direct completion in the market. The company that modifies its products to make more sales while deliberately tampering with the marketability of another product breaches the concept of social responsibility of any corporate institution. An example is the manufacture, by Sony Corporation, of video recorders that could record a television signal by one broadcaster for future viewing while displaying another channel. This limited the control of viewing of programs broadcast by entertainment companies like the Disney World and Universal. Sony Corporation was well aware of the effect of their products on the products of Disney world and Universal, but manufactured the product because of the anticipated sales and profits. A legal contest by universal and Disney world against Sony Corporation failed as the court ruled in favor of Sony Corporation in conformity with the existing provisions by the law. Sony Corporation had carried out its legal responsibilities well but had failed to honor the corporate social responsibility it had as an electronics manufacturer. Sony Corporation’s strategy lacked a sound ethical aspect that is necessary for realization of full social responsibility though it added quality to their electronic product. In this particular case, Sony Corporation had a social responsibility of ensuring that it did not aid the user of their electronic products to duplicate copyrighted video broadcasts. However, the laws governing the market did not identify this responsibility. Sony Corporation’s act injured the sales of the broadcasters and made their customers to err by recording the copyrighted video broadcasts (Jennings 3).
Clearly legal guidelines are necessary to avert the possible total abandonment of corporate social responsibility by rogue business entities. However, for proper development and wellbeing of the society, businesses have to develop ways of ensuring social responsibility towards the society they thrive in. in addition, upholding the importance of corporate social responsibility is critical for the survival of the business enterprise. Legal social responsibilities defined by the existing laws supplement voluntary efforts to exercise social responsibility and realize a balanced situation. Considering the arguments above, it is extremely difficult for regulatory institutions to ensure sufficiently social accountability through enforcement of the law with respect to corporate entities. Therefore, legal compliance alone is not enough to ensure that the corporate social responsibility is taken into account at all times.
Boeger, Nina, Rachel Murray, and Charlotte Villiers. Perspectives on corporate social responsibility. Cheltenham, UK: Edward Elgar, 2008. Print.
Jennings, Marianne. Foundations of the legal environment of business. Mason, OH: South-Western/Cengage Learning, 2010. Print.